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Matt’s Take On the News
June 7, 2011

Who Says Politicians Can’t Be Bought!

Massimo Calabresi from Time reports on how Iowa’s Attorney General Tom Miller recently accepted $15,000 in campaign contributions from (2) individuals who have vested interest in the government and the attorney generals NOT coming down on lenders for their bad deeds. You might ask who Miller is. Miller, “…. took the lead on the investigation by all 50 state attorneys general into the “robo-signing” foreclosure scandal, where several big banks allegedly approved taking away people’s homes without adequately verifying the facts in court, as required by law in some states.”

Instead of recognizing the conflict of interest, Miller made excuses justifying the contributions. Why wouldn’t he simply return the money?

Renowned Short Sale Investor, Coach and Mentor Randy Patrick Shares with you his “Relevant To Real Estate” Video Log for Short Sale Business Investment & the Real Estate World. Learn from the Investors that operate a real short sale business that includes over 100 deals in their pipeline at any given time, multiple closings per month [...]

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Matt’s Take on The News

August 18, 2011

Have They Seen The Light!?

Shanthi Bharatwaj from The Street reports on a trend that I hope sticks. He reports that some lenders finally have realized that short sales make more sense than foreclosures. My hope is that the trend is being pushed by the investors that actually own the notes versus’ the “banks” that are simply servicing the loans. I say this because the servicing companies have a vested interest to drive properties into foreclosures. The investors that own the notes have little to gain (except being able to prolong the reporting of the bad debt until the house is actually sold).

From the article, “Lenders often consider short sales as the lesser of two evils when compared to foreclosures,” Core Logic noted in a May 2011 report on short sales. “While significant losses may be incurred in both foreclosure and short sale scenarios, the overall negative financial impact of short sales is typically less than that of foreclosure. In many cases short sales represent the best way for lenders to minimize their overall losses. In general, all parties fare better when a foreclosure is prevented.”

So, why are some servicing companies still making it painfully difficult to complete a short sale? I think its stupidity and greed.

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Matt’s Take on the News
August 4, 2011

Let’s Demolish The Homes

Lindsey Rupp from Bloomberg News reports on yet another brilliant idea that has been hatched by Bank of America. Ms. Rupp writes, “Disposing of repossessed homes is one of the biggest headaches for lenders in the United States, where 1,679,125 houses, or one in every 77, were in some stage of foreclosure as of June, according to research firm RealtyTrac Inc. The prospect of those properties flooding the market has depressed prices and driven off buyers concerned that housing values will keep dropping. “BOA takes bull dozers to the “decrepit” houses!

The move can make sense. Meaning, if the property is in such a state of disrepair, BOA argues that it costs them less to demolish a property that they can’t sell when compared to the cost of upkeep, taxes, insurance etc. This, however, is a very reactive position to take. A more proactive position would be to approve short sales before the houses become blighted and turned into REO’s.

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Matt’s Take on the News

August 2, 2011

Child Labor

Well….not quite. Sam Morris from the Las Vegas Sun reports on a program in Vegas that I think should go nationwide. Juvenile probation officers are utilizing juvenile offenders to clean up abandoned, bank owned properties as part of community service hours that must be fulfilled.

The program develops discipline among the kids and also helps the kids learn a fresh set of skills. The county saves money as well by not having to pay private contractors to do the same work. I see no reason NOT to transpose this idea/program to all states…do you?

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Matt’s Take on the News
July 26, 2011

“Waive” Goodbye!

At least that’s what our friends at the banking institutions want to go. Gretchen Morgenson from the New York Times reports on how the lenders want to weasel out of future lawsuits by shelling out a few deniros now. In other words, the banks are negotiating with the various attorney generals to pay some type of fine but they want to eliminate all future liability. As Ms. Morgenson puts it, “If the releases in any settlement are broad, there will be joy in Bankville. If they are narrow, the banks will probably face more litigation, something they would rather avoid.”

According to Ms. Morgenson, the root of the banks evil is the MERS (Mortgage Electronic Security System). “A looming issue relates to the potential liability stemming from the Mortgage Electronic Registry Systems, or MERS. This company, owned by the major banks, was set up in the mid-1990s by the Mortgage Bankers Association, Fannie Mae and Freddie Mac. Its goal was to expedite the home loan process.

By eliminating the need to record changes in property ownership in local land records, MERS ramped up profits for lenders. In 2007, MERS calculated that it had saved the industry $1 billion over 10 years. An estimated 60 percent of all home loans were registered to MERS.

But the MERS machine started to sputter during the foreclosure crisis. Lawyers challenged MERS’s ability to bring foreclosure proceedings because the system does not technically own the security or note underlying properties, as required. While some courts have not objected to MERS’s foreclosing in place of banks, others have.”

Unfortunately, the Attorney Generals are all elected officials. My hope is that the AG looks toward the future rather than the present. $20B sounds like allot of money for the banks to pay, but in reality it represents a small sliver of their future earnings. The simple thing to do is to take the money and run. The right thing to do is to hold the lenders accountable for their actions.

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Matt’s Take on the News

June 30, 2011

Illinois home foreclosures up 5 percent in May

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Matt’s Take on the News
June 28, 2011

Do You Facebook?

Sam Debord brings us an interesting post that involves one of the most visited websites in the world…Facebook. A couple in Australia defaulted on their mortgage. Presumable they were playing hide and seek with the bank because the bank couldn’t find them … The bank was trying to serve them foreclosure papers. Some industrious little Ninja from the bank took a gander at Facebook…low and behold guess who they found? Yep…the sellers! The sellers were served their papers over Facebook! According to Mr. Debord, Australian courts upheld the process!

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Matt’s Take on the News
June 23, 2011

“No end in sight to foreclosure quagmire”

NBC Channel 11 reports on how we continue down the rabbit hole of foreclosures. The government has introduced program after program that had great intentions but have delivered minimal results. The blame game is always played but never finished. Unemployment continues to rise while our economy plummets. The banks hold back the inventory of houses that they own. Servicing companies stretch out the process for endless periods of time. Some buyers are being ostracized in this market…I could go on and on……..rather than you listening to my rants, read the article and let me know your thoughts.

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Matt’s Take on the News
June 21, 2011

Going to the Well!

Once upon a time, Wells Fargo was a joy to deal with when purchasing short sales. They were responsive, timely and reasonable in their request. As of late, they have caught BOA it is…..or maybe they hired some genius from BOA! Either way, they have become a very cumbersome company.

On a recent short sale, Wells was in second position. They denied the short sale because “they didn’t like the buyer”! WTF! I can’t wait to see how much they like the buyer when the property is sold at auction for a 36% discount to retail versus 9-15%……oh…..I forgot….Wells is servicing the loan so they WAN’T the property to go into foreclosure so they can bilk the investor who owns the note for even more money!

Read the article below. According to Mark Calvey of the San Francisco Business Times; there was a posse at the annual Wells Fargo get together (aka their annual meeting) who expressed their disgust as to how the company is being run. I’d love to know how many buyers of short sale properties with portfolios owned by Wells are turned away. Compare this figure to the same stat involving mortgages that are being serviced by Wells. I’ll bet the numbers are dramatically different.