SOLUTION TO THE HOUSING CRISIS

Rose Spoltore  %u201CThe wealth of this country lies in the homes of its people%u201D     Abraham Lincoln

OUR NATION IS CRISIS%u20147 point solution!

The Middle Class is Quickly Being Pulled into Poverty Level

The Dollar is devalued and worth 60 cents.  Increased unemployment%u2014reported statistics are wrong%u2014when someone stops collecting unemployment, the government considers them employed even if they do not have a job and what about employee buy-outs or people receiving entitlements, or welfare, etc.  Distorted Information then becomes Public Perception then becomes reality!! Gasoline has gone up to $3.07 per gallon and fuel oil is at $3.56 per gallon.  If nothing is done%u2014it will take another 5-7 years for the Real Estate market to begin to stabilize%u2014it always does!!   THE SOLUTION IS SIMPLE AND WILL COST LITTLE OR NO MONEY!!

Good morning%u2026My name is Rose Spoltore.  I live in North Attleboro, MA.  I have been a Realtor for more than 33 years.  I have seen several recessions%u2026.this is by far the worst%u2026.than 1989 and even 1981 when the interest rates were 19% fixed.

We are 1.3 million Realtors across the Country who is facing declining property values %u2013 AND WE ARE IN A STRONG POSITION TO HELP. We have begun a %u201Cgrass roots%u2019 movement from the local levels to The National Association of Realtors and Washington to make these necessary changes.

The Government creates the Boom and the Government creates the Bust.  1981-1984%u2014recession%u2014some people may debate the dates, the interest rates in 4/1984 was 12 ¼%/30 yr fixed.   1985-1989 recovery  and peak.  1989-1996%u2014recession and recovery.  Boom and peak 1997-2004.  2005-2008 recession and  tough times are getting tougher.

The year, 2008%u2026..Today%u2019s Crisis%u2014I won%u2019t get into the story of how we got here this time%u2026.or the sub-prime lenders and What Government Agency AND LEGISLATORS Developed and Approved These Irresponsible Programs.

Property values continue to decline due mostly to foreclosures and short sales.  I feel that getting the property listed and sold as quickly as possible at current market value, while the property is still occupied%u2026.Market value is changing day by day%u2026%u201Dthe reason%u201D%u2026.THE INCOMPETENT MANNER AND POLICIES THAT LENDERS HAVE IN PLACE TO ATTEMPT TO DISPOSE OF THESE PROPERTIES.  What is happening on Main Street across this Country is %u201Ca crying shame%u201D%u2014 We Have a  Nationwide Serious Problem Here.  All the economists that I%u2019ve listened to, I%u2019m sure are highly intelligent people, but they are driven by statistics, and when statistics  are skewed%u2026 then the policies have no substance..

This is My story%u2014every Realtor has one%u2026

I have been attempting to do a short sale locally with Countrywide Mortgage from Simi Valley, California.  The people owe $306,000.  On August 26, 2007, I listed the property for $248,900. After doing a Market Analysis, and looking at all the options, we decided to do a short sale%u2026%u201Csubject to the sellers%u2019 lender approving the short sale and forgiveness of debt%u201D.   I immediately contacted Countrywide Mortgage.  The automated phone system keeps you in a web of circles for hours, %u201Cwe are attempting to collect a debt%u201D and after many calls, I am directed to the %u201Chome retention department%u201D.  Why is it called a %u201Chome retention department when it is %u201Canything but%u201D.  Anyway, I gathered all the sellers%u2019 monthly income and expenses, hardship letter, and copy of the listing, bank statements, and an Authorization Letter for the lender to release information to me. 

