Who is responsible when a home doesn't sell? I hear almost daily about how homes with valid purchase agreements are being forclosed on because they seemed to have been lost in the shuffle at the bank. It is no secret that when you are dealing with a short sale there are bound to be hurdles, but no one expects the bank itself to be the biggest hurdle of them all.
Banks and lenders are overwhelmed by the amount of forclosures and short sales they currently have; however this is not a new problem and one would assume that by now they could have hired enough staff and things would be moving more smoothly.
Lets talk about Short Sales. On average a file that has a purchase agreement, or multiple purchase agreements for that matter, sits in purgatory for a minimum of 4 to 6 weeks before it is ever even assigned to a negotiator. At that time an appraisal is ordered which is another 7 business days. Once the appraisal is in it is another 7-10 business business days before the negotiator can get the investor to look at it. Once all of this has happened a decision is made. DO YOU STILL HAVE A BUYER?
Who is responsible when mistakes are made? Where is the accountability? I cannot speak for all agents, nor can I speak for all banks but I can tell you from my experience about a transaction I had that will shock you; it shocked me.
My sellers had purchased their home in 2005 at the peak of the market and because of the economy and their careers had fallen behind on payments. Making the decision to sell at this time can be very difficult and embarrasing. They decided none-the-less to sell. In November we submitted the short sale package to the bank, complete with all the necessary bank statements, pay stubs, tax returns, hardship letter and listing contract. They paid $780,000 for the property in 2005. We put the home on the market in January of 08 for $625,000, the current market value. We lowered the price after 30 days to $575,000 and received a notice of sheriff sale for January as well. We received a
cash offer on February 9 for $575,000 (yes,
full price) with a closing date in June. The offer was submitted the first time to the loss mitigation department at Greenpoint Mortgage on February 12; complete with purchase agreement, market analysis, net sheet and listing contract. I followed up every week to get updates and every week was told the same thing, "This file has not been assigned to a negotiator yet, someone will be calling you or your seller when we get there." After one month of this I started to call twice a week. After two months, I began to worry. I had my seller call as well to see if he could get anywhere. I would sit on hold forever and be passed around everywhere. Finally after 11 weeks I received an email from Greenpoint stating that they did not know where this file was or what happened to it, but could I re-submit. Well, on May 15 I received the approval; the problem is that the buyer walked on that very same day. They were fed up and didn't think the home was worth it anymore. By the way, the appraisal came in at $495,000.
WE LOST THE BUYER, I was just sick about it.
To make a long story short, the next offer came in at $410,000 and the bank declined the offer. The home was foreclosed on August 7, 2008. Now I ask you, who is responsible for this mess. The sellers will have a foreclosure on their credit and the bank will spend several thousand dollars to get this home re-listed; only to sell it for about $350,000.
Greenpoint mortgage should be ashamed of themselves. No one has taken responsibility for this over at the bank and no one probably will. This is not an isolated incident. Ask around, most if not all agents have similar stories. What is it going to take to get these banks to listen to us. If I waited 12 weeks to give my seller an answer, they would take my real estate license. Time is of the essence; for who? The banks do what they like, when they like and dont have to answer to anyone, is this right?
www.minneapoliscondostaraobrien.comLabels: bank screwups, foreclosure, homes for sale in shakopee, minneapolis market, short sale
# posted by
Tara O'Brien @ 5:24 PM
