Realtors can never get old or outdated, our industry changes so fast that it leaves us no time or choice:
always moving forward and always learning new models and how to deal with a crazy and non-stop real
estate environment. If that wasn’t enough, Illinois is requiring all Realtors to move up to Broker status
by 2012 at the tune of many more hours of class time and studying!
As the national/global meltdown began we found ourselves selling homes with no equity and in most
cases way below the even mark. Besides retooling ourselves, it was not an easy task to sit with sellers
and tell them the value of their homes had gone south, they were up-side-down and yes, we’ll need
your check book at the closing table.
So we transacted higher numbers of short sales by spending countless hours negotiating with lenders
who were not happy to take less, tax issues and homeowners associations just to mention a few. Along
with that we usually have one or more junior liens just to spice up the equation and they will kill a deal
for just a few hundred dollars, just because they can in a short-sale scenario.
The fine printing was hiding the other eight hundred pound gorilla: deficiency judgments; just when you
thought you had it all covered, the lender wanted to recover the unpaid part of the short sale from the
homeowner after the fact. Some lenders packaged the unpaid balances/individuals and “sold” them in
“bundles” (here we go again with bundles) to collection agencies who will tie you up in knots for the
next several generations.
If the short sale didn’t do the homeowner in, then foreclosure came in from the back side and put the
homeowner out on the street. Now Realtors are doing BPO’s and watching vacant properties fall apart
for months/years while the lender/new owner follows the due process to regain possession, along with
ownership, of the same home.
Three to four months after the judge awarded the property, on the conservative side, the home comes
out of redemption and the real work begins for the needed repairs. Now the home is ready and a buyer
buys it in good faith. This should be a happy beginning for a new homeowner who got in at a nice
reduced price and has a growing family.
Not so. That final judicial deed could in fact be tainted. As the homeowner’s loan was sold a few times
from one holder to the other via “securitized bundles” the paperwork did not necessarily follow as it
should have. The big guys were too busy making huge money on each bundles’ turn that there was no
time for the paperwork. Now the final note holder may not have the “paper right” to foreclose on the
non-paying borrower/homeowner.
Realtors are still in all of this and left watching out for their clients as well as their very own survival. As
they submitted offers on foreclosed homes, on line or in hard copy form, the lender/seller would require
them to fill in certain blanks assuming all liabilities on the property from general conditions to possible
title problems the lenders created.
The Paul Paterakis Power Team and RE/MAX Showcase quickly brought liabilities back on the lenders’ laps where they belong with our own Addendum/Rider which allowed us to submit all offers and prevented us from assuming the lender’s liabilities via their required fields. Imagine a seller, other than lenders/sellers, who tell the world, including Realtors: when you submit an offer and purchase this property you are taking on all the past liabilities on the same property including clean title to it! Is this not absurd? Look out, it’s very real and lawsuits are going on right now in various parts of the country on this very issue.
Currently we are in a moratorium phase with only a handful of lenders closing transactions, but not
really resolving title issues. We are looking at a future full of lawsuits and if the national/global economic
meltdown didn’t shut a company down, these kinds of lawsuits will. The damages and legal fees will be
unbelievable.
Very sad and painful to accept the fact that entities outside of real estate made billions on the way up
with all that “bundling”; they are now making as much money on the way down and we are left holding
the bag and paying for their careless quick money turnovers. Inflated home prices going up, blow out
home prices going down and a few more years needed to “stabilize” the market.
On the positive side just under ninety percent of homeowners with a mortgage remain current while
more than a third of all homes in the U.S.A. have no mortgages on them at all. The good numbers are
huge compared to the distressed mortgages and homeowners. Going forward changes will be needed to
assure ourselves and future generations that this misery will not be repeated again.
When we talk about low accident rates or any kind of low statistics it is very easy to accept them on
their face value; however, we must keep in mind that even a small one percent foreclosure rate is
everything to that one individual who is now on the street while the other ninety nine individuals are
just fine.
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