Foreclosures are an ever changing business in Oregon. Click on the video above to get a quick update.
Reported in the Bend Bulletin this morning, Notice of Defaults (the official notice that your bank sends you when you are not making your payment, and they’ve, frankly, grown tired of waiting on you) were about half last month of what they were in September 2010. This notice initiates the foreclosure process for the lender. From our experience, this is when most homeowners consider foreclosure alternatives. One of the most common methods of avoiding foreclosure is a short sale.
It’s hard to say what this means for a market. It is not necessarily saying that people are now making their payments. We’ve seen some banks allow people to stay in their homes for well over a year before serving them with an NOD. We speculate that receiving an NOD has as much to do with internal bank processes as it has with the lack of a payment.
Okay, been awhile since I posted, but better late than never. I recently completed a short sale on a Central Oregon home with G-Mac (for those of you who don’t know who I am referring to, you have to read beyond the dash). My client was looking to avoid foreclosure and the nasty potential deficiency judgment, and hired us as her real estate agent for this short sale. This was a beauty. Here’s the scenario: Single family town house for sale in a resort community, 2 loans (both with the aforementioned lender), the first loan was $80k over list and the second added another $60k or so to the excitement. We had a lowball offer come in around give-me-a-break avenue and sent them walking with a counter near market value. Armed with a pre-approved price $5k under our advertised price, we received an offer right at list price. It was clean, all cash, no contingencies, and a great broker on the other end. Begin rant.
Over the course of the short sale debacle, one lender began to use a system called equator. Because the lender was so crappy at working short sales, inefficient in every way, and quite possibly the worst company to deal with, other lenders jumped on the technological breakthrough known as equator (they named it this because its halfway between the coal engine and the model T). In a nutshell, you log into the system, read your tasks from the faceless (and often brainless) negotiator and complete them. You upload all of the appropriate documents needed for a short sale and then wait for the next task. It is so efficient that if you upload documents with an underscore in the document name, it rejects them and won’t let you complete the task. One word: A.w.e.s.o.m.e
I’ll spare you the rest of the nightmares accompanying what appears to be an ms-dos based website more cumbersome than a bulldozer strapped to a 747 at takeoff.
So after I rename all of the documents and completely ruin every bit of systematic nomenclature I created to keep my files organized, I upload the required items, fill in the crossword puzzle, pin the tail on the donkey, and complete all of the tasks…for the first loan. I then call in to make sure the 2nd lien (with the same servicing company) is starting their evaluation of the short sale and the lender tells me they don’t show the loan as belonging to them. I call back 2 more times (overcome chromosomal issues by using best out of three) and they finally admit the bad loan is theirs. After 20 minutes on the phone, the negotiator sends me to equator to upload the same documents. Now I have 2 identically named property files in the equator system asking for the same things with different negotiatiors. Again, efficiency is why we are making so much progress on the war against banks. I call the 2nd lender back after upload and ask them if the current negotiator for the first loan will eventually handle the 2nd loan also. Nope. “Well, sir, these are 2 completely different loans and will need to be handled separately”. Sweet.
Time goes on and on and on and the 1st loan is telling me the investor is reviewing the file and we should know something soon (to her credit, she was responsive and kind). The next day, I receive an email from the equator system saying the short sale is approved. I login to dinosaur.com/brutal and see I have new messages. I click on the first file titled: 111 NW Any St and look for the approval message. Wrong loan. I hit the back button and click on the other file titled: 111 NW Any St and look for the approval message. I see the approval message with an attachment and still have no idea which loan is which (a lot like trying to distinguish between good superman and bad superman without knowledge of what either one looks like), open the attachment, cross reference the loan number after sorting through the renamed unorganized file system imposed by mr. awesome, and I discover we have approval on the 2nd lien. I call the 2nd loan negotiator and thank him. Then I ask if he can help me with the 1st. Expecting the same response given over the previous 28 days “I’m sorry sir, these are 2 completely different train wrecks” and some version of I can neither confirm nor deny, the guy tells me yes. WHAT? What is this, hotel California? I said great, thanked him again, hung up, and looked around for the wicked witch of the west, a tornado, Toto, something that would prove I was living an alternate reality and the response was merely a figment of my imagination. Nope. No tornado, no red shoes, no Auntie Em. Delighted I wouldn’t have to call a shrink or check into a mental ward for hallucinations, I closed equator and waited for approval from the first (cue finally Jeopardy theme song).
