If these sellers decided that they didn’t want to wait the 48 hours he gave people to submit their offers, then all he had to do was call back the other contenders so they could participate. But instead, the agent blew off eveybody to make the quick deal, a common event with short sales:
If you are crazy about having a big ocean view, and need it like you need air to breathe, then pay whatever it takes to get what you want – it’s only money.
But logically, let’s cap the view premium at $100,000 max, to help moderate your enthusiasm – if you pay more than that, it better be a phenomenal view, and include other perks like south-facing for ample sunshine, lots of privacy, and a big flat backyard.
More from cutting room floor…
We’ve mentioned before the brazen attitude of the realtors who sandbag their short sales until approved or ready to close, and then input them on the MLS for all to see.
Apparently it never occurs to them that they are displaying all the incriminating evidence, let alone tanking the comps for the rest of the neighborhood with un-tested (not on open market) sales prices. They must not think anything is wrong – heck everyone else is doing it!
I see two or three of these every day in North SD County Coastal:
Justabroker mentioned SB 1178, backed by the C.A.R. Here’s their pitch on why the non-recourse law should apply to refinances:
California has protected borrowers from so called “deficiency” liability on their home mortgages since the 1930s, but the evolution of mortgage finance requires the statute to be updated. Current law says that if a homeowner defaults on a mortgage used to purchase his or her home, the homeowner’s liability on the mortgage is limited to the property itself. The law has worked well since the 1930s to protect borrowers, ensure the quality of loan underwriting and allow borrowers who are brought down by financial crisis to get back on their feet.
Unfortunately, the 1930s law does not extend the protection for purchase money mortgages to loans that re-finance the original purchase debt — even if the re-finance was only to gain a lower interest rate. Recent years of low interest rates have induced tens of thousands of homeowners to re-finance their mortgages, yet almost no one realized that by re-financing their mortgages to obtain a lower rate, they were forfeiting their protections. These borrowers became personally liable for the balance of the loan.
C.A.R. is Sponsoring SB 1178 Because:
SB 1178 is fair. Home buyers, and lenders, entered into the purchase with the idea that the mortgage would be non-recourse debt, and that the lender would look to the security (the house) itself to make good on the debt if the borrower cannot. It meets the legitimate expectation of the borrowers, who have no idea that they are losing this protection by a re-finance. Homeowners didn’t know that their re-finance exposed them to personal liability, and new tax liability, on the note. It would be unfair to allow a lender, or someone that has purchased a note from a lender, to pursue the borrower beyond the value of the agreed upon security.
SB 1178 is consistent with the intent of the orginal law and simply updates it for modern times. Current law was intended to ensure that if someone lost their home to foreclosure, they wouldn’t be liable for additional payment. Since the law was passed over 70 years ago, homeowners re-financing from the original loan to lower their interest rate has become commonplace. The 1930s legislature didn’t anticipate how mortgages would change over time.
Lenders could pursue families to collect this “deficiency” debt years down the road. Under current law, lenders have up ten years to collect on the additional debt after a judgment has been entered on the foreclosure. Years after a family has lost their home, they could find themselves in even more financial trouble. Lenders could even sell these accounts to aggressive collection agencies or even bundle them into securities. The end result would be banks who didn’t lend responsibly in the first place coming after families for even more money that they don’t have.
SB 1178 does NOT apply to “cash-out” re-finances, unless the money was used to improve the home and it doesn’t apply to HELOCs.
The C.A.R. video (1:39 min):
Hat tip to Mike, who sent this from the nytimes – I wish the associations of realtors would be more exclusive, and kick out the scumbags!:
Several Hamptons real estate executives said Tuesday that they had been contacted by Justice Department officials seeking information about a listing service that has been criticized as an effort to keep smaller agencies from having access to the area’s best properties.
