Loss Mitigation Departments and Their So Called "Acceptable" Time Frames.

Well, once again I found myself on the losing side of a battle about the "acceptable" time frame for file progression at Countrywide again today.  I made my weekly call to check the status of my files only to be told that,  "NO UPDATES HAD BEEN MADE."  Like that was a big surprise - ha!  So I asked the question I ask just about every time I call.  "What can I do about that?"  Well, one of the files has been switched from one negotiator to another (for an undisclosed reason) and now the "Countrywide Clock" has been reset.  This rule in my opinion is total b***s***!  I am now required to give the new negotiator her 30 business days before I may to report her to the "Countrywide Police" in an effort to get someone, anyone to look at the file.  My other file, thankfully, hasn't been switched from one absent minded negotiator to another, but instead remains in short sale limbo.  Strangely, they have already done an interior appraisal on this property, so stupid me thought that we might get have this one on some sort of fast track, WRONG!  The good news is that in only 2 more business days this one goes into "escalation, " whatever that means.  I think that they just tell me that to make me feel like I accomplished something with my phone call.  Has anyone else had any luck getting thinks moved along at the beloved Countrywide?  If so, do tell!

Jennifer

When is the "Recovery"????? Where is the end???

This needs to be addressed as it is the most common question to real estate professionals and economists in newspapers, radio programs, and news programs on TV.

"When is the recovery??? DO you see a recovery in sight??? When will the foreclosures and economic difficulties that we are experiencing end?"

People ...

I have to break it to you ...

THERE IS NO CRYSTAL BALL 

It does not exist ... no one can give a conclusive answer to that question. 

But ... at the same time ... when using simple knowledge of economics, arithmetic, and just plain old common sense ... we CAN come up with a plan to move to the end of this meltdown a little quicker.

But before any real solutions can be explored and presented - we need to understand how we got here in the first place so we can learn from our mistakes and try to not repeat them.

The real estate market is one of the very last truly "free markets" ... the pricing of real estate is set by what buyers are willing to pay for properties and not much more than that. It really IS that simple. Add to this the fact that real estate and the use of it for the most part provides the most BASIC of human needs ... shelter. Residential real estate is not a luxury therefore ... it is a necessity. Now ... there are LUXURY real estate properties that provide a whole lot more than just shelter - but basic shelter is and always will be the primary use of residential real estate. The point is that people need real estate for shelter - that is the logical part of this free-market equation ... but they will also pay for more than just the basic shelter needs according to their own preferences, lifestyle, and emotional needs. Logic dictates the need ... emotion and circumstances dictate the price. That is why in many cases ... logic would dictate that a simple house near decent schools with comfortable living spaces and at a price that allows for an income buffer in the household budget is ideal. But the other part of the equation is the emotional one - the emotions that say we need to show others up with what we HAVE instead of who we are. The emotions that say we have to have it all and have it all now. The emotions that say we are indispensible in our careers and will never have to worry about not being able to afford anything we really want at any point in our lives. And the emotions that trully just plain fall in love with the property and believe that no other could possibly make them happy. It is the emotional side of the equation that put this crisis in motion many years ago.

And what has happened???

Lenders KNEW very well how strong the EMOTIONAL side of the equation was and how much of a part it truly made in making the decision to buy that property no matter what ... especially the emotions that say in America ... we can have it ALL and we can have it NOW ... it does not matter if we can truly AFFORD it or not ... the answer is to borrow a great deal of money to MAKE it happen now. Not work hard and save ... GET IT NOW ... figure out how to pay for it later. Lenders knew this and they took advantage of it ... but people did not use their logic either ... they used their emotions. Logic would have kept many loans from even being considered by borrowers had they been thinking logically instead of emotionally.

So ... here we are learning some very hard lessons ... as a country ... together.

The first lesson we have learned is that money is not free - it is not cheap - and in fact it can be very very expensive. We learned that the mortgage we thought we could afford and would figure out how to afford later when interest rates on ARMS adjusted (maybe get a second job). When a house is mortgaged and interest is ammortized ... the borrower essentially pays THREE TIMES what the amount originally borrowed was when everything is said and done. Now think about that ...

THREE TIMES

Has it sunk in???

If you bought a house for 100,000 ... when you have made that last mortgage payment and stayed there the entire time ... you would have paid the lender back the 100,000 PLUS an additional 200,000 in interest payments. Do you realize that the lender then makes about 200 times their initial investment? Where else can ANYONE get that kind of return on invested money - show me - 200 percent return in total. The lender is NOT making 5, 9 or even 12 percent in REALITY ... 5 percent would be a total of interest paid back in the amount of only 5,000  -  9 percent would be 9,000 and 12 percent would be 12,000. 200 percent ... people are signing up to pay a total of 200 percent in interest payments for the very BASIC need of ...  


SHELTER


No ... logic cannot possibly be the driving force behind the willingness to pay a total of 200 percent back in interest on borrowed money.

