While the New York Times cannot give a consistent cause for far-flung banking practices that is a certain sign that something is awfully fractured and that something looks to be much of the full banking industry’s mismanagement of short selling.
A recent article by Mr. Michael Powell clears up several existent banking conclusions that simply don’t make financial sense in any market. The instances, however, are in Maricopa County, Arizona.
He mentions the case of Ms. Lydia Sweetland. Undergoing the emotional ordeal of having lost a job, drained savings and retirement funds, she went for a mortgage adjustment and was summarily declined by GMAC bank. Ms. Sweetland reluctantly took in that maybe a short sale would fetch this dreadful situation to an acceptable ending for all concerned. Her mortgage balance was $206,000. She got a buyer willing to pay $200,000 for the property. That offer was disapproved and she was advised that GMAC would foreclose on her within 7 days, turning a loss of about $19,000 in the way that the bank wouldn’t have lost had they recognized the short sale offers.
In a half dozen additional cases analyzed by the New York Times, Bank of America declined short sale proposal and foreclosed at lower prices. Having accepted Billions of dollars in federal financial rescue, Bank of America and other large banks can obviously be responsible for an economically catastrophic practice that crashes human lives without a thought of logic or fairness.
Bearing thirty-one percentage of pending foreclosures in Maricopa County, this one bank is arranged to lose hundreds of millions more than essential by disapproving short sales and going forward to foreclosure. If the banking industry thinks nothing of suffering an unneeded additional 10 percent of the main balance instead of work with a buyer, they best not to be shocked when the sanctity of the contract turns null among most consumers. It’s a recommendation for economical disaster.
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“The Dog Ate My Homework”
When it concerns absurd “justifications” for unjustifiable policies, it’s difficult to overstep the excuse that children sometimes use to “justify” not having their homework answered. Take heed, however, to the “justifications” for the banks’ hesitancy to take in short sales offered by those in the know:
- “Banks are historically hesitant to do short sales, alarmed that in some way the homeowner is acquiring an advantage on them”;
- “Banks have this illogical opinion that if you foreclose and hold on to the property for six months, for some reason prices will bounce back;”
- “Computer systems of banks frequently required for and lost the same info and gave erroneous responses:”
- “Servicers can harvest sky-scraping fees from foreclosures:”
- “In a turnabout of former regulatory policy, banks can foreclose on a home and avoid writing off the loan until the home is sold, as contrary to accepting the write-down right away on a short sale;”
But It’s Difficult for Even These Moneymaking Cruel Bureaucrats to Rationalize This One:
Mr. Nicholas Yannuzzi place twenty percent down and purchased a single-story home for his wife, who had bone cancer, so she wouldn’t have to climb up stairs. Sadly, his wife later passed away, he suffered job loss and utilized his retirement funds to pay off the mortgage for the past five months. Wells Fargo Bank, his mortgage holder, disapproved his request for a mortgage adjustment and so for a short sale.
Therefore, after working diligently all his life, never having a financial trouble in the past, having five homes and in the sundown of his life, he’s now ready and waiting to be put out of his home.
Conclusion: They’re Lazy and It’s the Money
Assume that if we put off the write-downs, it will all come out alright in 6 months. Disregard the human toll this disaster is taking and “just abide by orders.” Understand that in this defective form of government we’re now in, it’s every man and woman for themselves. Timing of balance sheet losses and the Fee income considerations are now outdoing the need to treat people evenhandedly. It’s more well-to-do to “just follow procedure” than make up answers.