The service, known as Realnet, allows members to share their listings with other members. Last year, George Simpson, who runs his own real estate listing company, sued more than two dozen local brokerages and Realnet. Mr. Simpson said that because only larger brokerages could afford the annual fee, which he said ranged from $15,000 to $50,000, those brokerages ultimately controlled “80 percent to 90 percent of the exclusive real estate listings.”
Three brokerages named in the lawsuit — the Corcoran Group, Brown Harris Stevens and Prudential Douglas Elliman — declined to comment or did not return calls. Realnet did not return a call and an e-mail message seeking comment.
By August, Mr. Simpson had withdrawn his lawsuit and said that he planned to refile his case under “different circumstances” and continue “moving forward with the crusade.”
But the original case apparently caught the attention of Justice Department officials. Mr. Simpson said that in the past month, he spoke for 90 minutes by telephone with several department employees about the structure of the real estate industry in the Hamptons and which firms dominated the market.
Members of a multiple listing service post their sales listings for other members to see; nonmembers could be at a disadvantage because sellers generally prefer to have their homes placed on listing services and exposed to as many potential buyers as possible.
John Nickles, a broker based in Southold and the chairman of the multiple listing service for the Hamptons and North Fork Realtors Association, said that he was interviewed on May 5 by two Justice Department lawyers, an economist and a paralegal. Mr. Nickles said that his brokerage could not afford the more expensive system; he pays $160 a month for access to the local multiple listing service that he leads.
Joe Kazickas, owner of an Easthampton real estate company that runs a Web site called Hamptonsrentals.com, said he was scheduled to speak to Justice Department officials on May 24. He said that smaller brokerages that could not pay for the costlier listing database would find it “very difficult to compete.”
The rest of the tour, in search of evidence that some squishdown is causing RSF Covenant properties to head towards $1,000,000 – but not finding much. Is it just a matter of time?
This is a two-part cruise around the 92067 to see if there is more hope that ranch properties might be slipping closer to the $1,000,000 mark. Jeeman had seen this too, and sent it over when the price was $999,000 to $1,350,000, but by the time I arrived, the price had already been raised to $1,200,000 to $1,350,000.
Another agent had gotten there first, and was marveling at the oppotunity. Most agents try to strut their stuff in a competitve situation like that, but I play stupid, hoping to learn a little something when they let their guard down. He starts raving about what a great buy this is, and then takes the key with him when he leaves, saying he’s just going to make a copy.
It looks like the sellers have abandoned the house, and hopefully they don’t mind if they get a little extra exposure here – if they do, it’ll be removed:
The latest update from Kelly Bennett on the big condo scam:
Jim McConville needed help to pull off a massive mortgage swindle. He couldn’t let the banks making the mortgages know that he was sucking at least $120,000 each out of more than 80 condo sales in Escondido and San Marcos in 2008.
He got the help he needed, federal prosecutors say, from Bay Area escrow officer Donna Demello of Stewart Title of California.
Demello cloaked the payments to McConville by creating two versions of the official receipts from the real estate deals, according to prosecutors. One version included the payout to McConville’s company. The other version, the one that went to the banks, didn’t.
The payout would’ve been of special interest to the lenders because it could have signified that the price they were making a loan for was inflated.
In any real estate deal, the escrow officer has a big job. Escrow is supposed to be a neutral third party, a kind of impartial holding place for all of the money involved. The escrow officer disburses the money following instructions agreed upon by all parties.
In this case, escrow wasn’t neutral, prosecutors say. They allege Demello was a key part of the mortgage scheme McConville orchestrated using straw buyers to purchase hundreds of condos throughout California. New details about those roles emerged in an indictment released Friday, which charged McConville and five others with conspiracy to commit fraud.
In North San Diego County, McConville picked up condos for a low price from distressed developers and arranged for them to be sold to buyers who’d rented their identities to him, our investigation showed.
