BAD COLOGNE & GREAT INFO..THE SACRAFICES ONE MUST MAKE

I'm back from two rain soaked days at the C.A.R. Expo. While the cologne & perfume were a bit much, there were some VERY educational seminars. Yesterday was spent in seminars on the short sale/ REO market. These weren't rah-rah speeches and self-congratulatory forums by any stretch. Almost across the board, from lenders, to REO/short sale agents, to Ray Mathoda, one of the brightest banker/entrepreneurs I've heard, the overriding opinion is that short sales are now, and will be, the foremost sale transaction in the real estate industry. And the single biggest factor in short sales will be H.A.F.A.

Now if you're asking yourself, "What the hell is HAFA?", I would strongly suggest calling me and pulling up Google. To get you started, below is a link to Real Estate Magazine. When you open it up, go to Page 20. You'll find a very informative overview of HAFA.
http://www.onlinedigitalpubs.com/publication/?i=46004

As a homeowner or Realtor, if you've been through the HAFA hell so far, you probably don't believe a word of this. However, HAFA is now in it's 6th month of existence. As this process becomes more streamlined, so too should short sales One of the astounding figures that was given yesterday is the fact that there are/will be some 12 MILLION short sales in the coming years. HAFA may very well be the real estate version of a standard loan application.

But why short sales ? Why now?

Well there's a couple of reasons why:

Reason#1- The rocket scientists that brought us all "Pick-A-Payment Loans" finally figured out that they tend to loose their a$$ in REO's. Nothing hurts a banking conglomerate quite like loosing money.

But the single biggest reason is:
Reason#2- Because of the banks' disorganization, bad tracking, blind arrogance, and unwillingness to negotiate, people and states started to get attorneys to sue lenders for improper actions during the foreclosure process:
Click Here To Read The Washington Post Article On Foreclosure Problems

So given this very recent development, lenders may very well be more willing to do complicated things like...answer the phone.

BANK OF AMERICA'S BAD AIM

"He Who Forecloses From A Glass House, Should Be Careful With The Stones He Throws"

OK, so I'm not as artful as some when it comes to proverbs. Below is another article about BofA's mismanagement of their short sale and REO properties. My last blog entry dealt with a very similar aspect regrading GMAC, so I won't bore you with repeating the details. Please have a look at that as well. Being in the industry that I am, I deal with all of these fine & upstanding institutions on a daily basis. I think it's safe to say that almost to a person, those of us trying to work with BofA's REO and short sale departments find it to be the most intolerable, mis-managed, perhaps less than forthcoming company out there.

Below is an article from today's Los Angeles Times that politely sheds a little light on what arrogance can do to a company:

By E. Scott Reckard, Los Angeles Times
October 2, 2010

Bank of America freezes evictions in 23 states
The bank cites concerns over whether its foreclosure paperwork was handled properly.
By E. Scott Reckard, Los Angeles Times

Citing concerns over whether its foreclosure paperwork was handled properly, Bank of America Corp. on Friday put evictions on hold in 23 states — joining two rivals that have taken similar steps.

The freeze is taking place in states where courts have jurisdiction over foreclosures, Bank of America said. It will not apply to California and 26 other states where foreclosures usually take place without a court order, but the action could put added pressure on banks to ease back on foreclosures more broadly amid high unemployment and continued turmoil in the housing market.

State Assemblyman Ted Lieu, a Torrance Democrat who has written a series of mortgage-related bills, said a moratorium on foreclosures might be appropriate even though California doesn't require court orders before homes are seized.

"I've been thinking perhaps we should start calling for [a moratorium] in California," said Lieu, co-author of SB 1137, the 2008 law requiring lenders to attempt to contact borrowers and to document that they tried before foreclosing. "My suspicion is that the same folks who are doing false signings in other states are likely doing the same thing here with regard to SB 1137's requirements," he said.

Detroit-based Ally Financial Inc. halted evictions in the 23 states last month after the head of Ally's document processing team acknowledged in a deposition that he signed thousands of affidavits certifying that foreclosure paperwork was correct even though he hadn't read the documents.

JPMorgan Chase & Co., the giant New York bank, suspended its evictions this week after problems surfaced with signatures on some of its affidavits.

Charlotte, N.C.-based Bank of America — which became the largest mortgage customer-service provider when it acquired Countrywide Financial Corp. in 2008 — followed suit Friday.

"To be certain affidavits have followed the correct procedures, Bank of America will delay the process in order to amend all affidavits in foreclosure cases that have not yet gone to judgment in the 23 states where courts have jurisdiction over foreclosures," the bank said in a statement.

The affidavits are required to be filed in court when banks make motions for summary judgment to obtain foreclosure orders from judges.

The bank didn't disclose how many borrowers were affected by the eviction freeze.

Also on Friday, California Atty. Gen. Jerry Brown said he would require Chase to prove that it is complying with California foreclosure laws, included a requirement that loan servicers meet with homeowners to explore loan modification options before seizing houses. He previously demanded the same of Ally.

The banks have said they believe the information in the affidavits — such as how much is owed and when the mortgages went into default — is accurate even if the affidavit signers didn't take the time to read them thoroughly because of the glut of foreclosures.

Ally, formerly known as GMAC, includes Ally Bank and Residential Capital. It is the fourth-largest originator of mortgages and the fifth-largest mortgage servicer. Chase is third in both categories.

The largest California-based bank, Wells Fargo & Co. in San Francisco, is the No. 1 mortgage originator and the second-largest servicer, after Bank of America.

Wells Fargo issued a statement saying it was satisfied that "the affidavits we sign are accurate," but it stopped short of certifying that they were all properly signed.

"We audit, monitor and review our affidavits under controlled standards on a daily basis. We will stand by our affidavits and, if we find an error, we will take the appropriate corrective action," Wells said.

scott.reckard@latimes.com
Copyright © 2010, Los Angeles Times