Your odds are better at winning in Las Vegas than against the banking industry and the administration they control.
MORTGAGE EXPERT, DETROIT, BIRMINGHAM, BLOOMFIELD, ROCHESTER, ROYAL OAK, TROY, MICHIGAN
DETROIT, MI – Wouldn’t it be fun to kidnap the CEO’s of Chase, Bank of America, Citibank and Wells Fargo, hold them somewhere with just the bare living essentials and force them to negotiate loan modifications and short sales with their own customer service departments to earn their freedom?
Imagine their frustration as they have to wait on hold forever, speak with poorly trained, clueless staff who can’t find the documents they’ve faxed or emailed for the umpteenth time and have to keep starting over.
It’d make a great movie! We could call it, “Groundhog Accountability Day for Bank Executives”.
“Sigh”. Unfortunately, that’s a fantasy and reality is what we have to deal with.
Why are the big banks so difficult to deal with? Why don’t they seem to understand that they lose more money when they foreclose on properties than when they negotiate a loan modification or short sale?
Perhaps it’s we who really don’t understand where the money is made.
Do you really think that banks are able to have 24/7 customer service for credit cards and other loans, but can’t seem to come anywhere near that for loan mods & short sales? Do you really think, given technology that can track a package mailed to Timbuktu online, that faxes and emails really get lost? How hard is it really to train someone to do a loan modification or short sale?
Consider this - Chase bought WAMU in September of 2008 for all of $1.9 billion dollars. For that they got a bank with almost $310 billion in assets, $188 billion of it bank deposits. Now Chase will tell you that the deal wasn’t that great as they had to absorb a hemorrhaging mortgage portfolio of $176 billion that they immediately wrote down by $31 billion. That’s true, but hides what really is going on.
If you ignore all the other debt and assets, Chase got $176 billion in home loans for $1.9 billion. That’s just over 1% of face value. Assuming an average loan balance of around $300,000, that’s almost 600,000 mortgages and corresponding homes. That means they paid an average of only $3,000 for each of those loans. Even if they foreclose on the ENTIRE portfolio, do you think they can make money by reselling houses they got for $3,000 each?
In January of 2008, Bank of America paid $4 billion for Countrywide. Countrywide serviced about 9 million loans valued at $1.5 trillion dollars. Do you really want me to run the numbers on this deal?
The failed IndyMac Bank was sold earlier this year to a group including George Soros and Michael Dell, under the name OneWest. Sheila Bair, the head of the FDIC, had made IndyMac her personal guinea pig project for testing out aggressive loan modifications to slow foreclosures. OneWest issued a press release at the sale, stating they would continue to pursue the FDIC’s loan modification and short sale strategy. How long do you think that lasted? Try calling IndyMac now for either and see how far you get. Better yet, call Dell computers and ask them how you can customize your loan modification online just like you can order a computer.
So what incentive do these banks really have to approve loan modifications and short sales?
Who created this financial bonanza for Wall Street? The financial geniuses in Washington D.C. They could have put in place restrictions and requirements tied to the purchase of these banks, but they didn’t. Is this something they could have mistakenly overlooked? Not likely. So, this means our wonderful administration in Washington is allowing the banks to make money off the tax payers that bailed them out.
Nice. Now what are you going to do about it? Probably nothing, as it’s easier to just tune into the latest reality show on TV.
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Not Fair, First I would make them cold call for a year or so and work for 5 or 10 % on huge commisions being generated so that they know what it feels like. Then years later after finally bulding up a nice business, let them show up and find out hey, your no longer working here and not getting a paycheck because the bank has no money. Then you make them do loan mods !
ReplyDeleteGosh Drew, this is a really ugly situation, huh? I have a realtor who is wanting to open a fee based note mod business. I've not shared my thoughts with him, but this is one reason why I do not want a piece of that business model.
ReplyDeletecountrywide made be servicing a lot of loans, but they didn't own any of them. rest of it is accurte - there's no incentive for the bank to work with you.
ReplyDeleteExcellent points made have you researched all of the Wall Street Firms that have opened numerous FULL SERVICE MORTGAGE BRANCHES in each indivual state? Amazing they make modification or refinancing so difficult now for the mortgage broker and consumers alike, here comes Wall Street to the rescue again they will be able to streamline portfolio's and profit while we are once again shut out.
ReplyDeleteHang them all from the nearest utility pole!!!!!!
ReplyDelete