But ... with that said ... people are so mobile now that we move several times in our lifetimes these days ... the chances of that mortgage being paid for the entire terms are slim to none. The lenders KNEW this too ... (are you starting to realize that a great deal of psycology and study of modern human behavior plays a great role in how these loans are structured to begin with?) ... and because they knew that people will not sit still too long for the most part in one place ... they decided that the MAJORITY of their interest payments would be paid in the first several years of the loan. I just finished a payment history analysis of one client who was shocked to realize that out of over 60,000.00 in total payments to her lender ... her principal paid was only 5,000.00. The original loan was for 500,000 which means she truly OWNS at this point ... THREE years later ... 1% of that house free and clear ... she owns the south-west corner of the living room and nothing else. After this reality was discovered and the initial shock wore off - she said that if the bank tries to repossess the house ... she is taking that corner with her and they can have the rest.

No ... money is not free ... and as hard as so many people work to pay that mortgage ... thinking that they are working to OWN their home - the truth is that they are really just leasing it from the bank that lent them the money to buy it. Three years and 60,000.00 later ... one client of mine OWNS 1% of her home ... the BANK owns the other 99%.

What an expensive lesson to learn about what money REALLY costs and how tens of thousands of dollars are spent to in reality - only RENT-TO-OWN our homes from the lenders.






This topic will be continued tomorrow ... much more needs to be said ...



Maureen

The Three P's ... Patience ... Persistence ... Perseverance

The three P's ... are soooooo necessary to makes things work in this business - Patience ... Persistence ... Perseverance.


The Patience is necessary ALL the time from EVERYONE involved. We Need heaps of patience to deal with the idiot lenders who have less business sense than the little girl down the street who sells lemonade in a dixie cup for a quarter a glass. We need stockpiles of it when trying to navigate through the extremely flawed processes and proceedures that the banks set up. I cannot even begin to enumerate the number of times I spent over 45 minutes on hold and being transferred from one department to another to another to another ... only to get the voicemail of the RIGHT person who by-the-way now has a voicemail box so full that they cannot record any more messages at this time. Will the RIGHT person even get to know that I tried to reach them??? Sadly not for a while.  We need patience when dealing with the clients who are noteable worried about their situation and demand answers instead of doing their part to better their own situation. Three in the afternoon on a Sunday is not when lenders are available for discussion ... and neither am I lately because I need to remember that I have a family of my own to take care of. A whole lotta patience is needed to keep us going and to go right back to the headaches the very next day.

Persistence ... unlike almost every homeowner or investor who tries to strike a deal with their lender on their own ... we do not give up. You have no idea how many times I have been told ... "You cannot do that" Really??? You think so??? Well ... watch and learn what really CAN be done. Thinking outside of the box has been a way of life and gotten me into loads of trouble in the past - but in this industry - it is NECESSARY to get things done the way they need to be done. And part of thinking outside of the box is not taking "NO" for an answer when I know I am right. And I know I am right when I say that in order to fix this severely broken housing market and the economy as a whole ... housing MUST be made affordable again. Persistence means sidestepping servicers who dare to say "No" and going straight to the investors that hold the mortgage notes. Persistence means doing legal homework and threatening legal departments whith costly lawsuits. Persistence means taking issues to the top levels of the lenders and contacting governing agencies and filing complaints. Persistence means demanding the same from those on the other side that we expect of ourselves and pushing through until that is accomplished. Persistence means re-structuring deals sometimes to keep everyone on the same path towards a solution. Persistence means not giving up well after others have thrown in the towel.

Perseverance ... Staying the course ... no matter what ... knowing that we will get the solution - that the job will be done. It means never giving up hope and waking up the next day and dealing with all the headaches all over again. It means encouraging all team members to keep moving forward and letting myself be encouraged and reminded why I do this to begin with then I am ready to give up. It means trying to keep clients as happy or at as much ease as possible and deal with the doubt that is so carelessly tossed in our direction. It means staying calm and keeping the goal in mind when dealing with people who are unreasonable and have no idea what they are talking about or how to solve the problem themselves.

The Three P's ... where would a lot of people be right now without them.


Maureen

Know Your Rights in Illinois

There are many misconceptions in Illinois about foreclosure and what rights borrowers have under our laws.

Let me start with a simple time-line of the foreclosure process in this state ...

The first step is "default" that is typically after the borrower has missed about three payments consecutively with their lender. At this time, the lender may choose to file a foreclosure lawsuit against the homeowner called a "Lis Pendins". "Lis Pendins" is Latin for "Litigation Pending" and states the lender's intention to sue the borrower for the total amount owed on the mortgage as well as late fees, legal fees, fees on fees ... you get the picture I am sure.

The Lis Pendins should be served by either a sherrif for the county in which it is filed or by a "Special Processor" ... it needs to be personally served and in this state IT IS REQUIRED BY LAW for a copy of the actual PROMISSORY NOTE - not the MORTGAGE ... to be attached. If that NOTE is not there ... it is not a valid service and can be argued that it is also not a valid filing. LOOK FOR THAT NOTE!!!

