Smart Lender or Dumb Lender?
Short Sales Increase! Are you dealing with a Smart Lender or Dumb Lender?
As short-sales continue to backup in the system, lenders scramble for solutions to the guidelines on the process, and what they're willing to accept. Some lenders have recently posted new guidelines to my team and I can't help to ponder...are these guidelines smart or dumb?
The first lender I need to speak about is HSBC. But only when they are in the first or only position. They made it clear that except for California, there will be NO forgiveness on any deficiency. WOW! So basically tell your clients that use HSBC that you will sell their property for what you can, and the rest will be on a 30 year personal note back to them! Instead of Loss Mitigation Negotiators, this lender uses Loss Mitigation Preventers. And if that's the case why do the appraisal at all, and why take so long for an answer?
Is this a smart move on the lenders part? Homeowners that I have presented this to initially said "Are You Nuts! Why would I do that?" This response is due to disparity and principal most of the time. But, quite a few have denied the sale and let the home go. Yes, I know this is worse for the seller, but I am not talking about them. If the lender would have made the right deal to settle at or around the market price, they would not have to take it back!
Taking this hard stance on their borrowers may cause this lender to take back a significant amount of non performing assets on their books (REO's). Is this a smart or dumb move on their part?
In the mean time, short sellers working with HSBC on a first mortgage, best of luck and inform your sellers! The good news is, I don't see HSBC in first position to often since they mostly focus on refinance and second money.
Frank Wible
Loss Mitigation Supervisor
http://www.shortsalenj.com/ |
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