Home > Uncategorized > This Bank Makes me “Sick”!

This Bank Makes me “Sick”!

Ok, so maybe I had a momentary lapse of reason when I gave Kudos to a very large bank in my previous post for making a one time exception to their short sale policies (see – http://wp.me/pEAFk-1I).  You’re not going to believe the uneducated decision making of an almost as large bank located thousands of miles away from a HIGHLY distressed development located in Florida…

In July 2009 we wrote a letter to the CEO of one of the “Mortgage Giants” that collapsed indicating that it was very frustrating to deal with them as we submitted a short sale request to them 4 months prior and they still had not reached a decision.

As a short sale facilitator, who has processed hundreds of requests, this was not ordinary as we normally receive a complete response within 60-75 days (from most banks).

Anyway, the bank responded to our letter within 72 hours and indicated that the $200,000 offer on the property was declined because it was too low.   They were right; 3 prior sales over the past 6 months averaged higher than the offer price but was within “range” of what banks typically consider.

We immediately responded to the CEO and informed him of the change of events over the past 6 months which justified the offer.  These events included the fact that 38% of the Condo Units in the development were in foreclosure and there were over 40 “like kind” units on the market.  We pointed out that many additional units had Liens on them from the Condo Association which were not yet in foreclosure and that conventional financing was not available for the units as they were not FHA or Fannie Mae approved.  WE ALSO INFORMED THE BANK THAT THE BUYER IS ALL CASH AND IS READY TO CLOSE IMMEDIATELY.

The bank responded by counter offering at a price exceeding the estimated market value.

We responded by informing the bank that their counter offer was too high and that the buyer was going to cancel the offer.

The bank “dug in its heals” and the buyer cancelled.  Fortunately, a new buyer arrived.  Unfortunately, his offer was lower than the first one received.  The bank is currently considering the offer (almost a year after submission — cha-ching!).

Here’s the really illogical part:  It is reported that the developer is 4 months in arrears on their dues to the condo association and has no intention of making future payments.   We’re told that these past due amounts equate to over $400,000.   It is also reported that the developer’s representative has instructed the management company that they will need to place a lien on the 111 units (+/-) which the developer owns.   It is also reported that the arrearages due from 65 non-paying homeowners exceeds $600,000!  According to my math, it appears that the association is due over $1,000,000 with additional defaults forthcoming.  I CLASSIFY THIS AS A “SICK” DEVELOPMENT! Oh yea, let’s consider two other things:  (1)  the bank could have been paid off 7 months ago; instead they continue to lose $1,000’s every month and (2) the Condo Association would have had one less homeowner in distress thereby improving the health of the development — albeit nominal, but every payment counts to the association.

But, all this is  ok, because the bank who is controlling this short sale, from thousands of miles away with no understanding of the local marketplace, has it all under control … don’t they?

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