Maxine Golden\’s Podcast, Blog and Links
The big guys are meeting in Washingtown
Trying to draw a conclusion
Watching once-aspiring deals fall down
All mired in confusion
The old guard members stroll the lawn
Accidently squashing roses
With flaring nostrils we hear the sound
Of roots upturning ancient poses
The younger guard is standing by
Unfettered by tangled pieces
It won’t be easy, it will take a while
To sort through all the fieces.
This is an original verse sent to me today by one of our listeners.
Last night, podcast #31 of Mom Talks Real Estate tested a new format. We went to a streaming live videocast in a talk show format. It was a surprise sneak preview to an audience of about 500.
The topic was the Sunday federal government takeover of Fannie Mae and Freddie Mac, including possible implications for the real estate market and homeowner/homebuyer.
After a brief overview, the audience questions came quickly. With so much audience involvement, we shortened the presentation to address related issues that the listeners wanted to discuss.
It may be posted as Podcast#31 (rather than video format) and I hope that by listening to it we all can judge the effectiveness of the test. During the talkshow, I thought we were jumping too quickly from topic to topic and opinion to opinion, but it was fun, and right or wrong, I was required to think and react immediately ”on my feet”.
If we do future videocasts or talk show formats, I know that we will improve.
After speaking live to a reactive world wide audience, I thought about what knowledge I gained from the participants. I gained a new mantra, which I will use to preface and frame all future discussions. It is:
Real Estate is a local phenomenon affected by personal, regional, national, cultural, geopolitical and often global events. No other product or service can be described this way.
The following is an outline for podcast 26, given 6/2/08, which should be posted shortly.
Definition of Short Sale: Selling a home for less than the value of one’s mortgage(s), with the permission of the lender(s)
Advantages of short sale vs. foreclosure
So, with all the advantages, why is it a “long shot”?
1. Lender may not agree to accept less than owed.
a. Original lenders out of business; servicers or receivers
b. Each loan may have multiple lenders/investors
c. PMI company may be covering part of loss, thus may need foreclose to prove loss; lender reluctant to negotiate until mortgage insurer agrees
d. Lender may decide borrower doesn’t have hardship or value is higher
2. May not find lender because of sold loans, automated phone systems, or lender has closed down
3. Property in foreclosure - no time to finish negotiations
4. Listed below market to generate offers, thus may be multiple offers. Buyers are kept out of the pool for other purchases.
5. Experienced vs inexperienced asset managers or loss mitigation specialists. Outsourced negotiators could be working for sellers and banks, thus involving more people, layers of adminstration and delays.
6. Lender may agree only if seller brings cash to closing or signs note for some or all of shortage. Seller may be unwilling or unable to do so.
7. Buyer might not be willing or able to wait for the 2 weeks to 4 months + for lender negotations/decision
8. Whole neighborhood values affected by lower “teaser” offering price (see#3 above). Thus buyers may find other good choices while waiting for lender’s decisions. Also, property values could change during the long process, necessitating new appraisals, new decisions, etc.
Buyers are still hopeful, sellers are hopeful, agents have found an easy way to obtain listings (easy because there are no out of pocket costs to sellers), new short sale negotiation companies have been developed.. However, the current system may make offers for short sales a waste of time or at the very least, a long shot.
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