Fannie Mae

Here’s the (my) Answer to WHY
Banks Make Such Crazy/Illogical/
Sometimes Stupid Decisions! (Part III)

Second:

This will be a little political but bear with me.  It (as most of
what I do and say) is based on data.  It’s drilled in me.  Data
shows what works and what doesn’t work.  It shows the bank
whether my offer is a good offer or not.

So here’s my scoop

You know/understand that

• Fannie
• Freddie
• HAFA
• HAMP
• FHA
• TARP

are all tied to the government, The Federal Government.  They took money from
the government and are now beholding to the government…even if they did
pay back all the money borrowed.  They are still getting benefits and probably
owe them things we don’t know about.  I know you do know that.
It’s just important that you remember that for my following reason.

Just recently, President Barack Obama appointed Dr. Don Berwick to the position of
Head of Medicare and Medicaid for the US Federal Government.  Obama
appointed him and skipped the Confirmation Process.  Dr. Berwick was just
appointed.  No opposition. No opportunity to discuss any opposition and for
those reading and feel I’m being biased, no opportunity for the positive side of
his life either and the good he has brought in the past and could bring to our
country in the future.

And now you are wondering “what does a new Medicare appointee, health
care division have to do with banks making stupid decisions and the real
estate business/market.”  Am I right?  Hang on and hold on.  I’m getting there.

In a speech Dr. Berwick made on July 1, 2008, at the NHS National Health Service
single payer health system in Great Britain, he said and I quote

“any health care funding plan that is just, equitable, civilized and humane must MUST
redistribute wealth from the richer among us to the poor and less fortunate.
Excellent health care is by definition redistributional”

He said this about Britain who has a 600% higher prostate cancer death
rate than the US.

He also talks about the current American Health Care system as “running
in the darkness of private enterprise.”  Is this how they might see the real
estate industry?  Redistribute the real estate to the poor and less fortunate
because they believe private enterprise can’t do it…without government
help?

Don’t take my word for it.  Here is the link  http://www.redstate.com/ben_domenech/2010/05/12/obama-nominee-donald-berwick%E2%80%99s-radical-agenda/

Last I remember to “redistribute wealth” was a communist belief.  And, yes,
he said this two years ago.  Yes, a leopard can change their spots.  Yes, yes, I
could be reading way too much into this, but what if I’m not?

What if this has been the plan all along

• to take over America s-l-o-w-l-y, one business at a time?
• And re-distribute wealth?

Small business are failing.  Ask a chiropractor, a doctor who
accepts Medicare patents, etc.  Look
at your local malls and count the empty stores.   Let’s see, they have

• General Motors, Chevrolet, Cadillac, Buick, GMC, etc.
• Chrysler, Jeep, Dodge, Ram, etc.
• The banks, Freddie, Fannie, FHA, all the defaulted notes are now owned
  by the government
• Land 20%+ of the US currently

The Government Wants To Own More Houses

Are they planning on “giving houses to government employees” or giving houses
to welfare?  They could do this…in exchange for their vote.

Did you know the government is “renting” houses to tenants when their
landlord’s rental property has been foreclosed?  The government is widening their
horizons.

Did you know the government owns 20-30% of the land of this country?

If we have to have the government approve everything,
we have lost our freedom.

If the government does own 1/2 of everything in the country, do we have the
ability to buy things?  Houses, businesses, land? or is our only choice
to work for the government and lose our freedom?

This would make more people go into foreclosure, less people to buy houses,
more houses in foreclosure to give to the poor and take from the rich.

If the banks have been instructed to take back as many houses that don’t met
the stringent criteria then the government will own even more houses.

Don’t get me wrong.  I pray I’m wrong.  I pray more and more people see what
is going on and their is still time to stop it.

I’d love to hear your comments.

We and my students are still closing short sales.  We are still doing
double closes.  We are still make $20,000 to $30,000+ on double
closes.  But not as often as we did because of some of the bank’s
restrictions and their silly decisions.

I will continue to do short sales.  We are helping homeowners.  We are
buying, selling, renting, houses and making money.  We are making profits!
We are just being more selective in the houses and banks we do work with.

I’ve got 3 scheduled to close in August that we will be making
$20,000 plus.  There are opportunities.  It is only over when we quit.

I’m not quitting and I won’t let you quit either.

Once you know the potholes, it is MUCH easier to go around
them.  This is exactly what we talk about and more on the
coaching calls.  Are you ready to sign up?

You don’t want to be working short sales without some insider
information.  Get it on my coaching calls.  Call NOW!
513-868-1275  ( I know it’s not an 800#.  Call it anyway!

Deb McMillan
The Short Sale Queen® and Coach
Get Started with Short Sales
Sign Up for Our Next Coaching Program Now
ShortSaleQueen

Here’s the (my) Answer to WHY
Banks Make Such Crazy/Illogical/
Sometimes Stupid Decisions! (Part II)

(Yes, that means there will be a Part 3!)

