In what is being applauded as the most decisive response yet by federal officials to end the housing crisis, President Bush signed yet another mortgage relief measure today to help homeowners avoid foreclosure. This one, which according to an undisclosed source "should pretty much nail it," authorizes a few more billion dollars in government-backed relief.
Specifically, it reads: "Make check payable to Merry Maids."
OK, I made that up, but my fantasy relief act is brilliant in its simplicity and cuts directly to the heart of the problem. According to my informal survey (margin of error equals 100 percent), the biggest single cause of people losing their homes to foreclosure today is lost paperwork.
In my latest personal installment of "Lenders Gone Wild," we have been trying to get bank approval of a short sale for a selling client. We have been doing this for two months now. This is reality television at its worst, and it is so incredible it simply couldn’t have been scripted. First, allow me to set the scene. The seller has a first and a second loan, both with the same lender. The first is good, only the second is short. As any diligent agents would have done, we called the lender before the ink had dried on the listing agreement to get the lender’s particular playbook for short-sale submittal and approval. We did this because we have learned that each lender has different procedures. The really fun part is that the same lender often has different procedures — different depending on the person you talk to, the time of day you happen to reach them, and the relative position of Venus to the sun on the date of the last mortgage relief measure’s signing.
So when we received the buyer’s offer — a very solid offer, one close to list price, one any sane traditional seller would have been bronzing for his trophy room — we packaged it. I don’t want to lose you here, so know that "packaging" is a technical term in short-sale land. It means to complete and submit approximately 50-to-the-eighth-power pages of forms, written in Sanskrit, and to include a "hardship" letter along the lines of "I can no longer afford my loan since the interest rate reset to 28 (or, as you like to say in Sanskrit, navavi.nshati) percent." The latter is just an example, of course. We all know this hardship letter would be rejected because the writer failed to provide certified copies of immunization records and a short essay comparing and contrasting the U.S. space program to Ethel Merman.
More on point, we were so very proud of our "package." It was beautifully prepared. It had a happy cover letter. It had a table of contents. It included playful graphics. It got lost — four times. Each time we learned this only through our daily phone calls — phone calls in which we were transferred and rerouted through an infinite loop of chipper "your call is important to us" messages. And, once, we even learned our package had been destroyed entirely. They needed an estimate of proceeds; then they needed a HUD-1 form; and then they didn’t need a HUD-1 but just an estimate of proceeds (the one that had been sent to the shredder the previous day). Then, they needed the approval of the first trust deed holder, even though the first was not short. "But, you are the first trust deed holder!" we screamed. "Please hold. Your call is very important to us." Over the past week alone, we couldn’t have been transferred more if we had chosen careers in the military, and the most recent transfer resulted in a mailbox that was full and could not accept our message. Then, they lost the package — again. We are currently one lost package away from a lost buyer.
Oh, I know the lenders are very busy right now. I know this because every time we hit pay dirt and get a pulse at the other end of the line, they tell us they are very busy. One day they have 400 files, the next 1,000, and the following day files totaling another randomly generated number intended to impress me. I’m busy, too. In fact, I am so busy, I work (brace yourself) weekends! Despite this, I don’t lose my clients’ files.
I don’t know about lenders, but in my house there are two reasons you can’t find something. Husband Steve can’t find things because he doesn’t want to look for them. "I’ve got a buck for anyone who can find my sunglasses!" My children never needed an allowance. They financed their formative years mostly through their finder’s fees. These same children, on the other hand, can’t find things because they never clean their rooms. While I think I have only two daughters, I might have several others I have forgotten about who simply got buried in the teenage landfills where my two known holdover tenants currently reside. I need a stepladder to cross the thresholds of their respective shipwrecks, and yet they wonder why they can’t find a missing earring — or each other.
I can’t believe that lenders don’t want to find their stuff. I can’t fathom how they would want to delay the process or even foreclose on my client, as this would make no sense. It would be both fiscally and socially irresponsible. So, I have to believe that their rooms are a mess. It’s time to clean house, and if the president can help them do that, then we may finally start seeing some real mortgage relief.
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