Caught In The Middle Of The Foreclosure Mess

I am glad to see stories like these getting around as unsuspecting homeowners need to know what could happen. It is shameful that our industry has gotten to this level, though the government tends to “overcontrol” when they get involved.

Hopefully this family will get a satisfactory ending, even though it certainly won’t be a happy one.

This is the find of story that needs to be told. While it is totally unfortunate for the Dickson Family, there is a lesson to be learned. Anytime we sell a home that is that close to foreclosure we should contact the lender to insure that the proceedings have stopped.

When Homebanc went out of business I wondered if the escrow accounts for the borrowers would be properly serviced. I published a post on my blog voicing this concern. I have been contacted by two different people whose accounts were not properly handled. One in Jacksonville, FL who’s homeowners insurance had not been paid and one in Chattanooga, TN who’s real estate taxes had not been paid. No telling how many others there are. The loans are supposed to be serviced by Countrywide or BOA. Who knows now.

I would have to agree with Barry on this one (and like Jeremy said it was only one side of the story but it will be the major side that everyone relates to) about something being botched along the way. Unfortunately it had to happen to someone and of course they can’t trace any of their belongings.

I am not the expert on REO’s and I admit I just started working with some companies on REO’s and even I feel overwhelmed, I have also said to some lenders this is all I can handle. One of the big things that I see is that agents that have been in the business for awhile, they have a lot of them, a lot. I don’t know how they can keep up with the weekly/monthly tasks on some of them. Banks just don’t go barging into houses first, sure some have systems that are broken. They would have got all the i’s dotted and t’s crossed before doing something like this IMHO

That is a really scary thought. Sure there are people who messed up, but that doesn’t change the fact that these people are without their possessions. Can you really picture what it would be like to come home to nothing. All photos and family memories are gone forever.

Thanks for sharing the story, it will make me be even more diligent when dealing with bank own properties.

Here in Santa Clara County, I’ve heard that less than 10% of short sales close. I’ve spoken with short sale specialists who claim the key to closing short sales is to submit a complete package to the bank up front, so I suppose you could blame some percentage of those failures on agents who don’t understand the process or don’t follow through in a timely manner, but I also suspect loss mitigators were fearful of taking responsibility for accepting offers that appeared too low. Now with REOs hitting the market at huge discounts, it’s much easier to justify accepting a big writedown on a short sale. I’ve also heard that banks are overwhelmed by the volume of short sales and REOs, so that’s another factor.

Barry, once again you’ve gone too far…

First: Had you actually, you know, read the last paragraph, Jeremy uses words like Us and Our, therefore asserting that the conclusion was inclusive of agents in the industry, as he is one.

Second: You have probably no idea if the state that this occurred in, is a Lien Theory or Title theory state and what implications that state’s statue may or may not have had. The story is absent any indication as to if a Homestead lien or NOD was filed. Many, many of the trustees in some states are simply overworked and cannot possibly record all the docs that they need to. Therefore there are many occasions when the title examiner will find nothing filed and the only indication of the distressed property is the payoff request from the lender, which often times comes when they darn well feel like it and maybe right at the day before closing.

In Virginia, pending Foreclosure, Short Sales etc… are considered legally confidential and the Sellers have not affirmative obligation to tell ANYONE, at any point. This may have been the case in this story, as well. So if the Seller decides not to spill the beans, and there is no recordation of default of posted lien, how exactly is an agent to know this when representing his or her buyers? By most state statues the listing agents are also held to this level of confidentiality.

Are you suggesting that an agent should go to the courthouse everyday post closing and after the attorney and only recognizable entitity that can provide clear title in certain states have provided such? How many days, weeks months do you think an agent needs to call the inept lender to see if they’ve done their jobs?

Exactly what magic skillset do you feel an agent is empowered with that allows them to know about all phone calls made from a lender to a trash-out company?

Third: You are dangerously close to providing legal advice and direction in this rant, and to the best of my knowledge you are not a bar sanctioned attorney in TX.

As far as AG becoming like AR or all the respect that we tend to show one another bothering you…leave. I am sorry that this level of professionalism and regard for another person bothers you. No one is begging for your comments, your posts or for you to stay. You come here and try to bully the authors and people who comment. I don’t know what pleasure you get from that, but I can assure you that most people don’t enjoy it.

