Unbelievable or Today's Reality?
With prices moving up it would seem as if real estate woes would lessen. Unfortunately, that isn't always the case. There are still many stressful situations and it is astounding how people and companies continue to act as if it we were in the middle of the "Horse Latitudes of Real Estate", the year 2009.
Just had a bank try a good one. We've been working with a great Agent on a short sale with minimal progress through no fault of the Agent. The bank finally sent a notice that they are conducting an auction on the "personal property" sometime after April 4th. The personal property referenced was the mobile home that was the subject of our offer.
This was most interesting as the mobile home was converted to real property in 1999. Certificates confirming the conversion are recorded at the County Recorder's Office and held by the State of Nevada Manufactured Housing Division. The Lender talking auction acquired the note in 2005, six years after the conversion to real property. One would think that before they acquired the note, or sometime in the intervening nine years, they would have realized that the character of the asset securing their note has changed. It is no longer personal property, rather the land is now included.
The change actually enhanced their security position. Instead of the loan being secured by just the mobile home structure, the entire property is involved, land, well, septic, etc. That is good news for the Lender from a security standpoint, but it does change their action options in the event of nonpayment. No longer can they auction the asset, rather they must comply with the Nevada laws pertaining to foreclosing on real property. That process is much more involved than simply scheduling an auction. It will take them many months, cost them significant sums, and may or may not yield a better result than the short sale offer on the table.
Reason would dictate that they come to the table and negotiate a settlement satisfactory to all parties, the Lender, Seller, and Buyer. Unfortunately, not all Lenders are reasonable. Some have policies that are ultimately detrimental to both them and their borrower, but they stay the course of self-destruction as they stand firm on payment or foreclosure. It seems illogical from our perspective, but occurs on a regular basis.
Lenders have many files. While most seem to be the same, they aren't always. This is especially true of an Investor that buys loans from different originators. A subtle change can make a big difference to their approach to a nonpayment situation. A few years back one major Lender had difficulties with their documents resulting in them paying borrowers large sums to short sell their home. Shocked everybody, but it really happened.
Our Advice: Are Lenders just too big these days to pay attention to details? One has to wonder how many other mistakes similar to the attempt to auction real property without a Notice of Default occur. Sellers are worn out by the time such severe action comes down, and most don't have experience or knowledge about the security liquidation process that they are being exposed to. Their mindset is often one of getting on with their life, simply looking to shake the remnants of this painful reminder of the recent difficult financial times. Rather than simply walk away, call a Realtor that has expertise and experience in foreclosures and short sales to make sure that what is happening is legal and correct, and that what you are doing is in your best interest. You might just be surprised at what you find out and how you can improve your position and, as a result, your mindset.
The details of things seem to be often overlooked these days. We know who lurks in the details so be sure to make sure that your circumstances are micro-inspected for detail.
When it comes to choosing professionals to assist you with your real estate needs... Experience is Priceless!