FDIC OneWest Deal Harming Homeowners

FDIC Is Harming Financially Distressed Homeowners and Taxpayers Via Shared Loss Agreements Such As The One With OneWest (Formerly IndyMac)

Please view this ThinkBigWorkSmall video:

The Indymac Slap in our Face. 02.08.10



The video emphasizes what I have been saying (see FDIC Hurting Distressed Homeowners, IndyMac-OneWest Harming Homeowners and FDIC Hurting Homeowners: Case 1) about the IndyMac/OneWest Shared Loss Agreement with the FDIC. In short, that agreement is seriously hurting financially distressed homeowners and taxpayers by promoting foreclosures. To add insult to injury, as the video states, the FDIC is now going to the US Treasury to obtain more money, some of which will presumably be used to fund more crooked deals like this one. This only further my belief that the only good government is a small government. Our government is far too expensive and too big to monitor and prevent legalized theft like this Shared Loss Agreement. It is particularly infuriating that George Soros, the huge Democratic campaign contributor and main funder of MoveOn.org, is profiting handsomely from this deal via his large stake in OneWest. I thought George Soros, being the big time Democrat and huge supporter of Obama, cared about poor people? Get real. I guess it pays to buy your own president. I will look for one the next time I go grocery shopping. So much for "compassion" and "caring". It is all a lie. What a disgrace!

If you are a Middle TN homeowner, property owner, condo owner, real estate investor, home builder or real estate developer who cannot pay your mortgage payments (due to losing your job, having your income reduced, illness, health problems, adverse business conditions, slow sales, loss of investment property tenants, vacancy issues, lack of funds to complete the project, feuding business partners, etc.), know that you will not be able to pay your mortgage, have defaulted on your mortgage, are already in foreclosure, or owe more than your home is worth, please contact me to discuss your options including a loan modification and a short sale (a real estate short sale occurs when the sale proceeds are not sufficient to pay off all the mortgages and liens on the property/home). I am a Middle Tennessee distressed real estate, short sale, pre-foreclosure (preforeclosure) and foreclosure REALTOR and Expert. I primarily help sellers (homeowners, property owners, condo owners, owners of high end homes and properties (estate homes, luxury homes and executive homes), real estate investors, home builders and real estate developers) of distressed real estate, short sales, pre-foreclosures, foreclosures, investment properties, failed new construction projects and struggling commercial real estate developments located in Middle Tennessee (Rutherford County TN, Williamson County TN, Davidson County TN, Robertson County TN, Maury County TN, Murfreesboro TN, Smyrna TN, La Vergne TN, Eagleville TN, Lascassas TN, Rockvale TN, Christiana TN, Brentwood TN, Franklin TN, Nashville TN, Belle Meade TN, Nolensville TN, Spring Hill TN, Gallatin TN, Springfield TN and Mt. Juliet TN). If you do need to short sell your home or property, or you need a quick sale due to being in foreclosure, you can request short sale and foreclosure help and assistance on my website at Get Short Sale and Foreclosure Help and Assistance from a Nashville Tennessee and Middle Tennessee Short Sale and Foreclosure REALTOR and Real Estate Expert.

