DO YOU KNOW YOUR BANKS DIRTY LITTLE SECRET?

At the end of this post is an article just released by Realtor Magazine, one that is overdue in coming. What so many people don't realize is the unconscionable job that GMAC, BofA, and Chase are doing in facilitating their short sales and loan modification under the government's Making Homes Affordable program. In short, lenders make far more money by foreclosing on homes than modifying or short selling them. If that doesn't make sense, you're not alone.

But, if you're BofA... (Well if you were, first of all, you'd never answer your phone or return a call. With a great sense of indignity, you'd loose entire files full of paperwork many times over and wonder why people were upset with you, and so you'd have no friends)...you can allow a short sale and take far less than you lent , pay real estate commissions, deal with junior mortgages and tax liens and make little money. ORRRRRR, you can delay & stall by employing a massively inexperienced,underpaid, under trained and overworked staff to make a mockery out of the premise you are trying to help your clients.By taking this road, the homeowners you are trying to "help" eventually give up and walk away.

Why would you go to all this trouble and deception? Well, because once you foreclose, ALLLLL those junior mortgages, liens and bothersome homeowners go away. Yep! You now have a free & clear asset. Ohhhhh, and here's the BEST part for you. If you are BofA, you can then take that free & clear asset, and borrower 3 TIMES it's value for your own purposes. You're pretty darned smart for a bank. 'Not so great for helping your clients, but you'll be RICH!!!!

See, they don't tell you all that when they are misplacing all fifteen years worth of financials they ask you to send in. So at long last, the arrogance that has taken hold is starting to come back in a haunting way. If our Legislative & Executive branches of The Federal Government can't seem to bring these practices in line, perhaps a huge class action will.

Daily Real Estate News September 30, 2010

Second Big Lender Stops Foreclosures A second major mortgage lender, JPMorgan Chase, has stopped foreclosures so it can review loan documents for errors."It will probably slow things down for a couple of months while these documents are reviewed," said Rick Sharga, senior vice president at foreclosure listing service RealtyTrac Inc. "It won't stop things."But if Sharga is wrong and more problems surface, they are likely to slow the foreclosure crisis still more, making it drag on for several more years, other analysts say.In any case, an increased number of lawsuits are likely. Christopher Immel, a Florida lawyer who represents foreclosed home owners, says many former home owners could sue their lenders, alleging errors in documents.GMAC Mortgage was the first big lender to pause foreclosures while it reviews past files.

Source: Associated Press, Janna Herron and Alan Zibel (09/29/2010)