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Tilting at windmills

Posted by Rona Fischman  October 27, 2009 01:59 PM
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When I published comments from readers who thought their Offers were not being presented to lenders in short sales and foreclosure situations. I suggest that agents and consumers could do something about it. James wrote:

Where's the incentive for an honest agent in all of this? It seems like it's a lot of work for the agent, and he still won't get a commission. If the lender thinks the borrower is crooked, there will be a Fraud Alert flag on that file forever, making reasonable Offers nearly impossible to approve. Sure, it's the right thing to do, but it takes a lot of time, effort, and money (lawyers ain't cheap), and it doesn't get your client any closer to buying the house. Good community service (if you can get the bank to listen to you), but it won't pay the bills.

First a disclosure: on the bottom of the email address that I use with my clients is this statement:
Always do right. This will gratify some people and astonish the rest. --Mark Twain
So, I am someone who tilts at windmills; that’s who I aspire to be. Marcus thinks doing right to do right is a sign of hopeless naivety. But so be it. Attorney Michailidis thinks I owe someone an apology for saying there is something wrong with hand-picking low Offers to send to a lender in a short sale.

Back to James’ comment: why blow the whistle on sellers and their agents? James is right that the self-interest angle is weak, in the short run. The long-run upside is that action to stop those messing with the process will clear the path for buyers to buy properties; if the lenders are waiting forever to see market-rate Offers, would-be buyers are waiting along with them.

Throughout 2008 and 2009, buying foreclosure or short sale property has been an exercise in practicing patience. Buyers who put in Offers frequently wait weeks for verbal-approval. Months go by before seeing an actual sales contract. Frequently would-be buyers end up with nothing except inspector and lawyer bills. Are you one of the frustrated many?

There is a compelling counter-argument. Isn’t it perfectly legitimate for an owner who feels mistreated by the lender to do everything in his/her power to thwart the lender’s ability to get top dollar for the mortgage debt? Haven’t the lenders been behaving badly, too? Is this a case where the little guy fighting back? Is it wrong to call them crooked?

What do you think? Am I backing the wrong party? Should I be siding with the defaulting property owners? Did I get “what’s right” wrong?

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About boston real estate now
Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.
Rona Fischman is a buyer's agent who provides a look at the local housing scene, from basements to attics.
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