Kent Dills BS, MS, e-PRO

As any agent (Listing or Buyer's Rep.) or home owner who is currently working - or has tried working in recent past - knows, doing short sales is made much more complicated and extremely slow to process partly because of the following:

1. Banks are under-staffed and unprepared, and

2. The loss mitigators we are dealing with are ill-trained and inexperienced

3. Those in charge at the banks seem to be "in the dark"

Example, the other day I was trying to negotiate a loan modification (versus short sale - they wanted to stay in the home and had the means to) for one of my clients with IndyMac Bank and had reached an impasse with the loss mitigator I was speaking with. What I normally do at this point (whether loan mod. or short short) is ask to speak with a supervisor.

Now I don't always get to speak with a supervisor, sometimes they offer to send the supervisor a message via their "system", sometimes I have to leave a voice mail, and others offer to raise my issue to "the escalation team" is what I think Wells Fargo calls it. Regardless, there is a means for raising or escalating the issue. Once done, I'm almost always able to get some satisfactory resolution. Not always; but usually! ;-)

This was different than my loan mod. experience with IndyMac Bank. The person I was speaking with told me that they didn't have a supervisor or escalation team that I could talk to, voice message, email, etc. I didn't think that was right so I hung up and called back to speak with someone else in Loss Mitigation. Unfortunately I was told the same thing - no means to escalate.

Regardless of what my specific issue/sticking point was, EVERY BANK'S LOSS MITIGATION DEPARTMENT SHOULD ALWAYS HAVE IN PLACE A SYSTEM FOR ESCALATING ISSUES.

Ultimately I found out that what I was being told WAS WRONG and I could have found this out much sooner, saved me and - more importantly - my client much stress, etc. if there had been an escalation process in place. I'm still not sure if the Loss Mitigation folks I was talking to were ill-trained, ill-informed, or just lying. Yes, I have had them lie to me before. Don't mean to be negative - just trying to keep it real.

So...every bank should have an escalation process for loss mitigation issues. And knowledge of the escalation process would enable well-informed agents and home owners to escalate issues when appropriate. That would help facilitate both efficient and effective short sales and loan modifications (as most banks already know).

P.S. If anyone has any knowledge of IndyMac Bank's Loss Mitigation escalation processes, I'd be extremely interested in hearing from you.

During the past couple of weeks I've heard the conversation about homeowners who are getting help (read bailout) turn very ugly. The conversation goes something like this, "well why should they (yes - the proverbial "they") get help when they put themselves in that position? Shouldn't they have to suffer the consequences?"

Judging by the number of different directions - and the absolute number of different voices I've heard this from - I'm left to believe that the values and thought process behind this ugly conversation is shared by a large percent of homeowners who are not in similar "distressed" situations.

Here's what I think about this ugly conversation and the thought process and values leading to it:

1. First, for those folks who simply haven't managed their finances correctly (and won't qualify for assistance because they don't have a valid hardship), this scenario will sort itself out via short sales, deeds-in-lieu, and even foreclosure.

2. Second, let's make a conscious effort to sort the first group of people (above) from a second group. This sceond group consists of those folks who are in valid distress situations. Those folks (some of whom are our neighbors, friends, and relatives) are in distress primarily for 4 main reasons:

a. job loss,

b. divorce,

c medical situations, and

d. loan/escrow account readjustments.

These are valid HARDSHIPS as we refer to them in the relevant lingo. Most folks wouldn't wish any or all of these situations on anyone let alone their neighbors, friends, or relatives)!

3. And, let's let the deciding (read - judging) of who's in the first or second group to those qualified to do so. In other words, let's assume folks are in the second group until it appears not to be the case.

4. Let's all feel really good about and give best wishes to those folks who aren't in trouble (read - distressed). That's great. You and I (we) should bear them absolutely no ill will. Why should we?

5. On the other hand, why should they bear those folks who are in trouble ill will? They should consider themselves fortunate and, maybe even, offer assistance in some way to their less fortunate neighbors, friends, and relatives. Isn't that part of "the golden rule"? Treat others as you wish to be treated. With kindness, understanding, and even respect!.

Sorry for my little rant. But I specialize in short sales and I represent folks who have had some bad things happen to them and who are facing some very tough times right now. Some of these folks are middle-aged (like me) and have worked all their lives. They've never been on unemployment or "assistance" of any kind. But now, because of a turn of events (e.g., one of two incomes lost due to very unexpected job loss) they are now between a rock and a hard place. These are the types of folks who need our kindness, understanding, and respect. They can use a little help, not doubting of their intentions or their financial prowess.

If you know of anyone in a distressed situation (as outlined above) in the DFW area of Texas, I'd be more than happy to assist them. Please refer them to http://www.DFWShortSales.net or have them call me at 817-495-8028.

Best,

Kent

Got some bad employment news from the guys (Chris & Nathan) at ShortSalesRiches.com. Check this out!

Quote.

The US Labor Department said that the jobless rate jumped to 8.1% in February, its highest month since 1983, as 651,000 jobs were lost in the month. "The sharp and widespread contraction in the labor market continued in February," stated Keith Hall, Commissioner of the Bureau of Labor Statistics. And most economists expect the unemployment rate to hit 10% before year end.

Let's look back at the last three months of carnage:

December: 681,000 jobs lost
January: 655,000 jobs lost
February: 651,000 jobs lost

Ouch.

