About Temecula's temecula

I wrote a blog on this a long time ago, and sadly, the topic comes up again as I sit here tonight listing out all the reasons I really wish to bring this topic back to light once again

Our market is still an REO driven market, we still have about 25% of all active listings in our area being either REO or Corporate Owned homes. Over the years, the hitters have been "swapped in and out" as they gain and lose major clients, but when the dust settles, the same issues still exist with the major REO Brokers and agents in this area, and honestly, I would be shocked if it didn't exist in your hometown.

I only wish the banks could see how the agents they choose to hire conduct business. I wish they could see the tens of millions of dollars they lose anually due to these unethical listing agents. Now, I am sure you would like me to explain exactly what the agents do that have half the buyers agents in my town in a total UPROAR, so please enjoy the bullet point presentation below.

• The Infamous Double End. They love to pull this card. You will have a home listed at 200,000. They will have outside offers in up to 250,000. Yet, surprisingly, everyone gets the same "Rejection email", assuming the agent is even nice enough to send you a rejection email! You follow the listing, only to see it close 3-4 weeks later at...... WAIT FOR IT..... $200,000! SHOCKER! And what's even more amusing, they think because they put "Out of Area Agent" as the selling agent on the MLS, that agents are to stupid to figure out they were the ones who sold it.

• The "Take 2 weeks to even acknowledge they received your offer. Often times, I have agents submit offers on my companies behalf, and it has become rather customary to not expect so much as an acknowledgement for weeks on end. Again, I am not sure how the banks don't care about this, so I will assume they know nothing of this, but in my opinion if it takes you more than 24 hours to simply acknowledge an offer, you should be FIRED ON THE SPOT!

• The "I refuse to submit your offer because you didn't approve with my best friend the broker... ERR I mean lender". I love this one. The listing is a Chase bank listing yet they ask you to approve with John Doe with 123 lending. Even when your buyer is 20% down, conventional financing, approved with a reputable DIRECT LENDER, they still REFUSE to input your offer into the seller's portal, something that again, they should be FIRED ON THE SPOT for!

• Here is my favorite and newest one! The "Your offer is less than my seller will want to see, therefore I am not submitting it". No, this was not a misprint! I actually have seen this response sent to my preffered agency, SCA Real Estate, Tom Bashe Broker. The listing agent refused to submit a $220,000 cash offer on a listing listed at $245,000! I'm sorry, but you should have charges brought against you by the seller for not doing your job! It is NEVER your call whether to submit an offer to the seller. You are not the offers GOD. Your job is to get your clients home sold! Not your job to pass your own judgements on offers that come in!

I am sure there are many many more examples of this throughout the country, so please share! Nothing IRKS me more than REO listing agencies that can't manage to do their job correctly, and when their "games" they choose to play cost their clients tens of millions of dollars throughout the years, someone NEEDS to put an end to it! I pray all the major banks get this blog, and start taking a better look at the agents they choose to use.

Many people are probably delighted after B of A's news release this past week. Who wouldn't be excited to have the amount they owe reduced to market value? According to recent statistics nearly 1 in 4 homeowners owe more than what their property is worth. Here are the five states that have been hit the hardest:

•1. Nevada, 70% of all mortgaged properties were underwater

•2. Arizona, 51%

•3. Florida, 48%

•4. Michigan, 38%

•5. California, 35%

So, what are homeowners to do? We all know the Government's attempt to resolve this problem has come up short, not to mention the huge percentage of re-defaults on loan modifications.

In rides B of A to save the day, at least for Countrywide originated mortgages. Bank of America rolled out National Homeownership Retention Program (NHRP). Yes, another four letter acronym! I hope this four letter acronym has more success than the ones in the past, but I'm not going to hold my breath.

The reason I'm not convinced this is going to help as much as people think it would is due to a few reasons. Let's first determine who is eligible for the NHRP:

•1. Only Countrywide originated loans before Jan 1, 2009. But not all of their loans...read on.

•2. Only their Subprime, Pay Option ARMs (Option ARMs) and prime-quality two-year hybrid ARMs.

•3. The loan must be delinquent by 60 or more days.

•4. The amount of principal owed must exceed the property value by 20%

Let me make sure I understand this, the fastest growing segment of defaults are Prime "A" paper loans (watch Ryan Smith with Realty World & Associates talk about this on video at http://theshortsaleminute.com) and they are not eligible for NHRP? Huh? Can anyone tell my why? Hello executives at B of A, where did you come up with these qualifications?

Next, let's look at how they will accomplish the principal reduction. During the five year NHRP period, Bank of America will set up an interest free forbearance account for the amount of principal owed above the current market value of the home. How will B of A determine the fair market value? Maybe an over-inflated appraisal which Countrywide was so accustomed to using to originate these loans? Sorry....back to the example. If the homeowner owes $550,000 on a home that is worth $350,000 and qualifies for NHRP, B of A will establish a separate non-interest bearing account of $200,000 (the difference from what is owed and fair market value) while the homeowner makes payments on the $350,000 at the current market interest rate. The homeowner will not be responsible for payments on the non-interest account.

During the first three years of NHRP, B of A will reduce the separate account ($200,000 from the example above) by 20% each year IF THE HOMEOWNER REMAINS CURRENT. Did you read that? IF THE HOMEOWNER REMAINS CURRENT. This translates to $120,000 will be forgiven after three years from the example above. If after this three year period the homeowner is not underwater (owes the same amount on their mortgage than their house is worth), B of A will no longer reduce the principal. If the homeowner is still underwater, B of A will continue to reduce the principal for an additional two years.

I am concerned with the following: the homeowner must remain current for either the three year or five year NHRP period. What happens if they are late? Does this offer become null and void? I think many of the people that got caught up in this mess never intended to default on their mortgage(s). I don't think they went into this to scam the lenders....yes, some bad seeds did, but the majority didn't realize they would be out of work within a few years after buying their home. My concern with NHRP is for the same reason I don't like the HAMP or any other modification programs....I think it's delaying the inevitable. To qualify for this program you must be at least 60 days late; which means you're not paying your lender. In rides B of A dangling the hopes of principal reduction. A year into this program and you're suddenly laid off, you're company is downsizing! Guess what, you're booted from NHRP and in the same, if not worse situation as you were before. I've seen this happen time and time again with HAMP.

The bank you pay your mortgage to doesn't care about you, they come up with programs that help a few of the many people struggling. They play on your emotions and know you will scrape together every last penny in hopes of saving your home. They take a non performing loan (delinquent by 30+ days) and squeeze out as many payments from you before you're faced with losing your home to foreclosure. People thought the 6+ month trial period for a loan modification was long, the NHRP is a three to five year trial period!

As stated on my website (http://www.theshortsaleminute.com) If you owe the bank $100 that's your problem. If you owe your bank $100 million, that's the banks problem.