A few days go by and the 2nd loan negotiator calls me and asks if I have approval from the first (quick glance out the window for the Scarecrow). “No” I said. He takes a few seconds and says “Okay, I see it here in the system. You should have it this afternoon.” Rather than get hysterically upset with the guy, I thank him and hang up. And in the afternoon I received the approval from the first. I called the title company first and made sure they updated the title report for a 4 day closing (including the weekend) and then called the buyer’s agent and shared the great news. She was excited, called her buyer, I sent the addendum releasing the short sale contingency, and we closed and recorded four days later. Another one under the belt.
I call escrow to confirm that the final closing statement had been sent to the 2-faced lender with the same name. It was confirmed. 3 days later I recieve a call from Mr. Wonderful, the negotiator for the 2nd loan, and he asks if we’ve closed. I said yes and told him the documents and the funds were sent 3 days prior. He says cool and thanks me (confusing). A week goes by and I get another phone call from him: “We closed right?”, he says. I spared him the smart-ass comment of “No duh!” and answered yes. He then asked if I could email him the final closing statement. So, I did.
Three more days go by. I receive an email from G-Mac with “Urgent:Your short sale is in jeapordy of being cancelled and funds being sent back to escrow”. Frantically, I log into to stonage_software.brutal and click on secret link #1…no message. Back button, click on secret link #1 (really #2, but who knows) and see a new task. Best part, the task was added the day before with no notice, no email, no anything. I upload the final hud1 to the equator system, re-enter the information they already have (2 copies in the two files) including the final sales price, net to bank, borrower’s favorite color, and all of the other information contained in the pdf I just uploaded (after removing the underscores). Being that this was the day before the approval expired, I emailed both negotiators to make sure they received the file they needed. No response. “Honey?” I call downstairs to my wife, “Did you deposit the commission check from the NW Any St deal?” “Yes.” she says. “Why?” she asks. “Oh, no reason. Just curious. I love you!” I log off of the system to keep the zombies from crawling out of the depths of equator, place my head on the cold glass desk, and shake my head. What a frickin’ joke. End of Rant.
How to Beat a Bank in 5 days: Conclusion
This is the final part to a multi-episode, written depiction of a real life short sale.
It’s been awhile since I last updated this story, partly because we were working the short sale and partly because the outcome was so brutal. After much waiting, I beat the loan servicing company (which was amazing given the fact that the negotiator was the single most unpleasant person I have ever talked to), then I beat Fannie Mae and they approved the file, and then (cue ominous music)……the mortgage insurance company said they won’t agree to the sale unless the borrower signed a $25,000 note payable at approximately $350/month. One word (no, it’s not that word). Awesome.
I tried to get them to settle for less, to give a cash option, etc., because maybe, just maybe, the buyer would be willing to contribute to make the deal happen or we could find another solution. Just to summarize, 1) The seller couldn’t make their mortgage payment because they didn’t have the money 2) they had to uproot their family from a home they loved because they didn’t have the money 3) They couldn’t sell because the house was worth about ½ as much as they paid and they didn’t have the money to sell and make up the difference. So logically, the MI company realizing how much money the seller had (clearly defined above in the summary…ZERO), decided their portion of zero is $25k.
Needless to say, the deal fell apart and another foreclosure hit the market. To further illustrate the incompetence, we had an offer about $35k higher than the valuations the bank and previously mentioned idiots had in their possession, the mortgage insurance company still has to pay the bank the same amount, the buyer didn’t get the house, the brokers didn’t get paid, and Fannie Mae added to their ever-increasing property tax bill for Deschutes County. Oh and by the way, when the property came back on the market, the list price was $10,000 less than our offer.
Moral of the story: The banks, Fannie Mae, and mortgage insurance companies don’t care about the borrowers. They accept zero responsibility for their lending standards and practices and blame everything on the homeowners. Good news for them though, Uncle Sam will continue to fund their massacre of the people who are trying to do the right thing. I’m sick of it and my heart goes out to those who are dealing with this. End of rant.
Other parts of this series:
How to beat a bank in 5 days: Part III
This is the 3rd part to a multi-episode, written depiction of a real life short sale.