And on September 4, 2007, I faxed them everything I had.  THEY SAID THAT THEY COULD NOT DO ANYTHING UNTIL WE HAD AN OFFER.  After two months of various methods of weekly advertising and many showings, I had no offers.  We then decided to reduce it to $227,900.  Again, many, many appointments%u2026.I received three written offers within a month%u2026..the first one%u2026.no money down%u2014this property is a two family%u2014the buyer would qualify if it was a single family%u2014but not a two family%u2014%u201Cgee%u201D, I said to myself%u2026.three years ago I had a buyer who closed on two properties; a three family and a four family with no money down%u2026. the same week, and he had bought another, six months earlier with no money down!

The second offer%u2026.the people got tired of waiting for Countrywide to make their decision after about three weeks%u2026and the third offer was a cash sale%u2026. the buyers waited and waited.  Countrywide told me that they ordered the appraisal%u2026Ok, we should know in a few days%u2026I received a call from two separate Realtors%u2026to look at the property%u2026.I thought they were going to do the BPO, Broker Price Opinion%u2026..oh%u2026no%u2026their job was simply to take interior and exterior photos and then they would e-mail them to McCaffrey Properties, LLC from Cicero, New York.  All this for $20.00 TWENTY DOLLARS.  They then would do an %u201CInternal BPO%u201D%u2026OK, how can they do an %u201Cinternal BPO%u201D%u2026.that%u2019s like a Doctor doing %u201Can internal%u201D on one patient and diagnosing another patient with that information.  What do they know about Attleboro?  In fact, they do not have a telephone number or an address on their web-site.  The only way I was able to reach them is by fax, saying that I am interested in doing work for them.  They e-mailed me back with their phone number.  Are these people real estate appraisers%u2026.lawyers, investors, organized crime or what?%u2026.and even a Real Estate appraiser cannot do a proper job without being familiar with the neighborhood%u2026and %u201Cthe local market place%u201D. 

After 5 months, the %u201Cnegotiator%u201D, came back with a counter offer of $307,500.00.  %u201CThese people must be on something very strong and illegal%u201D!  %u201CThis property will end up in foreclosure, abandoned and in eight months, it will be worth $100,000. or even less%u2026.in the early %u201890%u2019s, bank owned properties similar to this were selling for $25,000.-$40,000.%u201D  I heard that it generally costs the lender $65,000. to go through a foreclosure auction.

 The people who were in charge in the late 80%u2019s and early 90%u2019s%u2014 did a great job%u2014at least you could talk to the people who could make the decisions%u2014now %u201Cthey keep spinning you around%u201D!  There is no direct line, no direct fax, and no direct e-mail with the negotiator.  The person that finally answers the phone%u2014I%u2019ve spoken to at least 12 of them%u2026will then e-mail the negotiator and then you have to wait for him/her to call you back.  WHY ALL THIS SHIELD OF PROTECTION and alienation%u2026.and %u201Cthe beat goes on%u201D.

After heavy discussions with Countrywide, they agreed to send a third person to the property.  This time they sent a local Realtor to do a BPO.   Another two weeks went by%u2026..I get a second counter offer of $268,500 and they gave me a list of documents that they still wanted%u2026 90% of them, I had already given them on September 4th, such as the hardship letter and Authorization letter, but they could not find it%u2026.

A little angry with Countrywide, I called the seller%u2026she came in the following morning at 10:00AM. to help put together the rest of the documents that was required, 32 documents (numbered 1-32kl)  with a cover sheet indexing and explaining each page.  I began to fax to Countrywide from 12:30PM-2:30PM %u2013 could not get through.  I then called Countrywide and was told that they had one fax line%u2026..I said, %u201Cwhat!... you%u2019ve got one fax machine when you are servicing thousands of properties each day.%u201D Oh, we have lots of fax machines, but only one dedicated line!%u201D %u201CIt%u2019s the same thing,%u201D I said%u2026..I%u2019m reminded of the Comcast digital phone commercial%u2026..%u201DSir, your leg is going to fall off unless you change the dressing.%u201D

I decided to go to the Post Office and Overnight the package, $16.25, with all the documents on 1/10/08.  A few days later, I went on-line to tract it.  They received it the next day at 1:28PM and signed by S. Edwards.  About a week later, I called them:   They didn%u2019t know where the package was%u2026I told them that S. Edwards signed for it%u2026they did not know who S. Edwards was.  %u201CThere are a lot of people who work here!%u201D, I was told %u201CYeah, but do they do anything?%u201D, I said.