By arranging high purchase prices, McConville could pay off the developers and rake in a chunk of money for himself on each condo — a payout the developers’ records showed to be more than $12.5 million on just the San Marcos and Escondido properties.
http://www.voiceofsandiego.org/housing/article_7db297a8-6233-11df-b2a8-001cc4c03286.html
NEW YORK (CNNMoney.com) — Pressure is mounting on loan servicers and investors to reduce troubled homeowners’ loan balances…but the two largest owners of mortgages aren’t getting the message.
Fannie Mae and Freddie Mac, which are controlled by the federal government, do not lower the principal on the loans they back, instead opting for interest rate reductions and term extensions when modifying loans.
But their stance is out of synch with the Obama administration, which is seeking to expand the use of principal writedowns. In late March, it announced servicers will be required to consider lowering balances in loan modifications. And just who would tell Fannie and Freddie to start allowing principal reductions? The Obama administration.
Asked whether they will implement balance reductions, the companies and their regulator declined to comment. The Treasury Department also declined to comment.
What’s holding them back is the companies’ mandate to conserve their assets and limit their need for taxpayer-funded cash infusions, experts said. If Fannie and Freddie lower homeowners’ loan balances, they are locking in losses because they have to write down the value of those mortgages. Essentially, that means using tax dollars to pay people’s mortgages.
The housing crisis has already wreaked havoc on the pair’s balance sheets. Between them, they have received $127 billion — and recently requested another $19 billion — from the Treasury Department since they were placed into conservatorship in September 2008, at the height of the financial crisis.
Housing experts, however, say it’s time for Fannie and Freddie to start reducing principal. Treasury and the companies have already set aside $75 billion for foreclosure prevention, which can be spent on interest-rate reductions or principal write downs.
“Treasury has to bite the bullet and get Fannie and Freddie to participate,” said Alan White, a law professor at Valparaiso University. “It’s all Treasury money one way or the other.”
Though servicers are loathe to lower loan balances, a growing chorus of experts and advocates say it’s the best way to stem the foreclosure crisis. Homeowners are more likely to walk away if they owe far more than the home is worth, regardless of whether the monthly payment is affordable. Nearly one in four borrowers in the U.S. are currently underwater.
Principal reduction in the long run will lower the risk of redefault,” said Vishwanath Tirupattur, a Morgan Stanley managing director and co-author of the firm’s monthly report on the U.S. housing market. “It’s the right thing to do.”
Meanwhile, a growing number of loans backed by Fannie and Freddie are falling into default. Their delinquency rates are rising even faster than those of subprime mortgages as the weak economy takes its toll on more credit-worthy homeowners. Fannie’s default rate jumped to 5.47% at the end of March, up from 3.15% a year earlier, while Freddie’s rose to 4.13%, up from 2.41%.
On top of that, the redefault rates on their modified loans are far worse than on those held by banks, according to federal regulators.
Some 59.5% of Fannie’s loans and 57.3% of Freddie’s loans were in default a year after modification, compared to 40% of bank-portfolio mortgages, according to a joint report from the Office of Thrift Supervision and Office of the Comptroller of the Currency. This is part because banks are reducing the principal on their own loans, experts said.
So, advocates argue, lowering loan balances now can actually save the companies — and taxpayers — money later.
“It can be a financial benefit to Fannie Mae and Freddie Mac and the taxpayer,” said Edward Pinto, who was chief credit officer for Fannie in the late 1980s.
What might force the companies’ hand is another Obama administration foreclosure prevention plan called the Hardest Hit Fund, which has charged 10 states to come up with innovative ways to help the unemployed and underwater.
Four states have proposed using their share of the $2.1 billion fund to pay off up to $50,000 of underwater homeowners’ balances, but only if loan servicers and investors — including Fannie and Freddie — agree to match the writedowns. State officials are currently in negotiations with the pair.
“We remain optimistic that we can get a commitment from Fannie, Freddie and the banks to contribute to this strategy,” said David Westcott, director of homeownership programs for the Florida Housing Finance Corp., which is spearheading the state’s proposal.
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