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Banks are unbelievable! A vent!

Posted by nelles (My Page) on
Fri, Aug 14, 09 at 12:28

Nothing can be done, and I don't even have a dog in this fight, but banks are freakin' unbelievable.

My neighbor's DD and SIL were due to close on a short-sale yesterday. (foreclosure was tomorrow, I believe) The closing was moved to 1 o'clock today because "someone at the bank hadn't signed off yet".

This morning, the bank called and said "oops, we forgot to pull the listing, and it was sold at auction 3 DAYS AGO."

The bank got 100k LESS for the auction sale!

The DD and SIL are out all the inspection money, plus have to cancel all the utility hook-ups.

I feel so bad for these young people who lost a home to an investment company, no less.

Just venting...

Ellen in Central FL


Follow-Up Postings:

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RE: Banks are unbelievable! A vent!

But if an offer was accepted, isn't that somehow breach of contract?


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RE: Banks are unbelievable! A vent!

If they have a valid contract, they need to consult their attorndy.


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RE: Banks are unbelievable! A vent!

fruitgirl:

Yeah, that's my thought, too. I told my neighbor that the kids may want to look into some sort of legal action.

Of course, they would be going up against a bank, and it might be more trouble and expense than it's worth.

Boy, the "American dream" of home-ownership certainly has turned into a nightmare in the past few years, hasn't it?

Ellen in Central FL


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RE: Banks are unbelievable! A vent!

Hi Ellen,

The bank got 100k LESS for the auction sale!
The DD and SIL are out all the inspection money, plus have to cancel all the utility hook-ups.

Whew! *I* would tell DD & SIL "bullet dodged!!!"

If they were paying over a hun-grand MORE than the free market auction, they were dramatically overpaying!

Sometimes things that look at first to bge lousy are truly blessings in disguise!

Cheers,
Dave


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RE: Banks are unbelievable! A vent!

I agree with Dave on this one - it appears they were overpaying.
More broadly - this is unfortunately very believable. Banks are not staffed for or very skilled at the business they have forced themselves into with lax lending practices. I'm sure that "oops" was hurt many times over today, yesterday, and the day before in banks all over the US.


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RE: Banks are unbelievable! A vent!

I would at least consider going after the bank for expenses incurred since they are actual damages you can show.

The $100k less may or may not be realistic for an owner-occupant.
There are restrictive rules at foreclosure auctions that tend to further erode the price received by the seller.
A very common one is requirements to produce 10s of thousands of dollars in essentially cash at the end of bidding (or even to be allowed to bid).
Few individuals interested in buying a foreclosure as owner-occupants can lay their hands on enough cash to participate.

I actually prefer to buy the property from the bank directly after they take possession at a foreclosure auction.
It helps sensitize them to the value of the property when they cannot get the mortgage balance at the auction and are forced to buy the note themselves.


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RE: Banks are unbelievable! A vent!

I would type up a letter stating the costs I paid, with copies of the bills and send it certified return receipt requested, to the manager of the bank involved--that is the bank where they goofed up at. Also find out the names of the other financial officers and send them a copy, notifing them for immediate repayment withing 48 hours of---date etc. Then I would go to an investigative reporter of a large TV station.
Banks do not like publicty. Of course if this was done overseas like much of the loans are, it might not work. Publicity is good!!


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RE: Banks are unbelievable! A vent!

"I actually prefer to buy the property from the bank directly after they take possession at a foreclosure auction.
It helps sensitize them to the value of the property when they cannot get the mortgage balance at the auction and are forced to buy the note themselves."

Sounds reasonable to me.


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RE: Banks are unbelievable! A vent!

I'm currently waiting for word to see if our SS offer is accepted by the bank. Listing agent told our agent less than 2 weeks ago it would take up to 90 days from this point. I know it takes a good 90 days (or more) for a SS these days but the foreclosure proceedings with the county involved started July 1st, so as of today, it's about 45 days til they can foreclose on the courthouse steps. They don't have 80 days left, maybe 40. There are 3 offers on the table that I'm aware of. If they came and told me our offer was accepted, I know, with all I've read since this process started, you can't think you GOT the house until you've actually closed on the house. I've read exactly what you said happened, happen to others and other horror stories. If we get this house, I'd die if that happened and would be mighty pissed off too!


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RE: Banks are unbelievable! A vent!

Debe: Since it is the bank that is foreclosing, they can extend the actual date that the foreclosure occurs.

I have read that in some areas the banks are letting the homes sit for many months beyond the expected foreclosure date, with property still officially owned by the folks the vacated the property. The article suggested that the banks then did not have the responsibility for grass cutting, HOA dues, etc, since they were not yet the official owner.


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RE: Banks are unbelievable! A vent!

Most REOs and SSs have addendums that state that the bank can pull out of the contract for any and or no reason, at any time before close. Read what you sign. I advise all of my clients that there is a slim chance of this happening on every deal. it should be no surprise if you read all of the addendums.


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RE: Banks are unbelievable! A vent!

Pretty sad what the banks do/don't do. The banks are stupid to let these homes sit. Just last week I rode by an abandoned home, all spray painted! Another one was so dilapitated it didn't pay for the bank to try and do anything more than tear it down.

The house currently has broken windows, garage door is broke, so there's a gap under the door - ie bugs, snakes, etc. Not to mention, there's surface mold growing downstairs due to it being humid and no air coming in. I'm doing the bank a favor by offering what I am, but if they wait much longer, it may get so bad nothing will help. Let them screw themselves by being greedy.

