Social media to the rescue of an under water homeowner

by Rob Regan on February 11, 2013

If you’re like me you’re just a bit tired of hearing people blame homeowners for their foreclosure or distressed mortgage situation. Yes there were some people making really dumb decisions, but many, many people simply bought a home, and then things changed. This is a heart wrenching story of a real estate agent, and her real estate husband who not only saw their incomes dry up when the housing bubble burst, he then got cancer and is now waiting to die.  But Bank of America apparently would rather foreclose on them then do a loan modification. Trust me, I’ve seen this before with two short sales of mine where one lender point blank said they’d rather foreclose and then did, and another lender put up impossible obstacles and timelines which told me foreclosure was their clear preference.

As you read in the story the agent used social media to get the attention of Bank of America, and just maybe they’ll let a dying man spend his last days in his own home, and a women with an overwhelming crush of bills get a more manageable payment so she can keep her home.  I realize the haters will say “tough, if she’s can’t afford it she has to sell or accept foreclosure.”  Not knowing the exact circumstances I’ll just state that usually the owner has an interest rate much higher than today’s sub 4% rates, and no lender will refinance because the home is underwater.  If she were to get today’s interest rate, that alone may make the home affordable to her.

So why won’t lenders refi their own loans?  In some cases there is a business case for foreclosure being the more profitable option.  However, in this case the author of the article and real estate agent owner of the house makes her case that BofA will do worse in foreclosure.  This too is not at all unusual.  I brought an offer on one short sale listing that the lender rejected, only to foreclose, and then sell the property as a foreclosure for $100,000 less than the offer.  So this story is entirely believable to me.

There are a lot of other bizarre and borderline fraudulent things that lenders do in the short sale/foreclosure world.  One is that the lender handling the short sale isn’t actually the lender.  The loan was sold to an “investor” and so you’re dealing with a “servicer”.  Often times servicers get paid to service, and once the transaction is over with they lose a revenue stream.  So what do they do?  They drag their feet for months on end to the detriment of both the “investor” and the homeowner and this almost always leads to a foreclosure that didn’t have to happen.  If I had to bet, I’d bet that BofA is just the servicer in this case, and that is why this loan modification has dragged on for 3 years and was about to end in foreclosure.   This is just one reason I get so annoyed when I hear homeowners are to blame.

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