On 1/28/08, they still did not have the documents.  I called the Realtor who did the BPO, %u201Cby the way%u2026what value did you come up with that property that you did the BPO on%u201D?  %u201CI don%u2019t have the file in front of me%u2026.but I believe it was around $225,000%u201D, was the response.   Mind you, at this time, I DID NOT TELL THEM THAT THE FIRST TWO OFFERS WERE DEAD, otherwise the process would have stopped right then and there%u2026.and as of now%u2026the cash buyer can no longer wait%u2026.

In all seriousness%u2026..IT IS VERY SAD WHAT IS HAPPENING IN THIS COUNTRY%u2026.If these properties are not disposed of in a timely manner%u2026inventories continue to build%u2026and regular sellers cannot sell-%u2013property values continue to decline, and decline. 

 Short Sale

When people are upside down on their mortgage, they cannot refinance or sell it.  It is interesting that in the last few years, with such a boom, people refinanced, pulled money out%u2026.and now with no more money to pull out, people aren%u2019t spending as much%u2026.as is now being reported. But more important%u2014many of these sellers have borrowed from family members to try to keep up the payments%u2026high cost of goods and services and less monthly income%u2026it then spirals out of control%u2026.there is no way out.

Foreclosure

When the lenders have taken possession of the property, the property is now abandoned and in disrepair.  This requires either a CASH BUYER.   A three family that originally sold for $289,000., now vacant and condemned by the City, is listed at $135,000.  My buyer offers $50,000.  The bank refused the offer.  The buyer in checking with his lender was told that if the property was condemned, they could not do the loan.  When I told the buyer that it had to be a CASH sale, he said, %u201COffer them $10,000.00%u201D!!!!!! On a Bank Owned property, we have one buyer who is ready to close and has been waiting 3 months for a Purchase and Sales Agreement to be signed by the bank!  He has credit scores above 800%u2026Why is this happening? 

A fellow Realtor I am working  with%u2026she has four transactions that she has been working on for months and ready to close since November%u2026has now been told by Wells Fargo that they will not close until February because they do not enough help to close these sales.  We have lots of buyers and we can%u2019t close because the banks are holding everything up.  Multiply this issue with the 1.3 million Realtors across this country%u2014YOU DO THE MATH%u2026

Another property that is listed for short sale%u2014needs a new septic system%u2014the bank won%u2019t do it%u2026.eventually a builder/buyer will pay $80,000. at auction.  When it was originally appraised and sold for $360,000., most likely, the bank will buy it back; keep on the market for two years and when it doesn%u2019t sell because now there are frozen pipes, water damage and MOLD IN THE PROPERTY. Mold is %u201Cthat green stuff that%u2019s a big issue now- a-days%u201D Was it safe 10-15-30 years ago?

I believe%u2026above all else, jobs and then the Real Estate Industry drives the economy.  You can%u2019t  inject consumer confidence with false information.

Forgive my simplistic view of the issues.  I am a very simple person.  I am not the Harvard Graduate, who came up with %u201Cdifferent computer models%u201D called sub-prime..and this created huge wealth for certain greedy investors on Wall Street, and from China to Norway.   With the infusion of sub-prime lending%u2014%u201Cthese mortgage backed securities on Wall Street were selling like %u201Chotcakes%u201D%u2026Many countries (185 countries, members of the World Bank) invest and buy this bundled securities and hedge funds for huge profits.  The incentive is lend as much money as possible on the street.  People were making more and spending more money.  %u201CAbondanza%u201D as we say in Italian.

