[quote=jpinpb]Ok. I am pretty sick about reading about the poor homeowners. We heard about their great success during the bubble and now we have to pity them. I am so bothered by it all, that I wrote Turko myself and gave him the link to this thread. He actually emailed me back. This is what he said:
Thanks for watching and for forwarding the link. Can you post this on Piggington for me?
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Yeah, yeah, I hear you all. I see both sides. I’ve avoided most stories like this for some of the reasons expressed on Piggington. In this case the woman says she would have done a short sale, except Wells Fargo kept telling her they would stop foreclosure while they tried to modify the mortgage. This went on for a year. Then they foreclosed during the process making a short sale impossible. And lets not forget that many banks make short sales difficult or impossible. IMHO this is because they are transferring “distressed properties” to their cronies or affiliated companies at very low prices, so they can profit when the recovery materializes and values rise. Why should they let the little guys in on this bonanza?
Yes, the woman quit paying her mortgage. Most lenders won’t talk seriously about a modification unless or until you have defaulted on payments. Why would they? If you can pay the mortgage you don’t need a modificiation. They claim they have to concentrate on the most serious cases first– i.e., the ones where the borrower is in such a mess they’ll almost certianly default again anyway.
Finally let’s not forget that the government gave billions to these banks, Wells Fargo being a big recipient, with the proviso that they would help small borrowers with loan modifications. I think my story shows a snapshot of a disorganized, disfunctional and uncaring effort to address and resolve the situation in this individual case. Give her a yes or a no and let her get on with her life. How can it take a big bank a solid year to determine if any of us are a candidate for a modificiation and “entitled” to keep our homes? It certainly didn’t take them a year to decide if we were qualified to buy the homes in the first place!
Michael Turko
KUSI-TV News
858 571-3453[/quote]
jpinpb,
Thank you, thank you, thank you for sending this e-mail. 🙂
While I understand his points, I’m not sure why it should matter if she was permitted to do a short sale or be foreclosed on. There are some arguments to be made that foreclosures are better for the borrower because the lenders will not have any recourse after the foreclosure. Since she was willing to destroy her credit with a BK, why not take the free rent (which she did) and go along with the foreclosure?
Personally, I think short sales invite more fraud than the foreclosures do, but that’s just me.
