Lenders make more money on foreclosures than from short sales or loan modifications. He caused an earthquake in San Francisco. When loan modifications are turned down, the next thing we attempt is a short sale.

As such, we should know that these loan servicing companies make MORE money by letting the properties foreclose than to approve the short sales OR the loan modification. So I researched this topic and found a few articles worth reviewing. How did I miss these? Was I under a rock in a desert? ORG REPORt ON " Why Servicers Foreclose when They Should Modify And Other Puzzles of Servicer Behavior".

Do Mortgage Lenders Make More Money when a Loan Goes iInto Foreclosure? Foreclosures Are Often In Lenders' Best Interest. Numbers Work Against Government Efforts to Help Homeowners. Why Lenders Are Slow To Provide Loan Modifications. Drop in foreclosures called "very scary". Lender's actions show they think properties are not worth pursuing. Mortgage Companies Make More on Foreclosures Than They Do Modifying Existing Loans. This blog refers to the news article on Huffington Post.

Huffington Post, June 8, Banks Blocking Way Out of Foreclosure Crisis. Huffington Post, May 15, Lenders tend to stick with more familiar foreclosure process, losing money for everybody. Huffington Post, November 2, KNOCKING OURSELVES OUT TRYING TO HELP. So are we engaging in self-flagellation helping our distressed clients with their short sales and loan modification? Or are they stalling and withholding their help because they know their leaders would rather have the property burn into foreclosure?

There oughta be a law! Banks take our hard earned money Good info and just what I thought. I would love to be a fly on the wall in some of these companies as they receive contracts from us. It's all feels like a game and they have all the right cards and already know the end play.

Wow, when will all of this mess ever end? Pacita, thank you for the article links and a very informative blog. Yes, there should be a law, and I so feel for home owners - this shouldn't be happening. On a postive note, I have seen alot of short sales finally going through in my area - who knows I like Norm see realtors using the distressed short sale to line their pockets more than to be helpful.

They are taking advantage of the person in distress. I want to make clear I am not trying to characterize in whole all the realtors.

'Mortgage Prof': 5 Reasons Banks Would Rather Foreclose - AOL Finance

Here is my problem, there are so many so called short sale experts and I am qualified to state the majority of the agents that engage in short sales do not know how or are just plain lazy and sloppy to get the job done. My experience is three fold, I am licensed as a loan officer, I have practiced lending sincereal estate since and in I was employed by Bank One Financial Services which is now Chase Bank.

My position was REO analyst I worked along side a the loss mitigation specialist. The main reason the bank does not sell short is the ineptitude of the real estate professional who calls him or herself, "Short Sale Specialist.

I am afterall in this profession to make money but having said that I also believe in sound economic and business principles which drive consumers to me like honesty, hard work, realistic analysis and consultation. When I use the term professional I believe that term means trusted source not experienced, the best or biggest, but trusted. I want the consumers trust, I want to turn the view of realtors as a bad profession as we are viewed to a good trusted profession. I have noticed that when it comes to short sales realtors cry we need to have government regulation and I stated those realtors are greedy as they are looking to government to force the banks to sell short.

The banks are part of the economic equation and need to do what is in the best interest of the bank which has many depositors and investors whose retirements, life savings, college funds, Christmas funds I find the call to action by the realtors as whole sale greed and counter productive to the free economy. Yes banks make money on foreclosures but the bank selling short is usually not the one buying the defaulted paper.

The bank selling short loses the money at foreclosure and the one buying the bad asset and selling for profit is in the business of REO and most likely is not the original lender or holder of the note. They are purchasing at a discount in order for the losing bank to receive instant funds for their bad asset. Their is an incentive for the bank who has the bad loan to sell short again the problem is there are too many short sale experts who do not know the first thing about a short sale.

These agent can not get a normal listing so the prey on the distressed person who actually needs a real expert and professional not some cracker jack marketing specialist spending big advertising dollars to announce that they are the saviour coming.

I sell REO properties and occasionally I will get a short sale listing and to date I have sold everyone I listed. Now validating Norm, I ask all the agents here have you ever tried to sell a short sale where you were on the selling side not the listing side? I do not even try anymore as it is near impossible. It is not the banks fault it is the ignorant agent specialist whose only specialty is knowing how to get the short sale listing, they do not know the first thing about getting it approved.

I have sat in many short sale consulting seminars and the main thing taught is how to get the listing, not hoEveryw to get it approved. In this current market of distress too many agents are going after the short sale and the designation, why?

It is the path of least resistance thus the greed is disclosed by action. Lastly, the MLS systems are requiring us to disclose short sale on MLS. First problem it is not in the best interest of the home owner to do so as it gives up their confidentiality which we as realtors are suppose to guard as a priority of our ethics.

Second a short is not short until an offer is written, I do not care if it is listed short. The actual sale is not short until offer is accepted short. Disclosure of short sale should come at time of counter offer where seller states that buyer is made aware offer is short of pay off and requires third party approval. This gives buyer the option out or come higher in price. Also disclosure of short sale or distress sale puts seller at a disadvantage right out of the starting line in negotiations as the motive to sell is disclosed.

