This confirms it. Servicers can do whatever the &*&% they want!!!
BOA is looking at a new program to rent a home back to the borrower after foreclosure.
http://www.housingwire.com/2011/12/09/bofa-developing-foreclosure-r...
"We are talking with investors that would come in and buy these houses and would lease them back to who would now be the now tenant."
"We are looking at programs where you can capture somebody before the REO process and offer a deed-for-lease. We would go to the customer and say, 'We'll do a short sale. Will you be interested in leasing your property back? We're still going to sell the property. You will no longer be the owner. But you can be a tenant now in that same property and save you from moving on,'" he said."
This is wrong on so many levels. Right now, we are signing ALT's, addendums, approvals all stating we won't lease back to a previous owner, and you know we'd get sued for FRAUD if we did, but hey, now let's roll out a program that encourages it...and yet on SOOO many levels, I don't think it's a good idea at ALL to rent back to a previous owner, but I'd LOVE to hear what everyone else thinks of this.
Replies to This Discussion
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Permalink Reply by Richard on
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Smitty,
It sounds like a double standard to me. I wonder what the feds and local attorney generals think about this. This seems to be an area where national and local real estate associations should be voicing their concern. Somebody needs to get tough on the lenders and reign them in.
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Permalink Reply by Jeff Payne on
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Richard, instead of reigning them in, perhaps we need to let the market speak and let them fail when they make dumb decisions. Too big to fail should never happen again!
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Jeff,
I like it, in fact that is bound to happen. I would love to see them fail and be taught a lesson, problem is, when they fail, they hurt a lot of innocent people. Those innocent can't rebound as easy as the big guys who have stashed away somewhere where it can't be touched. So, it ends up bring the system down. And, there seems to be no accountability, which is wrong. They ended up just walking away, change their name, merge and just do it all over again. The hard working people as a whole, are keeping this thing intact.
There needs to be some governance of these plans. And there should be a level playing field for the real estate professionals and lenders alike. What is good for the goose should be good for the gander. It wouldn't hurt to establish pilot programs to guage the likelyhood of this being successful and the affects on the market before it is implemented on a large scale.
You're correct, "Too big to fail should never happen again! I believe in being proactive and, "making sure they don't fail?" Especially when others are impacted.
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Actually I believe that the government needs to stay out of it. If the lender makes stupid decisions and continues to lose money, let them fail. Someone will come along and purchase what is left and hopefully run it like a profitable business and not ask for government handouts.
Still not sure what you mean by a level playing field? Let the market dictate which lenders, agents, business etc, succeed. No need to level the playing field, need to weed the playing field instead and let the strong survive. Real Estate or any business for that matter is an equal opportunity, unequal reward system, that is how caplitalism should work anyway. The only people that should be making sure "they don't fail" should be the people running the business, not the public. The public decides if they want to purchase the product or service and if they don't want to, the business then fails.
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Hi Jeff,
By leveling the playing field, I'm talking about all investors being able to take advantage of this. Just as Harry is mentions below. It's no doubt that big goverment has made some big mistakes. What I mean by governance is, industry regulation, not necessarily the bigs.
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Again, I do not understand what you are saying. Investors being able to take advantage of what? Buying and renting properties? There is already enough regulation, let the market and the consumer regulate it and stop giving money to the banks for their mistakes.
Leveling the playing field to me sounds like a bit like coroporate welfare, of which we already have enough of that. If a lender chooses to burn down their house (deny short sale and foreclose instead) just to prove they are homeless, then they should be able to do so WITHOUT getting a handout from the government. They made the loan, they should be able to do whatever they want with it but should not get bailed out from their stupid decisions by Uncle Sam.
The banks should be no different than the restaurant down the street or the local realtor, if consumers do not like or want their services or prefer to patronize the competition, it is very simple, they go out of business. Let the free market "level the playing field" and not the government. That will regulate every industry
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Permalink Reply by Smitty on
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I've never found a situation where renting back to a homeowner worked. I'm sure there are those situations that work fine, but I would say the majority of those go VERY badly. I can think of a hundred things right now that could easily go wrong with that.
I agree, let's throw out the ALTS as at this point, if you're going to have a program like this, why bother right? It'll open the floodgates for sure and YEAH...we MAY finally clear the glut of homes on the market.
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Fannie Mae is also discussing this and I believe they may have some pilot programs in place in some areas. I can not understand why they want to stick their heads in the sand when it comes to short sales and the benefit for ALL parties involved. Maybe their crystal ball says that the market is coming back and in a few years the values of the homes will come back and they will recoup the 180 BILLION dollars they have lost :)
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Permalink Reply by Kevin - Greenville, SC on
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Fannie Mae has had their Deed for Lease program in effect for quite awhile. https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2009/0933.pdf
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Permalink Reply by Kathleen Couch on
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I had a lot of the same feelings, Smitty. It's fraud, unless we (BOA) think of it. I wrote an article once, before all of this started, from an investor's view point, that later, the homeowner will forget about how good the investor was to them, and claim that they were deceived, when their property was sold, and they didn't even know it. And, if they signed something, it was under duress. Soo... who takes the liability? I am sure it is not BOA. And, I am sure the sales to investors will be rigged to be their "handpicked" investors.
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BINGO! I am sure that their handpicked investors are already lining up to take advantage. They are probably already establishing their businesses in order to take advantage. I can see it now, Landsafe will be the company that collects the rents and their attorneys are already forming new corporations in order to process everything and purchase the properties from the bank. The same attorneys that advised them of all of the fraud occurring and that they should not allow rentbacks on a short sale and the same attorneys that screwed up their foreclosure process in the first place. David J Stern is probably already working on his company that he will run when he is behind bars :)
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Permalink Reply by Jeffrey Burnham on
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There is a company in California promoting this idea. You can Google them. They're called "Short Sale Buyback." They SAY they're legal...but I haven't seen them close any yet myself.
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