Fannie Mae and Freddie Mac Foreclosures Surge

Fannie Mae and Freddie Mac Foreclosures Surge

According to this Real Estate Economy Watch article, Fannie Mae’s Delinquencies Rise 163 Percent in 12 Months, Fannie Mae (the Federal National Mortgage Association, or FNMA) in October 2009, mortgage loan delinquencies rose significantly.  The percentage of "seriously delinquent mortgage loans" in Fannie Mae's portfolio increased 26 basis points for a new total of 4.98%. In September 2008, when the US Treasury took over Fannie Mae and Freddie Mac (the Federal Home Loan Mortgage Corporation, or FHLMC) and placed these government-sponsored enterprises (GSE's) into conservatorship, that same "seriously delinquent mortgage loans" figure was just 1.89%. That is an increase of 309 basis points, or 163%.  Single family mortgage loans are defined as "seriously delinquent mortgage loans" if they are 90 days or more past due, or in the foreclosure process.  Multifamily mortgage loans aredefined as "seriously delinquent" if they are are 60 days or more past due. According to the article "Seriously delinquent loans eat into the company’s capital and forced borrowing from the U.S. Treasury."  Freddie Mac’s single family mortgage loan delinquency increased to a new record of 3.54% of its portfolio.  According to the article, this was the 30th straight month in which delinquencies have increased.  This is probably why the US Treasury has removed the limit on the Fannie Mae/Freddie Mac loan guarantees - they know that the losses will far exceed the previous limit.  As I have been saying since early-mid 2006, this is only going to get worse.  Fannie Mae, Freddie Mac, Ginnie Mae (buys FHA loans) and commercial banks will all be forced to handle more short sales, or risk being deluged by an overwhelming number of foreclosures.

If you are a Middle TN homeowner, property owner, condo owner, real estate investor, home builder or real estate developer who cannot pay your mortgage payments (due to losing your job, having your income reduced, illness, health problems, adverse business conditions, slow sales, loss of investment property tenants, vacancy issues, lack of funds to complete the project, feuding business partners, etc.), know that you will not be able to pay your mortgage, have defaulted on your mortgage, are already in foreclosure, or owe more than your home is worth, please contact me to discuss your options including a loan modification and a short sale (a real estate short sale occurs when the sale proceeds are not sufficient to pay off all the mortgages and liens on the property/home). I am a Middle Tennessee distressed real estate, short sale, pre-foreclosure (preforeclosure) and foreclosure REALTOR and Expert. I primarily help sellers (homeowners, property owners, condo owners, owners of high end homes and properties (estate homes, luxury homes and executive homes), real estate investors, home builders and real estate developers) of distressed real estate, short sales, pre-foreclosures, foreclosures, investment properties, failed new construction projects and struggling commercial real estate developments located in Middle Tennessee (Rutherford County TN, Williamson County TN, Davidson County TN, Robertson County TN, Maury County TN, Murfreesboro TN, Smyrna TN, La Vergne TN, Eagleville TN, Lascassas TN, Rockvale TN, Christiana TN, Brentwood TN, Franklin TN, Nashville TN, Belle Meade TN, Nolensville TN, Spring Hill TN, Gallatin TN, Springfield TN and Mt. Juliet TN).  If you do need to short sell your home or property, or you need a quick sale due to being in foreclosure, you can request short sale and foreclosure help and assistance on my website at Get Short Sale and Foreclosure Help and Assistance from a Middle Tennessee Short Sale and Foreclosure REALTOR and Real Estate Expert.

Short Sales: Demand High, but Supply Low? Banks Making It More Difficult to Close Short Sales?

Short Sales: Demand High, but Supply Low? Banks Making It More Difficult to Close Short Sales?

According to this Business Week article, Short Sales: A Fraying Lifeline for Homeowners, banks are making it more difficult for financially troubled homeowners to close short sales. According to the article, one year ago banks were responding to short sales in an average time period of 4.5 weeks and frequently forgiving the unpaid mortgage balances (i.e. the portion of the mortgage not paid off by the short sale), but now the banks are taking an average of 9.5 weeks to respond to short sale requests and frequently demanding that the seller sign a promissory for part of the shortage, or the seller (or someone else) pay additional cash funds to close the short sale. In short, one year ago banks were eager to close short sales due to their capital being depleted, but now, due to government bailout funds and record fee income (another way banks stick it to consumers), banks are being more difficult.