The 7 step solution-- A Presidential Initiative  called FUS

1.      A Coalition of Government, Lenders, HUD, FNMA, 1.3 million Realtors, MLS systems, Appraisers

a.      A Fair and Uniform Standard to process Short Sales and Bank Owned properties (FUS) thereby quickly selling these properties, preventing the continuing%u201D free-fall of prices.%u201D

·        Prevents the existing incompetent and lengthy process%u2014no buyer will not wait 5-6 months for a decision.

·        This is especially important while the home is still occupied

2.   HUD%u2014Laws should be reviewed and changed to allow a better market place for consumers. 

a.      Allowing for seller 2nd mortgages, negotiated between parties a 6%- 8% without fear of fraud.  Yet private investors could charge a 1st at 8.99% and the 2nd at 11.99% not long ago, with stated income.

b.      Investment Banking and Hedge Funds regulations must always be under careful watch%u2026.this is where the real fraud against all of us exists%u2014at the highest levels. 

c.       A 12 month %u201Cinterim loan%u201D for properties that are in disrepair%u2014made available for owner occupied and non owner occupied.  Rhode Island Housing and MASS housing programs and 203K have so many fees and restrictions that it either disqualifies or discourages so many buyers.  CASH BUYERS brings the price lower.

d.      A buyer for 3 family($185,000) non owner occupied applied for a mortgage%u2014required 40%down payment--$74,000., plus closing costs estimated at $9000%u2026..a property that still requires work.  THIS IS INSANE.

3. Realtors%u2014A vital instrument -- 1.3 million Realtors in this Country who are in a strong position to help%u2014 using his/her skills to work and coordinate with buyers, sellers and lenders.  Upon listing the property and at first contact with %u201Cthe lender%u201D, the lender must then immediately order two BPO%u2019s or Certified Appraisal of the property by local Realtors and Appraisers who have applied.  They are most familiar with the local market and when an offer is presented, if there is more than a 90 day lapse%u2014a time adjustment can quickly be made by the appraiser or the person who did the BPO. 

e.       The Realtor immediately begins to prepare the package to send to the lender consisting of the listing contract, the authorization letter, bank statements, w-2%u2019s, pay stubs, hardship letter, list of their monthly expenses and debts, etc.

f.        If the Realtor is directly involved with the listing, the BPO must be assigned to another Realtor.

g.      The lender negotiator must be properly trained and, if possible, have a Real Estate background.  The Realtor, listing broker, must have direct communication with the Negotiator.

h.      The Negotiator MUST HAVE THE AUTHORITY TO MAKE IMMEDIATE DECISIONS and sign off,  just %u201Clike an underwriter%u201D for new loans,,, and sign documents%u2026.the investor must be made aware of the situation%u2026.and all the facts; if he does not cooperate; he stands to lose even more%u2026

i.        Direct access to the negotiator by phone, fax, and e-mail is crucial

j.        7 day DECISION turn-around for short sale and foreclosure decisions from when a qualified offer is presented%u2014BY NOW ALL THE WORK HAS BEEN DONE

We  have buyers; they will not wait 6 months.

4. MLS systems%u2014BO (bank owned) SS (short sale) on the listing.%u2014many may feel that it promotes BO/SS properties%u2026on the contrary%u2026it identifies these properties, they get sold quickly.  When the positive results are reported in MLS, the buyers will gain confidence%u2026. thereby stabilizing property values%u2026. Many buyers have asked me for a list of foreclosed properties%u2026..it is difficult so sort through 1265 listings in my surrounding communities.

