With his permission, I’m reprinting some comments made by Florida businessman Felix Santiago on Activerain.com, the excellent networking site for real estate agents. Santiago is in the business of helping homeowners negotiate the sale of their homes for less what they owe the bank— a process known as a short sale. I am in no way endorsing this business, but I think it’s good to get a lot of different voices on this blog. Everything that follows are the words of Mr. Santiago.
“ANYONE THAT TELLS YOU THEY KNOW THE SECRETS OF DOING SHORT SALES, RUN FROM THEM AS FAST AS YOU CAN! AND HERE ARE THE REASONS WHY…
The lenders still are not sure that what they are doing is right FOR THEM. They are constantly changing their short sale and loss mitigation process to figure out what will make the most return on the loss. It will change at the whim of those assigned to review the pipeline disaster that is their loss mitigation. And, time and time again, the changes usually are not for the best. They only further complicate the process. The banks are in the business to lend money. The whole loss mitigation and short sale business is still a blur to them. Think about how absurd this business is…they will forgive $300,000 on the property without blinking, but will kill a short sale for the remaining $5,000.
The housing crisis is NOWHERE NEAR A BOTTOM! The biggest reason for this is the tremendous amount of inventory. And I’m not simply talking about the inventory in the lender’s hands. I’m talking about inventory yet to be taken back. There are millions of homeowners living in their homes for free. I have clients going on 2 and 3 years without a mortgage payment. The lenders and their investors are simply overwhelmed by this crisis and they would rather see someone in the property taking care of it. Once they foreclose, they are responsible for all the bills on the house. Only 30% of the lender inventory is even available for sale. Nearly three times the current inventory is pending foreclosure. And unless everyone behind on their payments gets back to work and starts paying their mortgage, the crisis will not be going away any time soon.”
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.