I have tried to see your point of view, I have agreed when appropriate and tried reasoning otherwise. I’ve even defended you in the past against people who I have a large amount of respect for – I was wrong and they were right.

I feel for the family.

Yes, there are multiple people at fault here…but in the end, it is the family’s memories that are gone and that is sad.

@ matt..typical, expected response. I can ASSURE you that no transaction I would be involved in would have this happen. Way too much riding on it and way too many people following up to ensure this does not happen. thump the rah-rah real estate agent chest all you want but the agent’s we train would NEVER have this happen to them.

As for practicing law…shhhhh…people may read your comment and see your ignorance. Most, if not all that I wrote is a matter of public record. You simply need to know how to find the information.

By the way..you asked if I knew the state…LMAO…did you actually read the post and article or just fire off a ticked off missive at me? If you had read the post and the linked article you would have seen that this occurred in the State of Texas. I have included a link to their foreclosure laws (we have every state on our website for free)

https://www.realestateradiousa.com/blog/2008/02/24/texas-foreclosure-laws/

You asked..”Exactly what magic skillset do you feel an agent is empowered with …do you really want me to answer that? Here’s one that at least one agent isn’t empowered with..the ability to review the foreclosure laws in a state.

Matt…trust me, this is one area of real estate that isn’t for kids. I stand firm on my original statement and thanks a bunch for underscoring what I said.

@ben..what exactly does this line mean in the post..”continued through the foreclosure process unimpeded”?

I’m sorry..maybe I misunderstood. Not!

No Matthew..I did not twist anything! I was completely respectful to Jeremy (the author) and there was not an iota of abuse written. Can’t stand on that soapbox in this regard.

I questioned why agents don’t police themselves…is that demeaning and disrespectful? hardly. My original comment was not about me at all..why would it be? I pointed out the problems inherent with the situation and stated that the real estate agents had culpability. If you don’t see that then that’s hardly my problem.

What is it that you and others feel that questioning other real estate agents and their handling of affairs is “disrespectful? Do you not want spirited discourse on this forum? Or do you only want that which follows in the path of heralding ALL agents?

It’s easy to point fingers at me and blame me for being the black sheep that hangs out here. How about elevating discussion and talking about issues and problems that agents encounter so this type of thing does not happen again?

My AR comment was based upon the fact that other than Bob above…are you telling me that NO OTHER real estate agent who visits this site can see the problems and potentially misrepresentative actions that could put these agents involved in a position of liability?

Wouldn’t you and others want to know how to avoid these types of problems and how to ascertain this information?

From your last comment I would have to say I guess not!

Barry;
Just for clarity, the foreclosure laws are really not the issue here. The issue is that the lender removed personal property without the authority to do so.
As you know I invest as you do, however I have also be representing lenders for 20 years in the disposition of REO properties, and what happened here was atypical.

Under the policies of most lenders, the people sent out to rekey the property (and then bid the trashout, or remove personal property) should have contacted the lender, let them know that there was substantial personal propety (which to most lenders means more then $300 worth) and looked for some clarification of the occupancy situation.

If the property had been foreclosed upon, occupancy is determined by the amount of personal property in the house. If they property was not yet unpacked, most venodrs and REO agents, would have gone looking for the owner, instead of pulling the trigger so rapidly.

The agent who sold the property to the buyer was not at fault here. If he (or she) had ben tol by the lender that the foreclosure process had stopped, that should have been sufficient, and indeed, the lender is probably the person who will write the check here.

Being a Monday Morning Quarterback only gices the appearance of superior knowledge, not the actual superiority.

I don’t think Barry is wrong on this. While it is atypical, there should be a paper trail for both agents to hide behind that would also allow the buyer to go “Here is the proof! You had no right to enter my property and remove and dispose of my personal property.”

Absent that paper trail, the buck stops with the brokers/agents on this one.

I hope for the buyers’ sake that these brokers have deep pockets.

I stand corrected as I see a new comment

Barry –
there was no one here who needed rescuing. You wre just, once againmaking comments that were inaccurate, and once again you try to substitute being glib for being accurate (and every Eagles fan loves Joe Pisarcik – remember the “Miracle at the Meadowlands”?)