5.      Lenders

a.      Lenders to have satellite offices in each state%u2014expediting processing the huge volume of Short Sales and Foreclosures ( 2 in each state%u2014sub-letting space at existing bank location)

b.      Lenders to have two departments%u2014When people call, they are immediately directed to the proper departments

i. Home Retention%u2014Preventative foreclosure

·        Six months of relief for homeowners who, due to circumstances, cannot make payments, cannot sell, and cannot  refinance--yet they have equity in their home from past sales%u2026.if we do not do this%u2026.everyone is going to be on welfare%u2026 This gives homeowners six months to get their house sold.  The payments can be added to the principal with no loan modification, no extra fees;  homeowners provides list of income and monthly expenses to qualify%u2014there must be a change of income to show hardship.

ii.  Short  sale/ Foreclosure

·        Upon listing property, Realtor contacts Lenders immediately and a complete list of required documents be sent to Realtor%u2014and returned to Lender within 10 days. A negotiator is assigned to work with Realtor.

a.      Now you have a qualified buyer%u2014Market value has now been determined%u2014Negotiator must have the authority to sign Purchase and Sales agreement..

b.      7 day DECISION turn-around for short sale and foreclosure decisions from when a qualified offer is presented%u2014BY NOW ALL THE WORK HAS BEEN DONE.  30-45 days total time.

6.   Mortgage Originators%u2014A little preventative medicine%u2014they should be LICENSED AND PROPERLY trained in taking complete applications, having a full and complete knowledge of their mortgage products and have an overview of mortgage processing, underwriting and closing process.

7.  LENDERS for new construction LOANS--PROCEED WITH CAUTION when lending on  new housing projects%u2014determine value, salability and current inventory as well.

In closing, let me quote one our greatest Presidents

Abraham Lincoln said %u201CThe wealth of a nation lies in the homes of its people.%u201D  Then, the reverse is also true%u2026.%u201Dthen the weakness of a nation lies in the lack of homes for its people.  We have lots of homes, and we have created such an enormous nightmare %u201Cwhen so many are losing their homes%u201D.  Yet, the CEO of Countrywide earned $57 million year.

Government must fulfill the needs of the people in a way that it does not make us dependent on government, but independent and secure. By the way, this is also true%u2026in many developing nations%u2026.they need food, clothing, and shelter%u2026.not weapons%u2026..We pay $80. per hour to laborers from this country to be a laborer in Iraq, when there are millions of able bodied men who would work for $10. per hour in their home towns who would take pride in re-building their own country.

In past elections, everyone promises that they will make a change that benefits all Americans%u2026.yet there is no change and the %u201Cstatus quo%u201D remains.   The upcoming elections%u2014everyone says %u201Cthey are the candidate for change and experience%u201D.  If we do the same thing over and over again%u2026can we expect different results?

What if the polls were open%u2026and no one showed up to vote?  What if the malls opened and no one goes shopping%u2026for a day, for a week? What if April 15th came and no one filed their returns unless they were getting a refund?  What if there was a silent revolution in this country%u2026of the people for the people and by the people?  Would things change then%u2026. 

What if there was a silent revolution in this country%u2026of the people for the people and by the people?  Would things change then%u2026.

We ask every Realtor to sign a petition for some relief from %u201Cour government %u201C to help this distressed economy%u2026.we are constantly attempting to fix other countries%u2019 problems, when we can%u2019t fix and wont fix our own%u2026.for sale signs, for rent signs and abandoned homes on almost every corner.  It is easy for government to print more money as they need it%u2026but what do we do? 

We ask for immediate relief from %u201Cour government %u201C to help this distressed economy%u2026reduced interest rates, tax cuts, $500.00, without a Fair and Uniform Standard of Procedure does nothing to handle short sales and bank owned property%u2026.. does nothing to resolve the real issues.    

Update on my story as of February 7, 2008

I received a call from the negotiator yesterday%u2026.they finally received the package that I sent on January 10th.  They are closing the file until I have another offer%u2014after loosing three buyers; I still do not know what they will accept%u2026

2ND UPDATE%u2014ANOTHER OFFER WAS PRESENTED IN MARCH%u2014AS OF TODAY THE BUYER AGAIN IS BACKING OUT%u2014STILL NO ANSWER FROM COUNTRYWIDE.

Thank you%u2026.this is everyone%u2019s battle%u2026..

A petition to our leaders--We are the voice of 1.3 million Realtors