Who’s to Blame?

Lenders:  You’ve been graciously given bailouts and blind eyes.  Now, it is time to stop the bleeding and respectfully protect every tax-payers forced investment into the housing crisis.  Aghhhh!

My team of agents and investors daily dedicate the majority of our steam to short sales.  We know how to find the deals that work.  We have spent time and dedication towards learning the best ways to systemize the process so that all parties win.

However, no matter how much we push forward to keep our costs down, to net lenders what is required, and to help homeowners walk away with the best result, I am still astounded daily at how little the servicers care to do the same.   The servicers are bleeding the tax-payers, bleeding the investors behind the note, bleeding sellers and buyers, and keeping the market from ever recovering.

Why am I on this tirade today?  Well, I just did our monthly file audit.  Looking in depth at fmv, lender short sale approvals, buyer counts, and days on market, I determined that servicers have on our files alone lost over 1.5 million in potential net.

Case in point:  A short sale in our system had a buyer at 325k.  The servicer took too long to review the file, lied about lost paperwork, incorrectly closed the file during review, and simply let their untrained reps ‘not care’ about the result.  The buyer bailed after 90 days.  Property declined in appeal over those 90 days and foreclosure comps on the same street brought the value down to 305k.  Buyer contracted.  Servicer played the same game.  Short Sale approval came in at 305k.  Buyer did their inspections and found mold.  The mold was a new development due to the seller’s inability to maintain the utilities.  They requested the approval be reduced to 295k to address mold concerns.  The servicer refused to play-ball.  Buyer bailed.  Mold continued to get worse since the home was not being maintained for next 60 days.  Now, the mold will keep the property from receiving an offer any higher than 185k.

Had the servicer lit a fire under their butt they would have received 140k MORE NET months earlier.  Instead, they let the property deteriorate.  That is a 44% HIGHER NET they simply let die.

The irony of this case is that I, wearing my investor hat, had offered the seller the same 185k at the very beginning.  My investor offer is now all the servicer is going to get.  The only reason the seller turned my offer down was her servicer’s refusal to drop a deficiency judgment.

Even with the mold and the fact that the servicer caused the loss to be greater, they will still not let the seller off for the deficiency.   So, the neighborhood gets another low-ball distressed property sale, the seller is being chased for money the servicer would have gotten with the first offer, and two buyers have lost time negotiating the process.   A lot of time was wasted.  A lot of money was wasted.

In our continued commitment to the seller, we are now building a complaint case and public relations problem for the servicer so that the property is approved at the investor price-point and the seller is released from liability.  The property is now a short sale rehab!  Our team will now NET the 44%.

This same story happens all the time.   I wonder what the national total for net loss due to servicer laziness would be.  Those are the stats I would like to read.

We work diligently every day – if the servicers had the same commitment, recovery would be months not years away.

    To Your Short Sale Success   Amy Ransdell ~ Your Atlanta Real Estate Gal