And though you make a snide comment, you still don’t respond to the facts of the matter in my comment.

That the buyer’s agent could have done something better does not make them responsible for the error made by the vendor who cleaned out the property.

Matthew, those documents are what I had in mind.

My opinion here is jaundiced because I have seen screw ups with deals so close to foreclosure in the past. I have seen defaults cured, but trustee sales still go on because people assumed everyone did their job.

I’m also betting that the personal property didnt go to thrift shops.

Hey bob..I’m off double secret probation it seems…you wrote “I’m also betting that the personal property didnt go to thrift shops”

When a foreclosure takes place and the property is cleaned out, the person taking posession is not liable for any belongings left behind.

We did a cleanout when taking posssession last year, and the neighbors who knew the people took their belongings off of the lawn while the owners went to try and rent a Uhaul…it was both sad and hilarious at the same time.

Barry; The unwarranted sense of superiority you bring to these comments amazes me as does the fact that you take statements out of context and respond to them as if they were the entire argument

You respond to a statement “foreclosure laws are really not the issue here” which is not the comment I made.

What I said was ‘Just for clarity, the foreclosure laws are really not the issue here. The issue is that the lender removed personal property without the authority to do so.”

And my statement was, and is accurate – if the lender had gone through the foreclosure process improperly (which the post states they did), that could have been corrected with little fuss or bother. That’s a matter of clearing the chain of title. Remember, this event took place 7 days after closing according to the post, which means that the lender had accepted a sum to satisfy the debt, and title should have been cleared at closing and insurance issued.

The issue here, and the point of the post was that personal property was removed, and disposed of improperly.

You then say,”Having drilled out locks and tossed out furniture personally when taking posession of a foreclosure, the laws of the state ABSOLUTELY dictate how posession is to take place.

When you say “bid the trashout” that would not even take place until possession was given to the lender. Which means it did not sell at auction.”

Aside from the fact that the sentences don’t make sense, you are again quoting me out of context., ignoring the fact that what I said was

“Under the policies of most lenders, the people sent out to rekey the property (and then bid the trashout, or remove personal property) should have contacted the lender, let them know that there was substantial personal property (which to most lenders means more then $300 worth) and looked for some clarification of the occupancy situation.”

For the 20 years I have been representing lenders, and after selling thousands of REO properties, that statement is completely accurate.

If your point was to indicate that after a sheriff sale or auction, the party in possession (who may or may not be the former mortgagor) has not rights, and should consider themselves in danger of such precipitous action, I know you’re wrong in Pennsylvania and New Jersey, and would imagine that you would be wrong in many states in the Union, judging from the concern of lenders and attorneys representing lenders across the country that I associate with. However one place we do agree is that the laws of the state would determine the foreclosure process and the process for the new owner after the foreclosure to take possession of the property.

The fault here is with the lender and their vendors, and possibly the agent for the lender if they were involved in inspecting the property to determine occupancy.

I would agree with Matt’s statement “…. even if everything is done by the agent, there are times (which seems to be this instance) when some loser doesn’t get the memo and orders a “burglary.””
And I agree that in times like these, the vigilance and diligence exercised by an agent needs to be at the highest possible level, because even if you do everything right, something can go wrong. However to escalate that responsibility and make this problem somehow to be laid at the feet of the buyer’s agent is absurd.

Save it Bill…maybe the cheerleaders will buy it..don’t have time for this. you are dead wrong.

“You wrote..”Aside from the fact that the sentences don’t make sense”..they don’t make any sense to you because in this regard YOU HAVE ABSOLUTELY NO IDEA WHAT YOU ARE TALKING ABOUT.

You know in order to have any kind of reasonable discussion with you you have to at miinimum be willing to openly state that agents don’t walk on water and make mistakes quite often. Maybe the agents in this case can call you as an expert witness.

They most assuredly would get a Johnnie cochran type defense..you know..OJ didn’t do it and agents are never wrong.

Like I said, you are wrong on so many points it’s not even worth speaking to you about this.

If anyone wants any information that they need to work foreclosures and understand the process, they can contact me off the record as they often do here…and you can safe face to the choir.