Note from the author (me): Short sales and the rules and regulations banks try (and butcher) are changing every day. Even though I try to keep things as recent as possible, for the protection of those involved, some of the events in my posts may not reflect “current events”. Therefore, you should consult with the proper professionals when dealing with your short sale. Now for the rest of the story…
I awoke to the alarm clock blaring “Buffalo Soldier” by Bob Marley at around 5:30am (it is my current ringtone and therefore tends to strike me as an important call…and I fall for it every day). So after about 3 verses, I slowly turn over and check the time. 5:30am…Sweet! I can’t believe I’m awake. Being that I am always trying to wake up early, the enthusiasm is understandable. I flop my head back on my pillow thankful to be awake, and fall back asleep. The snooze function is great. It continues to disrupt my sleep for the next 2 hours. Finally, I wake up (and actually get out of bed).
Shit! I haven’t heard from the bank yet! The foreclosure sale is in 3 ½ hours.
At this point in the game, I can’t really do much except for wait. So…. I dial the bank and try desperately to get an update. I beg and plead to speak to the wonderful woman who is paramount in our success to date, but can’t get her. Another woman answers the phone and I ask for superwoman instead. “She’s on the other line” the woman politely informs me. “Uhhhh, can I hold?” After hours of being on hold on nearly every short sale transaction (not by my choice), I could barely believe I asked such a ridiculous question. Apparently, I wasn’t the only one.
“She is helping another customer…but there may be something I can help you with” she said in the most helpful tone imaginable. She’s cheating on me. That was my first thought, but then I came to the reality that the bank has thousands of customers and I would have to settle for her wingwoman (I officially coined that term after writing this).
“Well” I said, rather dejectedly. “She knows the whole scoop on this file (and is quite possibly my favorite person in the banking industry), but I’ll give it a shot. The property address is…” The woman interrupts and finishes the street name, city and zip code! I was famous!
“Yes, I see here that the auction has been postponed.” I wanted to blurt out “my favorite color is red, I’m a Libra and the account # is xxx-yyy-xyxy (it’s a habit)”. But I stuttered “It, it is extended? It’s been postponed? For how long?”
“Looks like until…about 5 days from today.” She responded.
All I can say is that I am very glad weren’t on a video chat. Although dancing on a glass table in a bathrobe seems to be cool, I doubt she would have thought so. I turned down the “I’ve got the power” background music, dismounted from the desk, and unmuted my phone.
“Thank you” I said. She replied with “You’re welcome, Sir.” (Clearly we were not on a webcam because she would have known my age and that “sir” was not appropriate).
“Anything else I can help you with at this time?”
“No, ma’am, this is wonderful news. Thank you very much; you have made my whole day.”
“Thank you for calling Bankland and you have a nice day, Sir.”
Once I made sure the call was completely ended, I clapped my hands 4 times and gave a little “whoop, whoop!” (Alright, it was more than little, but hey, I was stoked).
Previous experience taught me that banks don’t always tell you what the actual situation is, so I headed for the courthouse to make sure the information I received was accurate. After impatiently waiting for 17.8 minutes, the gentleman handling the sale strolled in fashionably late. He was a pleasant man with a ball cap on and spectacles, sort of reminded me of St. Nick. The one auctioneer saw him arrive and stopped his operation to tell me this was the gentleman I needed to ask about the status of my clients’ sale date.
“Property address?” the kind man asked in a very sincere and caring tone.
“”123 Main Street.”
His response did not match the news I received from the bank. It was better!
“Postponed for 7 days.” He declared. I couldn’t hold back the smile.
“Thank you, Sir. Thank you. I cannot tell you how happy I am to hear you say that.”
With a warm smile and “relax kid, you’re okay” tone, he said “Have a wonderful day”.
“You too. You too.” I said and shook his hand.
I managed not to do a cart-wheel down the courthouse steps (thank goodness, I’m getting older and the successful dismount from the desk earlier in the day was the 1 in 20 successful moves for the week and the outcome would have been disastrous). I immediately sent a text to my client and called my best friend and principal broker.
“Guess what dude? (Long dramatic pause) I got the auction bumped until a week from now”.
End of rant.