Why do banks make such illogical decisions?

• Like change the FHA ‘how long you have to be on the deed
  before you can resell it’ 90 day Seasoning rule.  They
  just changed it in February 2010 allowing you to resell the property
  after a 2nd appraisal.
• Like HAFA’s rules when you close a short sale insist you
  hold the property 90 days before you resell.
• Like banks taking their houses to foreclosure when the buyer is
  a Company.  (LLC, Corp, Etc.)
• Like banks not accepting offers from companies (LLC, Etc.)?
• Like take a house to foreclosure sale when there is a qualified
  offer on the table but it wasn’t submitted more than 21 days
  or 14 days before the sale date.  (Lazy?)
• Like Fannie wanting to start making homeowners who do
  a short sale responsible to pay the unpaid balance and
  not let those who walk away from their house when they really
  could afford the monthly payment to not get loans through Fannie
  for as long as 7 years.
• Like only give help to people who are way behind in payments
  and not to the struggling homeowner who is giving up lots to
  just keep making their mortgage payment and not have a life?

Ok, my answer probably won’t explain all of the above.  But it certainly
will explain the first 5.

First:

Their logic is not based on our logic.

Our logic believes they should do what they can to get rid of their inventory
not create more inventory.  Sell the house when there is a reasonable offer and
not devalue the neighborhood.  If there is an offer they should take it – within
reason, of course, so if there is data to say the offer is Fair Market Value,
they should take it.

Our logic believes this is a capitalist country/society and if we have
specialized knowledge to allow us to resell the house after repairs or
not and make a profit - we should.  If we find the somebody else who wants
to pay a little bit more and we can get it closed WHILE BREAKING NO LAWS,
we should get paid for that knowledge and skill.

It still is a capitalist society.  Not to defend the banks but…We/they are also run
by the Constitution where we still have the right to freedom of speech
so the banks do have the ability to make those decisions on

• who to sell it to and
• who not to sell it to

as long as they do not discriminate among the protected classes.

However, a good business decision (on a small business basis – not on a
large business because obviously they are too big to fail LOL) would seem
that they should take the offer and sell it to a buyer today to cut their losses.
Even if the buyer might make money when they resell it.  It’s not likely that the
bank will make that money later.

Here is the Likely Scenario

• The bank will take it back through foreclosure.
• It might not even be listed for sale for 1-2 years, and maybe 2 days
• It won’t sell for another 6-24 months and
• The possibility of the Fair Market Value continuing to drop

The house will bring even less money later than selling to
someone who will make a profit today.

The bank won’t make the profit we would because of time and
they don’t have our knowledge.

A logical decision would seem to be to cut their losses now, put somebody
in the house and the bank stop paying taxes, insurance, upkeep (cut grass,
winterize the pipes, worry about the pipes being stolen, etc.) and just making the value of the house less.

Or they will leave it in the defaulting homeowner’s name and make them
responsible for all of the above even it went to foreclosure.

Tomorrow I will answer WHY for a different reason than they are a capitalist
company and the right to make what appear to be stupid decisions and they
want the extra money but will never get it.

Sorry for the delay.  I had more to say that I thought I did.  However, this
scenario is a great one to run through the next time the bank gives you any
of these reasons why they can’t accept your short sale.  Ask them if theyrealize they will make less money if they don’t sell it today versus months in the
future.

Deb McMillan
The Short Sale Queen® and Coach
Get Started with Short Sales
Sign Up for Our Next Coaching Program Now
www.ShortSaleQueen.com

Why are the banks making such crazy decisions?

It depends on what side you are on as to whether they are bad or stupid.

But WHY:

• Did they change the FHA 90 Seasoning rule when they waived it just 150 days ago and allow you to resell after a 2nd appraisal?
• Does Fannie want to start going after the deficiency judgments and not let those who walk away and could really afford the monthly payment to not get loans for 7 years?
• Does HAFA’s new rules insist you hold the property 90 days before you resell?
• Only give help to people who are way behind in payments and not to the struggling homeowner who is giving up lots to just keep making their mortgage payment and not have a life?
• Do banks take their houses to foreclosure when the buyer is a Company?  (LLC, Corp, Etc.)
• Do banks not accept offers from companies (LLC, Etc.)?

I do have the answer.  I haven’t seen it anywhere else.  No other guru or short sale writer is talking about the answer.

I HAVE THE ANSWER!!!

And you don’t have to sign up for my coaching to get the answer…although….

You will have to log in tomorrow to this blog to find the answer!

Pass this on to your friends and enemies.  They will NOT LIKE the answer.