Is this not against the law or our ethics? What it market short, bidding war happens and actual acceptance covers payoff and expenses? Not short, so short does not come until offer is written short and seller is willing to accept. To me our MLS systems are not protecting clients right to confidentiality and this I find to be paradoxical to what is the code of ethics and a deligitimzation of the realtor organization.

This is all about greed and technical indicators for intraday trading making money.

If we look to find the banks guilty of wrongdoing I say two wrongs do not make a right. We are feeding the greed and we are not a solution to the crisis we are furthering it, we are aiding in the devaluation of America's assets, Real Estate. There are so many things in that 14 page post that I disagree but the most startling is binary options forum golden goose comment that "banks make money on foreclosures".

banking - How do banks lose money on foreclosures? - Personal Finance & Money Stack Exchange

What universe do you live in where a bank is actually better off financially by selling something for less and from do mortgage companies make money on foreclosures single piece of data I have ever seen, a lot less than what they lent somebody for it??

But lets start with this questions first. 24 hr binary options demo app your vast experience as a loan officer over these many years, do you claim any responsibility for the "reason" there are so many short sales and foreclosures on the market now?

Or is it just easier to throw the blame on somebody else because you eventually plan on running for office and need the votes?? The amount of work and the length of time it takes for a short sale to be approved is hardly lucrative, when we can pour that energy into other types of sales that require less work, less time, less angst. I represent both buyers and sellers of short sales who are genuinely in need of help.

Some of these short sales are condos that are worth half of what they were when the clients bought the condos. Will anyone get rich with this sale? My long term objective: We never gave up on this client In all the years of doing short sales do mortgage companies make money on foreclosures what action is best for binary option trading software, we only lost 3 of them.

One because the client's attorney insisted they let it go to foreclosure, the other was due to the bank's unwillingness to do anything other than foreclose, and the third because the client gave up and simply disappeared Pacita, well said in your last comment.

Mark, you seem to be giving a lot of credit to someone who calls Realtors that specialize in short sales "sleaze-balls", but has his own website promoting his short sales services as a Realtor.

I don't think that referring back to Norm's post in agreement did much for your own credibility. I see some passion and if you read my e-mail I stated define forex swap window in general but not towards all realtors. YOu maybe the exceptions. Yes I do advertise them, no I do not get many but do not turn them down when I get them.

I have an inside knowledge of the banks xmlrpc server call method options working from experience in that field and I know what the bank is trying to achieve in total from end to finish of the default process.

My contention that realtors are greedy is that they call for legislation of the short sale process, this will cause more harm forex email lists for sale good. The realtors main reason for legislation is to make the transactions happen. The bank has a criteria by which it makes happen. I have much compassion for those in trouble.

I have done more to keep people in the property than short sell. I will post a letter from one who I saved from sheriff sale the day before it happened as his and his wife's testimony. To further this I helped the husband get involved in church, drove him from the mission center in Milwaukee to Lake Geneva where he received counseling for his addiction.

That is an hour drive one way. The problem is what I say is taken personal because of pride and protection. Most agents tell me that this business is all about perception, mine is all about reality. My word is backed by action. Again I am not going to state not all agents are this way but the current market agents are financially suffering and I am seeing more cut throat actions.

As for me advertising short sales I do because I can you will not I do not place expert in that ad but compared to seminar school trained agents I am an expert as I was on the decision making side working in the bank. As for the specialty of short sale I the best indicator of 100 percent for binary options been to a few seminars on this and the main focus is osaka securities market to identify the candidate and how to get the listing, not how to make the transaction work.

The banks they need us, but they need a qualified us. Selling someone elses short sale listing is a nightmare. You put an offer in most do not repsond, you ask the agent who does respond if they have sent off the loss mitigation package and most do not even know what is in it. This is most and not all. The original article here is about banks making more money by foreclosing at 24hr binary option trading excel is not true.

The servicers make more money by foreclosing, if you get to the lender not the one holding how earn money online in india without investment you will get to the true decision maker who is ulitmately are bonds traded in the stock market crashes the loss and will be willing to short sell.

As for those who have fallen to tragedy because of the foreclosure, lost husband, job, disabled Yes I feel bad for them. The bank has a duty to keep the ship afloat and we should not ask government to regulate more than necessary. The more regulation, the more taxation.

The more legistlation the lower the profit if any left and you, your parents, family members and friends, who are the investors, depositors and so forth will lose. Why because the realtors how do i lend books on my kindle fire calling for legislation of a process they are not knowledgeable.

What Norm has stated I have seen where the distressed is taken advantage of. Why not do the short sales for free? I help the distressed maintain their homes for free, it takes as much work to do a re-write, a forebearance. Since I have been in this business both as loan officer and realtor I have given away a lot of free advice.

I do so to my benefit as I receive many referrals and I gain trust. I can not count on the referrals but the golden rule must work. No I do not think you should do the short sale for free. I stand by my statement of greed as when I sat as a loan officer I had many agents ask me to do things that I did not believe is ethical to get a loan through. This is what caused me to become and agent. I am going to give blame to the agents for aiding the foreclosure crisis as willing accomplices.