Also, there's a lien on the property from the HOA since April, and I'm sure the HOA wouldn't be happy if the bank purposely doesn't take it over and keep up the house. It's the worse looking house in the neighborhood - they should pay ME to take it! ;)

Trust me, if they say "you got the house" I won't believe it til we closed and had the keys in hand.


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RE: Banks are unbelievable! A vent!

If the bank forecloses they are then going to have to write down the asset (the note on the house).

This means the bank would have to raise additional capitol to comply with the reserves they must have.

By simply waiting they can continue to carry the note at value without a write down.
The owners are still on the hook for HOA dues and any other items (like grass cutting if hteir is a local law).

The local government can step up in many cases and cut the grass, and then add a lien to the property for the expense.

The bank will end up paying before they can convey a clear title, but money in the future cost less than money now.


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RE: Banks are unbelievable! A vent!

Brickeye,
Yes... good insight. Most people do not beleive me when I tell them that the bankers are not fools. They have reasons for not foreclosing on a property until later, they have good reasons to not accept a short sale now, only to have it go to foreclosure 5 months later and end up in the MLS for a much lower sales price... Just because us laymen do not have the behind the scenes details of the big picture, we should not assume that they are just being lazy, disorganized and stupid.


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RE: Banks are unbelievable! A vent!

Call the investor/purchaser and negotiate a nice profit for one day's work, say $10,000 over what they paid.

That's a $90,000 discount.

MD


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RE: Banks are unbelievable! A vent!

There may not be an " investor/purchaser" to negotiate with.
If Freddie or Fannie purchased the note it is in a pool backing a bond.
F or F OWN the note, no matter who purchased the bonds.


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RE: Banks are unbelievable! A vent!

According to the original poster this was a foreclosure sale not an assignment.


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RE: Banks are unbelievable! A vent!

Ellen/nelles has hit on a quasi- (or outright) SCAM I too have seen down here in So-Fla... to the "little guys" like us, it seems, at first blush, to be ABSURD for the bank to settle for SO MUCH less, especially when there's an OFFER ON THE TABLE!

Got screwed outta one such deal myself, left scratching my head and muttering "WTF?"... figured I'd nose around before calling the FBI or FL Atty. General...

Anyway, I think it might have to do with the bank making up the difference--AND MORE--via PMI, i.e. Private Mortgage Insurance. Can you say AIG? Can you say taxpayer takes it in the shorts, AGAIN?

OTOH, there may also be fake, i.e. "straw man" buyers/investment companies involved, somehow shilling for the motherf**king banksters. KNOW for sure the banksters are GAMING the system 6 ways from Sunday, and know for sure Obama and FEDGOD won't do squat about it.

I'm just starting to dig into this... unlike nelles, no actual $$ laid down for fees--she's GOT to make the bank fork THAT up!

The plot thickens... and sickens. GRRRrrr...


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RE: Banks are unbelievable! A vent!

That is what PMI is for!
Straw men do not buy homes.
Get over it... you lost out on a property. There are thousands more like it for sale. The bank has no obligation to sell to you nor anyone else... for a profit or a loss.
We'd all be anxious to hear back from you with facts on the plot.


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We're NOT in Kansas any more...

Straw men do not buy homes.

TRANSLATION: I have ZERO experience in the FLORIDA RE market.

Oh well, you've only got about 90 years of history to read up on. PUH-leeze... not for nothing is FL *legendary* for RE scams. Do you have a "rent-a-cow" biz in NC to help peeps keep their ag exemptions? Didn't think so.

The bank has no obligation to sell to you nor anyone else... for a profit or a loss.

TRANSLATION: I have no knowledge of how PUBLICLY-HELD banks are run or REGULATED. I am ignorant of the SEC, the FDIC, the OCC, and the OTS. I blithely believe banks can act randomly, without regard to shareholders and regulators.

Seriously, stick to your NC knitting, be glad you live in a less corrupt state, and we'll get back to you... ;')


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RE: Banks are unbelievable! A vent!

There's a fine line between 'caveat emptor' and paranoia; one needs to be careful not to fall over it.

Anytime there's a breakdown in trust (which is what the financial markets run on), roadblocks occur, if only because business procedures are in flux.

For instance, if your bank recently merged with another bank, believe me, it's a nightmare of endless administrative problems behind the scene. Incompatible computer systems make getting up to date reports an internal nightmare, let alone the jockeying for who's reporting to whom about what.

brickeyee, always a shrewd commentator here, has it exactly right. Think about it - what's that foreclosed house really worth? A couple hundred thousand, maybe?

Now - how much is that compared to the total worth of the bank? Not much, probably, even if there's several hundred SS/foreclosure properties in their portfolio.

SS/Foreclosures take a lot of internal staff hours on paperwork alone. This directly hits the bottom line, in addition to the charge-off issue and resulting need to raise capital (which isn't as difficult as it was six months ago, thankfully).

Working through the foreclosures is not going to be a short or simple process. The government can prod the banks, but in the end its up to the efficiency of each bank management team to decide how theyre going to handle losses in their portfolio, and then direct those actions downward through the ranks.

Those who hate government intervention can rest assured, the inefficiencies in the foreclosure system are the responsibility of the financial services industry. Like insurance carriers, things work well when things are going good for them, not so great when times turn bad.


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