So here we are: several million homeowners across the country are living with the distinct prospect of losing their homes through foreclosure, thousands of them right here in Nevada where nearly one out of two homes is under water that is, the amount of the mortgage balance exceeds the fair market value of the home.
I'm peculiarly aware of borrowers in extremis because a portion of my firm's practice is committed to assisting, or attempting to assist, them in avoiding foreclosure. Our experience is this: The hyped government sponsored homeowner assistance programs are impotent, and the taxpayer funded bank bailouts seem designed to ensure that the moribund real estate market collapses utterly. Of the billions of dollars spent in the effort to rescue the financial institutions responsible for digging the hole in the first place, none of it is trickling down to distressed homeowners.
Each bank has a loss mitigation department that's presumably supposed to benefit both lender and borrower. I've worked with many clients whose loans are owned by various banks, and the process typically goes like this: Getting through to speak to a live person is the first hurdle; prepare for quarters of an hour of recordings and waiting. If you are working on behalf of a borrower, you are directed to send an authorization letter to the bank by fax only no e-mails. After faxing one letter half a dozen times to three different numbers provided by several different live persons, it probably won't get into the banks "system" in due time, if at all.
Now mind you, the foreclosure sale may be impending because the homeowner has already wasted a lot of time and $1,500 to $3,000 she gave to an unregulated loan modification "expert" who did absolutely nothing that she couldn't have done herself. By the time she gets to us, she only has a week or 10 days before the sale and the employees of the bank or the loan servicer are so poorly trained and indifferent, a borrower can lose a home simply by virtue of the bank's own abject disorganization. I do not believe this is inadvertent; I believe a decision was made at the top to resurrect Rube Goldberg and implement methods designed to not only not help the homeowner but to humiliate her in the process. You'll speak with
Shawntee, who will transfer you to Nsgu, then on to Ny Lynn and, if you're indignant enough, to the supervisor, Denise. None of them respond substantively because the letter has been secreted in a hard drive in the bank's catacombs. Moreover, the phone answerers have virtually no authority to make any decision they are phone answerers and that's about it. They also suffer a lot of verbal abuse from near hysterical homeowners on the brink of losing their homes.
Make no mistake, contrary to logic and everything you've heard or read, the bank wants your home; after foreclosure, it will profit by way of originating a new loan regardless of the purchase price.
It boils down to this: taxpayers have contributed billions upon billions to the financial sector which has run the economy in general and particularly the housing market into the ground. As a result, trillions of dollars worth of homeowner equity has evaporated and foreclosed homes all over the country sit unoccupied, saturating the real estate market and driving down property values. Homeowners whose properties are under water and have little hope of building up equity in the foreseeable future are asking, Why not just walk away? And the banks are answering, Why don't you just walk away? And the same people who brought us the crisis and whom each and every one of us are giving hard-earned money to, are the same ones who are mercilessly giving homeowners the boot.
It looks a lot like a death spiral an iniquitous, sickening one.
Michael Radmilovich, an attorney with Sutton Law Center in Reno, has more than 15 years experience in real estate law. Contact him at 824-0300.
