The Woodlands Real Estate Voice

Washington Mutual brings the love

Realtors all have their favorite “types” of transactions.  Some love helping buyers scour the town and find that perfect place. Some love marketing listings to help sellers move on with their lives.  I don’t know too many Realtors who really love working on transactions that involve a seller who is either in foreclosure or heading that way. 

Of course there is that special satisfaction of really helping someone who really needs professional-level assistance but these deals are painful.  I am not talking about the emotions and financial stress that the Realtor assumes; I am talking about working with mortgage banks who hold the distressed mortgage. 

If you have never been involved in a “short sale” real estate transaction or known someone who has, then you probably assume that a mortgage bank would be extremely cooperative and diligent when given the option of working out a deal that would save them from expensive foreclosure actions and owning another home they do not want to own.  Yes, you would assume that wouldn’t you…. but you would be very, very wrong.

A short sale is when a home owner owes more in loans than what their home is worth so the lender is asked to accept less than what they are owed.  So:

• Home owner owes $110,000 in loan(s)
• The house is worth $100,000
• it will cost about $7,000 in sales costs to sell the home
• The homeowner asks the lender to accept $93,000 instead of $110,000
• The lender weighs the cost of foreclosure versus the cost of this loss.

The home owner is in no way entitled to the lender accepting the short sale, but with home prices declining they are typically in the best interest of everyone:

1. the home owner avoids foreclosure and settles the debt with dignity
2. the lender loses less money, owns 1 less house, and can move on to the next file
3. the agent gets compensated for making this happen
4. the neighbors do not lose as much value in their own homes since a bank-owned home will sell for less than this sale.

Saying all this, the “workout departments” for the nation’s top lenders are notoriously horrible at responding to and “working out” these types of solutions. Even with the agents doing all of the heavy lifting: putting together endless packets and appraisals and evaluations, these lenders act as though they have much more important things to do than to return phone calls, reply to emails, and answer these written requests. 

My last short sale transaction was with Citimortgage who was shameful in their behavior.  They let two contracts fail by simply refusing to respond after 3 months of waiting for an answer.  I am not saying they refused… I am saying they refused to answer which I think is criminal.  Not to the home owner but criminal to their stock holders who deserve more diligence and commitment from these mortgage banks to do everything they can to reduce their foreclosure losses.

So, now I am working on a new short sale and it is with Washington Mutual (WAMU).  I am impressed so far.

1. My first call and I got a real person who was compassionate and informed.
2. She referred me to a website setup specifically for distressed borrowers that included all the information and even a down loadable packet. Wow, so I am not going to get some beat-up application that had been copied 7 times and barely legible. Nice work. 
3. The packet… only 2 pages and only the pertinent information is asked for.
4. The messaging and tone… well read it for yourself. At the top of the page, Wamu states:

We are in this together. We all face challenges, and by working together you may have options to avoid foreclosure. If you are struggling to make your mortgage loan payment contact us today to see if we can help.

Nicely said, Wamu.

5. Finally, the web address: https://www.wamu.com/customer_service/contact_us/WaMu_Cares. Notice the last part of the URL: “WaMu_Cares“  Again, nicely done.

The final test will be how Joe who answers the phone and has 23 other short sales to handle tomorrow responds- that’s where the rubber really meets the road.

Here is some other reading on this topic from some great blogs:

• http://www.raincityguide.com/2008/10/19/foreclosure-losing-the-american-dream/
• http://www.phoenixrealestateguy.com/homeownership-preservation-workshop-coming-to-phoenix-thursday-oct-23/1338
• http://agentgenius.com/?p=5609