Other parts of this series:
How to beat a bank in 5 days: Part II
The following is the second part to the blog series “How to beat a bank in 5 days: http://movetobend.com/2011/03/how-to-beat-a-bank-in-5-days-part-i/
Day 3: Day 1 and 2 consisted of mad scrambling to get each and every document to the lender. After running around town and a tremendous effort by the owners of the home, the bank received the last document they needed last night at 6pm (my time). I called in the morning to verify receipt only to find out the gentleman handling the file and his boss/supervisor were both out of the office for the day. Luckily, the woman I spoke to was the same one I spoke to the day before. She not only confirmed receipt, but had her supervisor (as I am typing this, I just realized this bank has a ton of supervisors) help escalate the file and get it to the loss mitigation department (insert ominous music here). She told me I should be able to get some info by the end of the day around 5:30pm my time.
I called an hour early just to make sure I could reach her and I couldn’t get through to anyone except voicemail. When I heard the voicemail I started pushing buttons trying desperately to get a human. After the 3rd voicemail, I hit the zero key one more time and punched in an extension previously given to me. Someone answered. The connection was terrible and I could barely hear him. I asked for her, told him the extensions I already tried, etc. He tried to locate her but couldn’t, and then asked if he could help me. I went through the normal routine and gave the account number, my name, the property address, borrower’s social security number, and favorite color (other than the favorite color, this is usually what banks ask to make sure I have authority to discuss the account and that a stranger isn’t calling to steal the identity of the person losing their house). After confirming I was me and he was him, he proceeded to tell me that the request for extension was rejected by guess who? Yep, a supervisor.
“Why?” I asked.
The man replied “…because we can’t get a broker price opinion done before the foreclosure auction date.”
My heart sank. If at first you don’t succeed…. I pleaded with him. He asked the offer price. Instead of asking what the (insert superlative) does this have do with the auction being delayed, I composed myself and said “$x thousand”. Before he had time to respond, I started in explaining how long this home has been on the market, how this was a miracle offer given property condition, the tragic state of our real estate market, and that the only reason we received the offer was because we found the one person in the world who would have interest in this “unique” property. I finished with “Trust me. You guys don’t want this one back.”
He said he would transfer me to the gentleman responsible for the denial (supervisor, in case you forgot) but explained I would have to leave a message and wait for him to get back to me. I thanked him and waited for voicemail. Then what to my wondering ears should appear…a live person chimed in and said “Hi, this is Aslan. May I help you?” (To protect the privacy of the individual, I have selected a fictitious name).
I started over. “Aslan, my name is Josh Hansen and I am trying to find out why the request for a short sale was denied for this file. Can you help me?”
He replied “We just don’t have enough time…I mean, it’s 6pm my time, 5pm your time…and the sale is less than 2 days away. There is no way we can get a value prior to the auction time.” Composure is key with these people.
Instead of duh, I have a clock and duh, I know your time is 1 hour ahead, and duh, the auction is on Friday, I kindly replied with “I know, Aslan. That is why it is so important we talk about this now.”
He continued “If we had this paperwork 30 days ago, it would be…”
I interrupted “30? How about 60? Trust me, Aslan, If we had received an offer earlier, I would have gladly submitted it (courtesy chuckle). Problem is, we didn’t.”
“I know, I know…” he said and then paused. I had him. “Well” he continued, “What is the offer price?” (Seriously, what is the deal with the stupid offer price?).
“$x thousand” I replied. “Look, I’m not asking for an indefinite postponement, just long enough for you to evaluate the value so everyone involved will know this is a great deal for your bank. Trust me; you don’t want this one back.”
After stammering for an eternity of 3-4 seconds (which, given the hour difference and short time frame, seemed like forever), he said “Well” he sighed and then continued “It’s about 6pm my time and I doubt the person who can help us is still in the office, but I will call him. Is it okay if I call you back in about 20 minutes? Is the number you called from the best one to reach you at?”
Again, composure is key. Rather than “Don’t end a sentence in a preposition” I said “Absolutely, Aslan. You can call me anytime.”
He finished with “If I can’t reach him, I will call you in the morning.”
I responded “Oh, thank you Aslan, I can’t tell you how much I appreciate your help”. To be continued….
Note from the author: For what it’s worth, even though this post is laden with sarcasm and seemingly insincere gestures, I am very thankful for how this bank is treating me on the phone and everything they are doing to help the borrowers avoid foreclosure (if they don’t postpone, I won’t be surprised and I assure you I will broadcast their ineptitude via every outlet I can find). But, at least they are kind. End of rant.
Other parts of this series: