Is a New Wave of Foreclosures About to Hit the Bay Area?

Here is the back and forth recent email between a mortgage broker and an REO Sales Rep at one of the big banks in the area:

Mortgage Broker: What’s the status of this property…

REO Sales Rep: …  Just wanted to give you a heads up…. It’s starting to get busy.

Mortgage Broker: Did you release some homes?

REO Sales Rep: I know we got more than usual back today. I spoke to another team and they got a bunch back yesterday too. So it looks like the ones that have been trying to get modified are finally going to sale.

Mortgage Broker: So you get them pre foreclosure and then have to do cash for keys?

REO Sales Rep:  No – We get them post foreclosure. There have been a lot of postponements because we are trying to modify. 80% of the modifications are going to come back. After the sale date (at courthouse steps), we hire Realtors to check the property for vacancy. 50/50 chance that the prop is vacant. If not vacant we try to negotiate cash for keys… If that doesn’t work – we evict. Which can take a whole year sometimes

The Banks Love You

Reading the media ads and coverage would have us believe that the banks love us and are bending over backwards to help homeowners. Does anyone seriously believe that the senior staff at any of the big banks are sitting around talking about how to help homeowners? A quick reality check will tell you what they are discussing – raising your credit card interest rates, adding more fees to their services and canceling or lowering credit.

Why are banks modifying loans that are going to come back to them in foreclosure? As the old adage says – follow the money. After all, that is what the execs are really discussing – how to have the general public bail them out and return them to profitability.

Too cynical? I think not.

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Email Craig if you would like to know more about buying or selling a home or condo (925) 984-4910.