Another bank reminded everyone today that the banking industry isn't out of the woods yet. Wells Fargo announced that it would slash its dividend to 5 cents from its current 34 cents per share. This follows the dividend reductions from JP Morgan Chase & Co., which went to 5 cents from 38 cents, and Bank of America, which went to one cent from 32 cents.

And it looks like the FDIC might get some more cash. The Wall Street Journal reported today that Senate Banking Chairman Christopher Dodd is presenting a bill that would allow the FDIC to borrow as much as $500 billion from the Treasury Department. The bill appears to have the blessing of Fed Chairman Ben Bernanke, who said that the measure "would allow the FDIC to respond expeditiously to emergency situations that may involve substantial risk to the financial system."

Unquote.

So, the need for short sales is just going to keep being strong if not increase. If you'd like to learn more about how to actually get short sales done, shoot me an offline email and we can discuss your options (from my perspective).

If you know anyone in the DFW area that needs assistance with a short sale (or loan mod), please don't hesitate to send them my way. Best way to get a hold of me is via http://www.DFWShortSales.net or by phone at 817-495-8028. Of course a referral fee would apply for licensed agents!

Best,

Kent

Newsflash!

HR Bill 1106 regarding Home Mortgage Restructuring is currently being debated on the House floor. Part of the bill has to due with changing the law to allow Bankruptcy (BK) Courts (read BK judges) to restructure mortgages for those folks in BK Court.

Now, without getting politcal, I'm just going to stick my neck out and say this - if you know someone who's filing BK - extensibly because they can no longer afford their house payment - help them avoid the BK by doing a loan modification. Don't wait for the BK judge to "restructure" the loan. MODIFY IT NOW. Help your clients avoid the extremely damaging effect that BK will have on their credit. Not to mention the stress and humiliation.

If you don't know how to do a loan modifcation - why? Have you been listening to the news lately. Even though we've been through one wave of adjustable rate mortgages blowing up and causing foreclosures, there's a whole other wave of option arm mortgages getting ready to hit us very soon.

Add to the option arm situation, the unstable and worsening job market causing layoffs and cutbacks, we're headed for situations where even more people (future clients) won't be able to afford their mortgage payments.

If you just run the numbers and count the costs, it should be obvious that the banks can't foreclose on all these people and homes. They are going to have to let some people modify their loans. Even though banks have been VERY RETICENT to modify loans in the past (I know this because I work short sales and see it every day) they really won't have any choice. Part of the Obama plan to help keep people in their homes calls for banks to let people modify their loans. And if the banks took some of the TARP money that was doled out last year - and all of the Top 300 banks did - they will be REQUIRED to do loan mods.

So, you have to ask yourself this:

1 Do you want to help your clients (and future clients)?

2. Do you want a piece of what is going to be a large market?

If the answer to these questions is yes (and you don't live in my zip code ;-), then learn how to do loan modifcations. You will be helping your clients negotiate better terms with their banks because - even though banks will be required to do loan mods - they still won't give your clients the best possible terms. So I encourage you to learn how to do loan modications.

There aren't that many places that teach loan modification. Definitely not that many that are good and reputable. I learned how to do loan mods from Time and Julie Harris and Harris Real Estate University (HREU).

If you decide to hire Time and Julie to teach you too, just tell them I sent you. This not some kind of affiliate plan, nor do I get a referral fee, I just want Tim and Julie to know that I recommended you. They might give me a free month of coaching or something! ;-)

You can find Tim and Julie and HREU on their blog at: www.TimandJulieHarris.com

Best,

Kent

Friends, if any of you know of any other friends or acquaintances who have been talking about buying a new home, and they are first time buyers, or haven't owned a home in the past three years, now would be a great time to buy!

There are three reasons I say this. One, housing costs have been going down nation-wide for the past 12, 18, 24 months depending on where you live. Two, interest rates on home loans are at or near a historical low. And three, we've just seen the enactment of President Obama's 2009 "Economic Stimulus Plan" which provides an $8,000 tax credit for first-time buyers or folks who haven't owned a home in the past three years. This represents a real win/win situation for the nation and to targeted individuals. For the nation, this is meant to provide a demand side stimulus to the depressed national housing market. For those folks who have been wanting and waiting to purchase their first home (or first home in a while), this provides real money in their pockets that can make the difference in a comfortable home purchase. It's like a $8,000 gift from mom and dad only it's from Uncle Sam.

A couple of the details of the tax credit are: used to purchase a home in 2009, does not have to be paid back like the similar 2008 tax credit, and only gets "recaptured" if sell the home within three years of purchase.

This is a great deal! Go buy your first home! Get help from a local Realtor!

For more information about the 2009 Economic Stimulus Plan (also known as the American Recovery and Reinvestment Act) checkout the following link: http://www.realtor.org/press_room/news_releases/2009/02/realtors_support_aid_to_troubled_homeowners?lid=ronav0019

For more information about the $8,000 First Time Home Buyer Tax Credit (which is part of the Homeowner Affordability and Stability Plan which is itself a part of the larger American Recovery and Reinvestment Act) checkout the following link: http://www.realtor.org/government_affairs/gapublic/american_recovery_reinvestment_act_home?lid=ronav0019

If you have any questions or would just like bounce things off a Realtor, feel free to contact me!

Best,

Kent

Kent Dills BS, MS, ePRO

Realtor, The Michael Group - Hurst

Kent@KentDills.com

www.DFWShortSales.net