We know that mortgage companies are closing right and left and that people are being laid off in huge numbers from those companies. Companies such as Countrywide, American Home Mortgage, Capital One and others have issued thousands of pink slips.
We hear that 5.12 percent of all mortgages were delinquent as of the end of the second quarter (June 30) which predated the real catastrophe in the credit markets and Conventional Wisdom is predicting some 1.7 million foreclosures over the next year.
But we are also hearing disquieting news about responses to these problems and that individual attempts to resolve them are being buried by the sheer number of problems that are clogging the system.
For example:
- An investor who does short sales (buying
property facing foreclosure at current value even if that is less than the
amount due on the mortgage) reports that loss mediation employees at a mortgage
servicing company he is dealing with are juggling ten times the number of
files they usually handle. He claims that one employee has 1,500 requests
for short sale decisions on his desk versus the usual 150.
These are complicated transactions that involve an evaluation of the property and the borrower's ability to pay and can take weeks to sort out. Even when an attempt is being made to resolve a collection issue the foreclosure clock usually keeps ticking and delinquent accounts may end up in the attorneys' hands even while loss mediation people are trying to work out a settlement. Thus additional fees and another layer of bureaucracy play into the equation.
� - Investors who are ready and willing to purchase property pre-foreclosure
and who have had their purchases approved by the lender are waiting many weeks
just to obtain a payoff amount in order to close the deal while the lender's
attorneys proceed apace to complete the foreclosure, apparently unaware of
the settlement agreement.
� - We hear that even the most proactive of borrowers who attempt to get out in front of collection activities are spending hours on hold and are getting little help once they reach a real person to talk with.
Those are the rumors about the default part of the problem. We also hear that hundreds of buyers and sellers were abandoned at the closing table when American Home Mortgage closed its doors and that tightened lending standards have torpedoed home mortgage commitments that were, as fall as the borrowers were concerned, good to go.
Then there is the job fallout. We have a pretty good handle, if we had the heart to add it all up, on how many mortgage officers and their support staff is out of work. But how many jobs in related industries such as construction, title transfers, appraisals, and real estate sales support are also gone?
None of this is the type of information that shows up in government reports or can be researched on the Internet and we don't expect to draw statistical conclusions. But we are curious about the little stories, things that have happened to individual buyers, sellers; stories from people who are about to lose their homes or those who suddenly find themselves unemployed. They are little stories but they can ultimately have an enormous impact on all of us.
Do you have such a story? Have you lost out on a house you were all set to buy? Are you in the midst of a foreclosure and are finding it impossible to talk with your lender or get any help in resolving the problem? Have you been caught up in a foreclosure fraud scheme? Are you an investor with cash who cannot get a decision from your seller's bank or a real estate agent watching deal after deal slip away because of stricter lending standards or cancelled commitment? Do you have a story about desperate tactics on the part of sellers trying to unload their homes?
Tell us about it; nothing fancy, just the details. You don't have to provide your name unless you want to but please provide the name of your city and state. Submissions may be edited for length or clarity.
Click here to share your story or if you know someone that has a story to share please forward this to them. All personal information will remain private.
