Poor Decision Costs Regions Bank $55,000
Posted Jun 25, 2009 @ 9:42 pm, Viewed by 537 Visitors, Read 564 Times.In my area, only about 1 out of 7 short sales are being approved by the banks. Not only does this frustrate me and my clients, it just doesn't make sense.
Often times I wander what the heck banks are thinking. Today is one of those days.
Below, I will out line how Regions Bank pissed away at least $55,000 during the past 1 1/2 years on one Panama City Beach condo.
Back in the spring of 2007, I had a couple call me for advice. A mutual friend had told them that I might be able to help them. They had bought several condos from 2003 to 2006 and were under serious financial stress.
After completing a market analysis for each of their properties, I determined that they were "upside down" on each condo that they owned. In other words, if we sold their units at market value, the proceeds from the transaction would be insufficient to pay off their mortgages.
After considering all their options, they decided that a short sale was the best route. The first condo that I listed for them was unit 1506 at Celadon Beach at a price of $275,000. Keep in mind that the Panama City Beach condo market was an absolute disaster at the time and there were very few buyers making offers on anything.
After a few price changes, I was excited to get a cash offer at $210,000 in February of 2008. The sellers quickly accepted the offer and forwarded it on to Regions Bank for Approval.
Guess what, Regions would only accept the offer if the sellers made up the difference. Now, if the sellers had that kind of cash, they wouldn't have needed to do a short sale. Call it what you want to, but that was a rejection by Regions Bank.
At this point, the sellers had no options. They had to let the property go into foreclosure. We took the condo off the market and left it to Regions to deal with.
Fast forward to June 11, 2009, almost 1 1/2 years later. The foreclosure process is complete and the bank has accrued additional losses of:
Property Taxes - $5,000
Association Fees - $4,800
Lost Interest - $10,000 +
Administrative Fees - ?
Attorneys Fees - ??
On June 11, 2009, while I was reviewing the Panama City Condo hot sheets, I notice that unit 1506 at Celadon was listed as REO at a price of $174,900.
That's right, $35,000 less than the offer they had a year and a half ago. Add in the $20,000 + in additional losses, and Regions Bank pissed away $55,000 in less than 1 1/2 years.
Why? I'd like to know because all banks are doing the same thing.
Who is the beneficiary of these poor decisions?
Do the stockholders at Regions know what is going on?
Tim Shepard
Shepard Real Estate Group, LLC
Cell: (850) 259-4133
Toll Free: (866) 678-SOLD
Rate this Post!
Share this Post
Print
Social Bookmarking3 Responses to “Poor Decision Costs Regions Bank $55,000”
I don't think there is anything you can do to change Region's position. Like always, I'd recommend your client talk to his attorney and accountant and come up with the best strategy.
That's crazy!
Why? I'd like to know because all banks are doing the same thing.
Who is the beneficiary of these poor decisions?
Do the stockholders at Regions know what is going on?
Good questions.
REW Blogs User Stats
Currently Online Users:
0
Total Users:
2,373
Entries:
7,486
Unique Views:
6,280,879
Total Views:
6,609,828
Total Comments:
9,224
Total REW Points:
510
I am the broker/owner of the Shepard Real Estate Group located in Destin, FL. Read More
Contact Me
RSS Feed- This User's Stats
-
Blog Entries: 8Average Blog Rating: 0Unique Views: 2,327Total Views: 2,465Comments Posted: 10Comments Received: 7REW Points: 0
Top Rated
REW Blogs RSS Feed
Tim - OUCH! I am a Realtor(R) representing a client who has a second mortgage with Regions Bank. When I listed his home for sale, I contacted Regions, and they told me they would work with us, and would be able to get us a response on a short sale within 15 days. We submitted a market-value offer (based upon 2 recent BPO's), and now, TWO MONTHS later, we received the APPROVAL letter from Regions. You hit the nail on the head - they want my client to sign a note for 100% of the deficiency - essentially a 26 year note on a home he would no longer own. And it took them TWO MONTHS to reach this profound decision. And yes, that is effectively a rejection.
But wait. This gets better. My client is a career Marine, getting ready for his third overseas deployment, this time to Afghanistan. Career USMC. A foreclosure or deficiency judgment will halt his career advancement.
I say put my client in charge of the loss mitigation department, and send the Regions Bank CEO's to Afghanistan!
Would appreciate ANY INPUT or suggestions on how to assist my client on this one. Also, anyone aware of a website / clearinghouse for info related to how different lenders are addressing short sales? It might be good information to share with current clients who are seeking a lender, to know that their friendly banker will NOT be there to support them when times get tough!