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Genius Needed @ Countrywide



genius.jpgI’m no genius, but am I crazy in my view that Countrywide needs an infusion of intelligence?

countrywide.jpgWe had a short sale fall through because the holder of the second, Countrywide, wouldn’t sign off on the deal. Why? Because their appraisal came back showing the property worth about $25K more than the sale price. With the rejection, the property will be auctioned off on the courthouse steps in about two weeks.

It is highly unlikely that a buyer will be found in two weeks for this property for $625K. Why? Because there is unfinished construction – two rooms with stud walls and rafters still showing, subflooring still needed in the new kitchen, no cabinets, no master bed or bath sheetrock or fixtures and the house is still open to the elements in a couple of places.

So, what is accomplished by rejecting this deal?

  • They are adding to the burden of a single woman homeowner with three children who lost her job as a result of the subprime meltdown. She is swimming as fast as she can and floundering trying to keep her life intact to some degree.
  • They are hurting the neighbors because property values will suffer as a result.
  • They are adding to the recovery time in the national housing mess because it appears that they are not responding in an appropriate manner to expedite these types of situations.

In our conversations with Countrywide, what we run into is unsympathetic, powerless representatives who cannot make decisions, who cannot take action. It seems that outdated policies implemented over ten years ago after the last mess and during good growth years are still in place.

I’ll admit to some personal bias toward Countrywide as they held the mortgage on the last house I owned and dealing with them as a result of a mail glitch and a late payment was met with no understanding and empathy (given our current experience – perhaps this is a condition for employment).

And while I focus on Countrywide because of this short sale situation, I think the problem encountered with them is representative of entire the lending industry at present. What’s needed is for these big institutions to form leaner, meaner crisis management teams to handle these situations where power and authority is given to their agents to expedite these deals and help get this short sale and foreclosure mess cleaned up as quickly as possible.

These institutions are going to lose big bucks. There is no way around that. Pinching pennies on individual deals – no matter how it adds up – is not going to improve their bottom lines enough to make up for the ill will they cause by trying to minimize the damage. They should be focusing on how to help people and maximize good will while building the foundation for future business that will then pay the freight on what’s lost during this cleanup.

This particular deal and the decision made gains this particular lender nothing but bad press and negative word of mouth advertising – not from me and this post, but from the single mom, her family and friends who have a very personal story of hurt and tragedy to tell others about the big indifferent company that couldn’t care.

As I said, I’m no genius but I know that when people extend themselves to help others through bad times it usually results in increased business because it is natural for people to turn to people and companies who have taken a personal interest in them.

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  1. Jeff Brown

    December 2, 2007 at 1:27 pm

    John — Correct an error on my part here, but if at the auction it sells for far less than your short sale price, doesn’t Countrywide come out with either less than the short sale, or zip?

    Am I missing something here?

  2. john harper

    December 2, 2007 at 1:45 pm

    Jeff – in this case the holder of the second has little chance of getting anything – short sale or foreclosure. This is why their decision seems not only illogical, but inhumane as well – no one, including them comes out better due to their decision.

    I failed to mention that the holder of the first would have been covered, but going to auction opens the holder of the first up to a loss making them another victim of this whole mess.

    I am sure that Countrywide is in many similar situations where the roles are reversed – them holding the first and someone else holding the second.

  3. Patrick Hake

    December 2, 2007 at 11:59 pm

    Wiped out piggyback seconds are probably the largest reason most short sales don’t work.

    Most first lean holders are willing to work with borrowers. Some are even willing to give a small token amount to the 2nd.

    If most of the subprime loans were actually 100% firsts and not 85/15 or 90/10 loans, many of the current bank owned homes could have been sold as pre-foreclosure deals.

    I hope when this is all said and done home buyers learn the danger of financing with a piggy back second, just to avoid PMI.

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Economic News

How small businesses can keep up with the changing workforce

(ECONOMIC) Trade schools are booming as career outlook grows. College enrollment is down. The workforce is changing. How can small business keep up?



Trade employees in the workforce

College enrollment has dropped off by three million in the last decade, with a drop-off of one million due in the last several years as a direct side effect of the Covid-19 pandemic. This phenomenon clearly does not bode well for the future of the United States’ economy and workforce, with students who attend low-income schools and come from low-income families being the most affected. These changes are disproportionately affecting students from low-income schools and families, the very people who need higher education the most, and are erasing much of the work done in the last decade to help close the income and race gap between students, colleges, and socioeconomic backgrounds.

Enrollment in trade schools is skyrocketing.

Recently, trade schools have seen a 40% bump in enrollment across the board. Many students are enticed by the fact that trade schools are affordable and offer a quick turnaround, with students paying $16,000 or less for their program, and their training taking a year or less to complete. Beyond that, those who complete trade school is all but guaranteed a job on graduation day. Their earning potential is often two or even three times higher than the initial cost of attending the program. As many have found, the same cannot always be said about those who pursue a college education.