According to the article, "The situation could be a setback for the already wobbly housing recovery. A record one-third of borrowers owe more on their mortgage than their properties are worth, notes research firm First American CoreLogic. The number of underwater homeowners will only continue to rise since values are still falling. And if distressed borrowers can't negotiate short sales, more may be forced into foreclosure, further depressing prices. Since the housing bust, short sales have been a key part of the market. They accounted for 12% to 18% of national home sales over the course of this year. In such hard-hit areas as Miami and Phoenix, roughly a third of listings involve underwater mortgages, according to real estate brokerage ZipRealty."

The article quotes a Bank of America spokesperson as saying "A selling homeowner may be expected to reasonably participate in the shortfall on a sale, unless a financial hardship is demonstrated." According to the article, OneWest Bank has a policy which "requires borrowers who sell their homes for less than the mortgage to pay part of the difference. One West, formerly IndyMac Bancorp, was taken over last year by the Federal Deposit Insurance Corp. and purchased in March by a group of investors that includes billionaires George Soros and Michael S. Dell. As part of that deal, the FDIC agreed to eat most losses after the first $2.5 billion. Given the government's broad support of One West, some real estate agents and sellers are frustrated that the lender wants a promissory note—especially in cases where the government is picking up some losses." Again, this distortion of the market is due to government intervention. If the government had not provided any backstop for the losses incurred by this investor group they would be forced to deal with market realities instead of a government created profit opportunity. On another note, it is interesting to see that George Soros is making money by sticking it to sellers in financial distress. I find this particularly hypocritical since Mr. Soros is a major campaign contributor to the Democrats who supposedly "care about people". Anyone who thinks the Democrats are not using this financial crisis to financially benefit their largest campaign contributors on Wall Street, etc. needs to rethink their position (just look at all the money Barack Obama, Chris Dodd and Barney Frank received from AIG, Freddie Mac, Fannie Mae and George Soros).

According to the article short sales are further complicated when there are 2 different lenders involved, which usually happens when there are 2 or more mortgages on the property. The 2nd lenders, in particular, are demanding 5% of the sale proceeds in order to satisfy their 2nd mortgages. Thus far, I have not personally experienced this demand, but we will see. The article does mention that new government rules to encourage short sale transactions are imminent, but I personally do not have any hope that this government knows what they are doing so I don't think the rules will help much.

Based on the proven fact that lenders lose less with short sales versus foreclosures (due to less legal fees, property holding costs, maintenance costs, etc.), the banks should be favoring short sales, and, therefore, actively encouraging them. The question then is why are the banks making short sales more difficult? My guess is that the banks get more government bailout funds when they foreclose rather than approve short sales since with short sales the banks are voluntarily accepting their losses. I haven't seen any actual documented proof of why the banks are being difficult with respect to short sales, but there has to be a reason. Therefore, I think it has to do with the government bailout funds. Unfortunately, the indisputable conclusion of all of this is that more foreclosures will occur as a result of the actions taken by the banks.

If you are homeowner in financial distress the most important information to take from this article is that short sales are difficult to close so you should hire a knowledgeable short sale REALTOR to sell your home. This is different from the normal recommendation that a seller hire a neighborhood expert. Closing short sales requires a different skill set so you will need a different type of REALTOR to close your short sale.

If you are a homeowner in Middle Tennessee who cannot pay your mortgage and your home is worth less than the amount(s) you owe, please contact me to discuss selling your home via a short sale. I am a Middle Tennessee distressed real estate, short sale, pre-foreclosure (preforeclosure) and foreclosure expert and REALTOR. I serve real estate owners, homeowners and investment property owners in Rutherford County TN, Williamson County TN, Davidson County TN, Murfreesboro TN, Smyrna TN, La Vergne TN, Eagleville TN, Lascassas TN, Rockvale TN, Christiana TN, Brentwood TN, Franklin TN, Nashville TN and Belle Meade TN.

If you need to sell your home fast you can request help on my website JimTheRealEstateExpert.com and my Active Rain profile Jim McCormack's Active Rain Profile - Short Sale REALTOR and Real Estate Expert.