Mortgage Co’s Try to Squeeze Blood from a Turnip
There are days (today!) that I would like to jump in my imaginary corporate jet and zoom up to the locations of bank and mortgage company corporate offices… anyone who is trying to sell the properties they have foreclosed on. Why? I want to bring with me a long switch and give them each a strong thrashing, whupping, or spanking.
Why again? With HUNDREDS of THOUSANDS of foreclosures on the market right now, with the lack of a liquid credit line making new home loans more difficult to obtain, with massive carrying costs … these companies continue to try to squeeze blood from a turnip.
Right now cash buyers are highly desirable in my local real estate market. I have a buyer who has written a cash offer on a home with NO contingencies: no appraisal contingency, no inspection contingency, no financial contingency. He will close in two weeks. The offer is very very reasonable, especially since the home has been listed for almost four months. But the seller is trying to get more more more money out of a home that’s just sitting in an almost crippled market for homes in that price range.
Here are the numbers:
$165,000 Loan default amount
$ 10,000 Estimate of commission to be paid
$ 800 Title Search
$175,800 Total break even amount if sold today
$191,900 Amount mortgage company demands to sell home
$ 16,100 Potential Profit
My buyer’s offer is within 5 percent of their list price, but this isn’t enough. I am feeling a bit of righteous rage that MY money - my taxpayer moolah - is bailing out mortgage companies like this who have buyers but still refuse to sell because they aren’t making enough profit.
I hate to say it, but there’s something grossly wrong with this picture. /rant.
November 19th, 2008 at 1:22 pm
[…] is Cornerstone of Foreclosure Market I wrote on Banks.com about an experience I’m having with buying a foreclosed home. I am not a happy camper over the behavior of this lender. I have a buyer who has written a cash […]