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Saturday August 19th 2017
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Movin’ on Through Memories of Foreclosures, Mods and Short Sales. . .

Part of this week was invested in putting together video materials for the Straight Talk Realty University’s Distressed Property Academy division.  It made me remember all our clients and the tough path we walked together assisting them to move on with life after distressed property!  To use video to assist others now on that journey, I needed to present capsulized information and experience in a practical, useful and digestible way!   Some lenders and professionals in distressed property use jargon and terms so as to scare people from putting a toe in the water.  We have the opposite view!  We want to illuminate, educate and inspire people to meet and overcome their real estate challenges head on so they can move on!!!

I started writing for the Mogollon Connection in 2008!  An early article explained the root causes of the mortgage meltdown.  As a resort/recreation destination, all of us in our small Arizona White Mountains community were impacted by this mortgage meltdown.   It seemed all the folks we knew were in foreclosure or had family going through it.  Working in this situation compelled me to help as many as possible!  I felt if the Lenders treated me as a professional in such a shoddy manner, they had to be treating others worse.  I cranked up a web site to help people get loan mods.  That was a joke!  The Lenders talked about mods but did not do them!  Scam artists flocked to mods.  Lenders used this to paint all with the same brush.  Their phone messages we were forced to listen to as we spent hours on hold,  told all callers they did not need professional help and that modification agents were only out to take borrower’s money. Many were.  In reality, when Lenders could push Pro’s aside, they told troubled borrowers anything they wanted as they knew folks were overwhelmed and had little resource to enforce their rights. The shenanigans Lenders pulled on some of my clients was unbelievable. Along the way, the government stepped in with HAMP.  That was a bigger joke. In reality Lenders had no incentive to do them as HAMP mods cut into   profits and the major lenders had already cut “bail out” deals with the government.  So Lenders played the game of always processing on your mod and never delivering.  The few that did stunk.  I told my wife I was going to stop doing them because every commitment letter I got for anyone had terms so outrageous that I thought it reflected badly on me as another incapable or greedy mod agent.  The Az. Department of Banking smelled money so they stepped insisting that mods dealt with mortgages so mod agents must invest about $1200 to become licensed loan officers.. This made the decision to pull back simple!

Please note though that as of late, there have been a few folks I have heard of that were granted doable and significant mods.  If a mod might help you, do yourself a favor.  Check it out for yourself.  Don’t let everyone else’s horror story stop you from getting what you need!

“Shorts” were the next phase.  What a few of us thought made a lot of sense was a short pay refi.  This was where a new lender came in and did a refi for the underwater homeowner on the existing value and the homeowner’s current ability to pay.  Fannie and Freddie refused to accept short pay refis.  The industry followed suit across the board.  Now the government’s HARP program brings back a version of this approach.  We hear little enthusiasm from the street  as lenders find it to messy to complete transactions under government guidelines—another program designed for a political talking point, not results; it would seem.

Lenders short sales departments were originally resourced from their mod departments revolving around the same games and incredible inefficiencies.  Anytime we gathered as practitioners for training or forums, the standard jest was, “how many times did they tell you they never got your document package?”  None of us ever remember these same Lenders having us talk to a barking dog in customer service or losing a loan app in 2005! Strange how that works!  Again, scams hit quick! Most involved value and/or insider transactions.   Buying groups formed.   Their game: convince the bank your house was worth $10 but they were willing to do you and the bank a favor and buy it for that.  If the bank went along, they did buy it—-that is if they already had it sold for $15.  If not, you and the bank were screwed while they moved on to the next pigeon. The Lenders used that and other excuses to come back with their own ridiculous rules.  Buyers and Sellers had to sign all kinds of affidavits that Darrel or his other brother Darrel had not made a deal behind the barn with Uncle Billy Bob where Darrel paid Billy $1 more a month than his payment and they stiffed the bank for the $100K the house was under water. Reasonable people understand that it would not be fair to Lenders to be so abused.  However, many times a lender would have been better off to work with a family trying to sincerely work with them. Now that trend is starting to reverse to “common sense” decisions.

Still today, the Lenders methods of determining value has killed more legitimate deals than you can shake a stick at as my Pappy used to say!  Some underpaid and undertrained BPO agents provide Lenders faulty value opinions.  The front line people usually are not from a real estate background.  They feel un-prepared to engage in a value discussion with you so your short sale lives or dies on a $65 BPO that may or may not be worth the paper it is written on!

Good news!  Things have improved since early days!  Processes have become more efficient.  A few are even experimenting with rules that make sense.  The majors have sprinkled staff’s with people that do know something about real estate.  Human Resource departments figured out that hiring courteous friendly intelligent people and giving them some training got them better results than hiring barking Burger King Grads and putting them in the call center the first day.

Are you safe in assuming I am not a huge fan of Lenders????  YES!!!!!!!  That said, I am not a fan of anyone on either side trying to cheat the other.  As our Lamplighter motto says, “we treat people the way we want to be treated.”  My real problem with all lenders, Freddie and Fannie leading the pack, lies here.  They have taken a self- righteous approach, deny their complicit involvement and thus responsibility for resolving the present “mortgage mess” consequences.  They want to claim victim status and claim, “loan officers, builders, and borrowers caused this.”   They want to wag their fingers and punish people who have tried to manipulate them or walk away from loans that they had agreed to.  I understand and accept the grain of reality in those sentiments.  However, any serious examination concludes that the trillions of dollars bilked from innocent buyers of securitized mortgages leaves them the hardest hit victims.  Lenders, most notably Freddie and Fannie, pocketed trillions from these securities sales.  Serious research concludes it was inevitable that this level of deceit would lead to our economic collapse.   Summarily said, I see Lenders pulling the classic trick of a corrupt powerful abuser in that they use their influence to blame the victim and thus victimize the victim a second time.

Lamplighter claims a different conclusion for people!  Be educated, inspired and illuminated to claim it for yourself!  Claiming a life journey that taught a lot of lessons, I state that no challenge between two parties gets satisfactorily resolved unless both recognize their responsibility to do so.  The “blame” will be a part of the conversation but many times blocks the resolve!  Staying in reality brings better results for all! That is what we at Lamplighter aim for when we assist distressed property owners.  We encourage them and their lender to start by saying, “ we are both where we don’t want to be so let’s figure out the most reasonable way for both of us to close this chapter and move on from here”!

Check out our Lamplighteraz.com web-site for tools and answers to your real estate challenges.  Learn about Lamplighter Realty, Lamplighter Financial, and Distressed Property Academy at callgene4realestate.com  For your real estate needs, call Gene’s message center for Lamplighter Realty 480-307-6459 or dash off an email to him at gene@lamplighteraz.com. God Bless!

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