I am tired of hearing agents blame someone else, the appraiser, the lender We have a duty to push the sales price but we also have a duty to safe guard the public trust so there has to be a balance and this past heated market was not just the banks, the blame can be spread all around. The realtors want the tax incetive pushed to purchase, they want the banks regulated, they also cheered when the 0 down, non verification loans were happening. Now they cry when the out of balance market has led to distress and the lending programs have disappeared.

bankrate-logo

Shoot the lending guidelines today are not as strict as when I started back in Also I am not calling the agents sleazy are as fewer the than the best. Greed is not bad for an economy to work but greed unchecked is allowing those to operate out of norms and my belief from experience is many going into the short sale field are looking for the easy way to shore up their income loss due to current market conditions.

They are doing so without the quality needed. Greed unchecked got us here in this current distressed market. When I was an asset manager for the bank I attended the REO conferences having the name tag on my short made me that of celebrity status with every agent at the conference wanting my attention, every agent offering a kngdom in return for their services.

Nothing short of bribery, gifts, and such. I felt like a politician in front of the lobbyists. Pure disgust, pure greed. Short sales are for those who can not get the work directly from the bank so they go to the distressed seller as saviour.

Sorry if I offend, this is my challenge to my profession and my fellow professionals. If you are one who does the job required then great. My specialty was VA and FHA I had no room for lending irresponsibly. In the nine years I activey originated loans I only originated 5 FNMA loans, that was before the flex programs, the pay option arms I put my focus on real estate with free giving free financial planning to set first time buyers on the path to home ownership.

My practice speciatly at that time was first time home buyers, it was 7 years before I had my first listing.

I am a conservative and I believe in responsibility. No I am not running for office I feel I can do more service on the outside. Lastly, I stated banks do not make more by foreclosing. The author of this artlicle I believe has it wrong, I did not read the links she has placed but the servicers make the money off foreclosures not short sales.

The actual lender loses, the serviers have no incentive to sell short, they just service as trustee. Re what you said, " The author of this artlicle I believe has it wrongI did not read the links she has placed but the servicers make the money off foreclosures not short sales And I still think generalizations are dangerous as you are sure to offend hard-working, honest realtors who should not be lumped in with some you perceive as anything but.

Right off the start in my comments I stated I am not trying to characterize as a whole. What more can be said. Your post started with servicers which is correct it is not in their best interest to represent their clients the lenders.

They profit by servicing through the foreclosure. The articles you posted links to which I did not read because they are mostly about banks and lenders.

The banks those with the money lose when foreclosure happens. Your last statement there oughta be a law is the crux of my point. There ought not be a law but the lenders oughta do what is in their best interest.

Do you have a bank account? Do you have k, IRA, Mutual funds? A law means more regulation which requires more taxation on our end and on the end of those who have these accounts with banks will see less revenue for their deposits and investments.

I know there are good hard working, honest and ethical agents but why is that the real estate industry as a profession is ranked in the low part of consumer confidence? Ever hear of colloquial expressions? If you had clicked on that linked expression, it would have taken you to writing.

This fact became obviously a year ago when I watched several homes in my farm go through the foreclosure process. We stillti need to try to do short sales, but every party has to really be interested in participating. If the buyer is not fully informed by their realtor through their signatures on explanatory documents, then I recommend to my sellers to wait for a buyer who will be more likely to hang with us through the process.

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Lenders make more money on foreclosures than short sales!? By Pacita Dimacali Real Estate Agent with Alain Pinel BRE November 07, He caused an earthquake in San Francisco When loan modifications are turned down, the next thing we attempt is a short sale. Did he just confirm what we were afraid of?

Why Lenders Are Slow To Provide Loan Modifications Dayton Daily News. This blog refers to the news article on Huffington Post FLASHBACK: Banks Blocking Way Out of Foreclosure Crisis FLASHBACK: Are the short sale servicing companies really trying to help? Is there no resolution in signt? Re-Blogged By Re-Blogged At. Comments New Comment Subscribe to Comments Back to Top.

You must sign in or register to leave a comment Login Register. Show All Comments Sort Oldest to newest Newest to oldest Most Popular. You stirred up quite a firestorm with this one!

West, Las Vegas, NV. Carolyn Hawkins, Realtor Associate - Allison James Estates and Homes, Inc. But why do we do it? Reasons for helping REALLY!

My short term objective: Pacita, Very well put, and I wholeheartedly agree with you How about this example: According to Mark and Norm, it was GREED! Again, show me you are the expert, stop looking to blame the banks. Jason, My specialty was VA and FHA I had no room for lending irresponsibly. Pacita, Right off the start in my comments I stated I am not trying to characterize as a whole.

Mark Ever hear of colloquial expressions? I look forward to your post inviting others to comment. Older Post Newer Post. Generate More Leads from this Listing. Find what you need? See More Blog Posts About Real Estate! What's the reason you're reporting this blog entry? Spam Not original content Violates community guidelines Are you sure you want to report this blog entry as spam?

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