Deb McMillan
The Short Sale Queen® and Coach
Get Started with Short Sales
Sign Up for Our Next Coaching Program Now
www.ShortSaleQueen.com

www.theShortSaleTips.com www.BestShortSaleCourse.com

www.ShortSaleTerms.com www.MyShortSaleTraining.com

I have been reviewing the HAFA program since it’s becoming more apparent that the banks want to have the homeowners enrolled in the program.

Have you looked at it?  It doesn’t look like a good deal at all to me.  Yes, not a good deal for the homeowners is what I mean.

The property has to be their personal home.  That’s normal.  But they must also still be living in it.  It is also very possible they may have to be making payments to the bank during the 120 days they give the homeowner to find a buyer on a short sale for a set purchase price the bank has per-determined.

UGH!  That who paragraph sounds like a lot of  “ifs” and a bad deal to me.

Also, when the homeowner signs up for the HAFA program, yest there is an Opt In Form, they agree to do a Deed-In-Lieu in 4 months (120 days) if the house doesn’t receive the desired short sale offer.

Does that stink?  In today’s market I’m guessing that the bank will price the house higher than it will really sell for.  And with the First Time Home buyers Credit gone, buyers are looking for deals.  So if the bank is pricing the houses high – no buyers will appear and the homeowner will automatically get a DIL on their credit.

OUCH.  That doesn’t look or feel near as good as a short sale or as easy to recover from.  Good job HAFA.  Really helping the homeowner.

We talk about all this and more on my weekly coaching call with short sale students all across the country.  You should be on there too!

Log on and learn more at www.shortsalequeen.com

That’s all for now

Deb McMillan

The Short Sale Queen® and Coach

Freddie Mac and Short Payoff Fraud

Freddie is at it again and hopefully the other government agencies will NOT follow suit.

On Friday, April 16, 2010, in a Freddie Mac newsletter, a Freddie Mac investigator wrote an article accusing A-B B-C (double closes)  – the kind we’ve been doing and I’ve been teaching and am proud to teach because it is Disclosure, Disclosure, Disclosure – of being fraud.

They are stating that if they are not told there is another offer on the property at a higher price – that constitutes fraud.

They also state if the seller is walking away from the house and they really can afford to make the payments – that is fraud.

Realtors, of course, are believing that any same day double close is now fraudulent – because it gets the investors out of the way.

Current Business
In the Option Contracts we have been using for over 2 years, we have always used DISCLOSURE.  It has always been included.  That was their purpose.  That was the reason they were used in the first place was to tell all parties exactly what was taking place in the transaction.

The problem was the short sale lender had to read the contract.

The days of buying short sales through a Trust which didn’t have any language in it about ‘reselling the property for a profit” were changed for this exact reason.

Transactional lenders  (borrowing money for 1 day to fund separately the first transaction) so the C buyer’s cash paid NOTHING toward the first transaction – were created.

Many steps were taken to avoid the accusation of Fraud.

Even on February 1, 2010, FHA WAIVED the 90 day seasoning rule.  So they must have seen many buyers/investors were doing ligitmate transactions, helped the economy, and made it a little bit easier to close deals and keep houses from being empty and going through foreclosure.

Does this investigator really speak for all of Freddie Mac?

Ya – unfortunately he probably does.  I won’t be so naive as to think they don’t want more money for their agency and to remove the bad name on their head either.

Will they issue something else to counteract this newsletter?  I sure hope so.

Let’s look at Attachment A from Freddie – an official statement.  “Best Practices for Loans involving Possible property Flips”

Paragraph 2 “Property flips are not inherently illegal and not all transactions involving a rapid purchase and resale are improper.  Legitimate property flips are acceptable transactions that may be legitimate include:

Point #5  Sale of properties that the property seller acquired at or below market value after purchasing as a result of a distress sale (i.e. REO sale, short sale, tax lien sale, bankruptcy trustee’s sale, etc), where any increase in the sales price over the property seller’s acquisition cost can be clearly shown to be a result of the difference (if any) in the market’s reaction to distress sales and typical arms-length market sales”

That being said, when people/buyers hear that the house is in foreclosure, don’t they want to buy it at a DEEP discount?  Once it is out of foreclosure, bankruptcy, etc. it’s value increases because the “distressed” situation has been resolved.  That is the market reaction!  We can sell it for more.

The banks do see the contract – whether they read it or not.  However, they can see when the “B” buyer is a “LLC” it says an investor is buying the property and most likely reselling.  (not enough for Disclosure – but certainly a clue what will happen with the property after closing.  Banks have even told me this!

So what is the solution?

Stay tuned for the next Blog.  I don’t want to bore you now and you stop reading!  For more tips Click here!

Deb McMillan

The Short Sale Queen and Coach

www.shortsalequeen.com for more in coaching and the latest on the goofyness of the feds and the Solutions!