While the average cost of college at an in-state and public institution hovers at around $28,775 per year (according to Forbes) and takes an average of four years to complete means that trade students have a cheaper educational cost, (between $16,000 to $33,000 for the entire program, or about equal to just one year of a public college tuition) can get work in their field more quickly, and can usually make more than their educational costs in their first year on the job. Tradespeople make an average of $54,000 fresh out of trade school, which rivals the role average college student’s first salary of $55,000. It’s no wonder so many people are choosing to forgo a formal education for trade school!

The almost insurmountable cost of college combined with ever-growing inflation and a lengthy list of requirements just to get a post-college job, all for a low salary and with students having hefty loans to pay back, also play a key role in the downturn in the popularity of college.

The implication of fewer college-educated people, however, means that over time, the United States as a whole could face an economic downturn, as it gives rise to many more blue-collar workers. This can irrevocably alter the makeup of the workforce. Despite current unemployment rates being among the lowest they’ve ever been, the American people are already starting to see a shift in the labor market.

Already, we see a strain in the labor market when 25% of skilled workers in the U.S. exited the workforce following the Covid-19 pandemic. The economy has become so highly specialized that if the U.S. were to keep up the trend of losing college-educated workers, there could irreversible damage to the United States’ economy, deepening the ever-growing divide between the middle class and the working class, further reducing the ability to affect the global economy, knocking the United States out of the classification of a “global superpower.” To make matters worse, much of the United States labor pool is outsourced, and we are seeing the rise of artificial intelligence and robotics taking over many jobs, especially minimum wage jobs. While none of these factors alone vastly affect the U.S. labor market, this is only the tip of the iceberg.

So what can employers do when the makeup of the workforce starts to shift?

Employers could shift the focus on the years of experience rather than the type of education the potential employees have, as well as offering more extensive on-the-job training, which is already commonplace in some industries. Even for those with a college education, the requirements for entry-level jobs seldom match the salary, with many employers requiring a four-year degree, two or more years of experience, and fluency in different programs which vary from company to company. Employers, if possible, need to offer higher salaries with fewer requirements, as many young people are finding the pursuit of college, plus the various other requirements just to be considered for a barely above minimum wage job, while they’re drowning in student debt fruitless, so they forgo college altogether.

A post-pandemic society looks vastly different, and employers must adapt to keep up.

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Economic News

Boomers retirement may be the true reason behind the labor shortage

(ECONOMY) Millennials and Gen Z were quick to be blamed for the labor shortage, citing lazy work ethic- the cause could actually be Boomers retirement.



Older man pictured in cafe with laptop nearby representing boomers retirement discrimination.

In July, we reported on the Great Resignation. With record numbers of resignations, there’s a huge labor shortage in the United States. Although there were many speculations about the reasons why, from “lazy” millennials to the number of deaths from Covid. Just recently, CNN reported that in November another 3.6 million Americans left the labor force. It’s been suggested that the younger generations don’t want to work but retiring Boomers might be the bigger culprit.

Why Boomers are leaving the labor force

CNN Business reports that 90% of the Americans who left the workplace were over 55 years old. It’s now being suggested that many of the people who have left the labor force since the beginning of the pandemic were older Americans, not Millennials or Gen Z, as we originally thought. Here are the reasons why:

  • Boomers are more concerned about catching COVID-19 than their younger counterparts, so they aren’t returning to work. Boomers are less willing to risk their health.
  • The robust real estate market has benefitted Boomers, who have more equity in their homes. Boomers have more options on the table than just returning to work.
  • Employers aren’t creating or posting jobs that lure people out of retirement or those near retirement age.

As Boomers retire, how does this impact the overall labor economy?

According to CNN Business, there are signs that the labor shortage is abating. Employers are starting to see record number of applicants to most posted jobs. FedEx, for example, just got 111,000 applications in one week, the highest it has ever recorded. The U.S. Bureau of Labor Statistics projects that the pandemic-induced increase in retirement is only temporary. People who retired due to the risk of the pandemic will return to work as new strategies emerge to reduce the risk to their health. With new varients popping up, we will have to keep an eye on how the trend ultimately plays out.

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Economic News

Is the real estate industry endorsing Carson’s nomination to HUD?

(BUSINESS NEWS) Ben Carson’s initial appointment to HUD was controversial given his lack of experience in housing, but what is the pulse now?



NAR strongly backs Dr. Carson’s nomination

When President-Elect Donald Trump put forth Dr. Ben Carson’s name as the nominee for Secretary of Housing and Urban Development, NAR President William E. Brown said, “While we’ve made great strides in recent years, far more can be done to put the dream of homeownership in reach for more Americans.”

At the time of nomination, the National Association of Realtors (the largest trade organization in the nation) offered a positive tone regarding Dr. Carson and said the industry looks forward to working with him. But does that hold true today?

The confirmation hearings yesterday were far less controversial than one would expect, especially in light of how many initially reacted to his nomination. Given his lack of experience in housing, questions seemed to often center around protecting the LGBT community and veterans, both of which he pledged to support.

In fact, Dr. Carson said the Fair Housing Act is “one of the best pieces of legislation we’ve ever had in this country,” promising to issue a “world-class plan” for housing upon his confirmation…

>>>>>Click to continue reading…<<<<<


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