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A number of short sale clients have shown me letters, mostly from Chase, offering them an almost incomprehensible amount of money if they’ll do a short sale. It would seem hard to believe, in a world where short sale sellers typically walk from closing with the clothes on their back and no proceeds, that lenders would suddenly offer them tens of thousands of dollars to sell for less than what they owed the bank. But there, in real living color, I have been shown these letters, right at the kitchen table, with numbers to call for verification and everything.
We’ve looked into it. The ones from JPMorgan Chase are legitimate. In some cases, Chase is giving a $30,000 incentive to underwater borrowers to complete a short sale. I have verified it through attorneys, Chase, and several Chase officials, and the explanation has been the same: Chase wants to close out these assets and they’d prefer not to foreclose. In the cases I have seen, the loans were originally Washington Mutual mortgages acquired by Chase when they absorbed WaMu in 2008. Chase paid $1.9 billion for Washington Mutual’s assets in 2008 after they were shut down by the FDIC. They did not pay face value for these mortgages. They can afford to sell them at a loss and even pay an incentive to the borrower and still remain in the black- and safely distant from the robo-signing scandal headaches.
According to a senior VP at Chase I have known for many years, other banks are doing similar incentives. Wells Fargo bought Wachovia. Bank of America bought Countrywide. And they can, in house, offer a far better cash incentive in many cases than what sellers could get under the HAFA incentive of $3,000, which many people often do not even qualify for. Not only that, under the TARP rules, the banks can claim a loss on the face value of the loan on their taxes. And that appears to be what they are doing.
Not every letter a delinquent homeowner gets in the mail promising them cash, incentives, and other goodies is legit. As a matter of fact, much of the mail I have been shown by delinquent homeowners struck me as a scam. But I have to say, in the case of banks like Chase, those large incentives to complete a short sale are a fact.
WHATEVER you do, however, never do it alone. If you are in New York or Connecticut where I work, contact a lawyer and check everything out before you ever deal with the bank directly alone and without help. We have a team including lawyers and a CPA who can make sure that our clients make all the right moves and have their backsides covered. Forewarned is fore armed.
Real Estate Jargon is Terrible Marketing
For the 100th time, I read a real estate write up that fell well short of the space limit, but was filled with acronyms and abbreviations that you’d need a Berlitz book to decode. I think it fair to say, after more than 4 months on market and no buyer, that this would be called a marketing fail. The amount of effort it takes to write out the entire phrase “Sliding Glass Doors” instead of the current “SGD” is negligible. Buyers don’t stick around to decode. There is too much inventory to move on to.
And of course, the sellers, who could easily see this marketing fail if they simply Googled their address once in 4+ months, are oblivious to it, because no seller would be OK with that.
We’ve all been in situations where industry jargon has confused or annoyed us. When a physician speaks to us like a colleague instead of a lay person needing explanation, it is disconcerting because confusion doesn’t mix well with health matters. It is the same when we speak with an electrician, a cop, and 100 other professions where the stakes are such that clarity goes hand in hand with peace of mind.
WBF or WB Fireplace instead of simply “Fireplace” or “Woodburning Fireplace” is another fail.
EIK instead of “Eat in Kitchen” occurs so often I no longer question it, but to a consumer out for the first time it can cause fits.
The same goes for MBR instead of “Master Bedroom.”
I could go on an on. Sometimes I’ll see abbreviations and acronyms in write ups where they simply don’t have the room-sometimes. But once in a write up where it doesn’t absolutely have to occur is too many. Moreover, I can tell you that there are other ways to get the same or better message with fewer words. But that is another blog.
Thou shalt not confuse thy prospective buyer.
Thou shalt always give thy client thy best.