After the Lis Pendins has been filed and properly served ... panic starts to set in and the waiting game and back-and-forth nonsense for many borrowers begins with the lenders. This period of time can take anywhere from 6-12 months depending on how aggressive the banks' attorneys are with motions in the legal proceedings. If no agreement has been reached by the end of this time with the lender ... the lawyers will file a motion for a judgment and setting of the actual foreclosure sale date.

The sale date is usually a few months from the judgment.

Now ... if there is still nothing done ... the property is sold at the foreclosure auction sale at a specific location in the county in which it was filed and litigated. But that does not mean the sherrif's are going to come knocking at your door the next day and start tossing your belongings into the street in front of all of your neighbors. There is still more to the process - we really are lucky to have these laws in place.

After the foreclosure sale ... at which 99 out of 100 times the lender just purchases the property back ... the judge needs to "Confirm the Sale". This takes typically another 30 days from the sale date.

But ... there is more ... (this sounds like an infomertial)

There is an additional 30 day period typically that occurs before the judge grants whomever purchased the property an "Order of Possession" and signs an Eviction Order.

NOW ... you can get worried that everything will be tossed into the streets ... unless you have professionals on your side helping you get through this.

Here are a few more legal tidbits concerning foreclosure in Illinois ...

1. You have a right ... under our state's laws ... to file a motion with the judge hearing your case to have any possible deficiency judgment waived BEFORE the lenders have a say. What does this mean??? This means that you can save yourself a possible tens of thousands and even in some cases - hundreds of thousands of dollars that the lenders may ask you to pay in the future to cover their losses at the foreclosure sale.

2. You have a right ... under the Fair Credit Reporting Act ... to demand that the plaintif in your case PROVE that they are indeed the rightful creditor by demanding they "Produce the Note" within 30 days of a written request. I do this all the time for clients to buy time in the process to work out a solution with the lenders. And it has worked spendidly for the most part. Unfortunately - one of the largest firms in this area - which shall remain nameless - has set up a special department exclusively for handling these requests. When I came to this realization ... I knew my "gig" was up with these guys ... too bad.

3. You can request and many times get an additional 90 days AFTER an eviction order has been issued and served to find other living arrangements. It is accomplished simply by calling the lawyers for the lender and asking for the eviction attorney. Explain the situation and every time we have asked ... we have received up to 90 more days.

Remember that foreclosure in this state is regulated and handled by the courts - take advantage of that fact to work out a good agreement with your lender as to how the problem will be solved because it will NOT just go away the longer you wait.


Maureen

WAMU - My worst nightmare!

Why is it so hard to do a short sale with WaMu (soon to be Chase)? This the question I ask myself every time I call in to their short sale department and start to ask for status updates on my many WaMu files.  I am never sure if I will even be able to speak on my clients behalf because for one reason or another WaMu seems to find it difficult to locate authorizations in their system.  Just getting information sent into the bank is nearly impossible as the fax numbers they provide you are either busy or non-responsive.  The associates that answer the phones on the "front lines" are typically new and not very well versed in what is actually happening in the real world of foreclosures.  Now I will recant for you a recent phone call I had with a lovely (and by lovely I mean absolutely dreadful) lady named Sue.

A week ago I went to make my weekly update call to WaMu.  The call started off smoothly, as I was asking about a file that they have had for some time now, but when I went to start asking about a group of files that had been more recently submitted things took a turn for the worse.  I have 4 files for one client that I submitted on the same day in September.  Well, let me just start by saying less than 1/2 of what I submitted made it into the WaMu system.  On one file(only 1 out of the 4) the actual short sale package (all 43 pages of it) was received and uploaded into the  WaMu system.  I know this because a Realtor called me to arrange to do a BPO on the property.  The real problem is not that the BPO was done on the file, that is a good thing, the problem is that the Authorization to Release Information that I have submitted, or tried to submit on 4 different occasions to 3 different fax numbers, has still not managed to make it into the  WaMu system.  Now this is a HUGE problem, because the wonderfully competent Sue is unable to speak with me about this file, even though she knows that I am authorized on 2 of the 4 files for the same person and that I obviously know what is going on in the file (the BPO agent called ME remember) she will not tell me what the next steps are going to be.  When I questioned Sue as to how I should proceed, since WaMu cannot seem to get my Authorization uploaded through the conventional way, her response was to tell me to fax it to these numbers again.  Now, I must admit that this response did not resonate very well with me and I went a little bonkers (after a time) because, lets be honest, this was not what I wanted to hear from this person.  At first I politely responded that this was not going to work for me and that I needed another way to get this Authorization into their system and quickly she turned into a robot and just kept repeating the fax numbers to me.  Now, this is when I lost it.  I asked her for a supervisor. She claimed that there was no supervisor (yeah right!) and then told me the fax numbers again.  She also refused to give me her ID number so that when I called into the Corporate Conflict Resolutions Department I could let them know about the fabulous service she was providing.  I have called the corporate office and will continue to deal only with them in the future, as I can no longer continue to waste time with such unresponsive and uncooperative individuals.  I am also considering taking things a step further and going through the OCC and filing a complaint on behalf of my client.

WaMu may be my worst nightmare, but I will persevere and win this battle on behalf of my client in the end!

Jennifer