BrokerageIndustry News

Foreclosures and banks’ math: It doesn’t add up

Realtor Notebook

Learn the New Luxury Playbook at Luxury Connect | October 18-19 at the Beverly Hills Hotel

This is a true story, but I have changed some of the details to protect the people involved. This is an up close and personal look at foreclosure as it happens to real people. I will admit my own bias, which is that the banks are guilty of bad behavior and have poor business acumen. This is a true story about a couple who bought a little house in 2003 for $120,000 -- they qualified for a special homeownership assistance program and may not otherwise have been able to afford the home. Four years later, their lives had changed and their mortgage payments were almost impossible to afford. The home still needed a new roof and a furnace. They talked about selling and called their Realtor, only to discover that their home was now worth less than they owed on it. They did not have enough money to sell the home. She moved out, they split up, and he got a roommate when she stopped paying her share of the mortgage. He limped along for a few more years, trying to keep up with the repair...