Wow…not sure if anyone has ever followed you into the men’s room but if they have they would have obviously told you that your s#$t most assuredly does indeed stink…contrary to popular belief.

The best laid plans of mice and men …

Barry, you wrote – “You guys here at AG really need to dig deeper and end the all out love fest. It’s like Active Rain on steroids. Let’s have some meaningful discussion and when we see ineptitude call it out so others can learn from it.”

It’s flaxseed oil, Barry, at least that’s what my broker’s telling me it is. I don’t know for sure.

Calling out ineptitude is one of the things I was hoping to do with that post, apparently that didn’t translate, but it certainly wasn’t an attack on any one individual (the agents) or the industry (at least I didn’t intend it to be). I had hoped that it’d be an eye-opener, a reminder that even when all looks well, something can – and will – go wrong. You can be uber-REALTOR®, or investor-extraordinaire, and still screw up.

Goodnight all …

Barry;
It amazes me that when you can’t make a coherent argument, your immediate reaction is to say “.don’t have time for this” and then go into a rant about items unrelated to the points made.

Your sentences didn’t make sense because they were structured poorly grammatically and conveyed no information, not because of anything I said. As far as knowing what I’m talking about concerning REO properties, I was selling REOs before you knew they existed, so that’s just absurd.

As far as your statement “you have to at minimum be willing to openly state that agents don’t walk on water and make mistakes quite often” Of course they , they’re human. In fact I pointed out that the agent hired by the bank might have some responsibility here, but you completely ignored the facts to make your argument as you do regularly.

Again, your rant avoided the point of my comments which was the error made by the lender and their contractors and/agents (and the term here does not mean real estate professionals alone, but all of the people they employed on their behalf to act for them in this matter). You still haven’t addressed that, and they are the real culprits here.

Barry, I do work as an expert witness, and have been admitted as such in Municipal, State and federal courts. But in this instance the buyers are suing the Mortgage company whose actions caused their problems, and the buyer’s agent don’t need an expert witness on lender practices. In fact if anyone where to hire me here it would be the buyers to testify about the policies of REO departments of large national lenders work. However I am sure that they would find someone more local who would provide them with the same information.

You make the statement “you have to at minimum be willing to openly state that agents don’t walk on water and make mistakes quite often. ” After almost 30 years of working on Grievance and Ethics Committees, Hearing Panels, and Appeal Panels, I would say that statement is another piece of Cunningham bombast. I actually work towards the improvement of agent performance in my industry. But you never let facts or the truth get in your way when you want to make a glib statement.

Jeremy made a terrific point, attempting to fix a problem, which you turned into an exercise in fixing blame (and doing a poor job of that). He said “it’s a sad state of affairs we’re seeing and we ALL have an opportunity to make it right. It’s not a THEM problem, it’s an US problem. I have no doubt that readers here are working to make their marketplaces better, but there’s still work to do.” Now there is an accurate, and substantial statement.

I agree, its difficult to have a conversation with you. A conversation implies a dialog , but each Barry response is a monologue on a topic that was not part of the conversation, filled with rhetoric and inaccuracies.

In all of my responses to you in every conversation, your failure to make a coherent point seems tied to an inexplicable inability to continue with specific points in the conversation. And each new statement of yours seems to be rant after rant, with no substance other then “Agents are terrible, everything is their fault, they are all beneath my contempt”

I have no interest in who follows you in to the men’s room. and I would rather avoid your bathroom analogy, as crude and inaccurate as it is inept. Were I to be asked about your response, I would say it is almost Shakespearean. It reminds me of the speech from Macbeth, “.. a tale told by an idiot, full of sound and fury,Signifying nothing”

@Broker Bryant – Great idea! With the added benefit of being simple.

BB..good idea but it’s not needed..especially here in Florida. If you want to know how to ensure that the foreclosure is indeed stopped and how the real estate agent representing the Buyer can absolutely make sure (yes it is possible)..just send me an email and I will get you the information.

As one who personally evicts, does the trash outs and removes belongings and understands the entire foreclosure process from beginning to end (and beyond..yes there is a beyond)..I would be more than willing to help you in any way I can. Like I’ve told you BB…you are a stand up guy and I admire you and would be willing to assist you at any time.

Contrary to what has been said, there is a very defined course of action and once followed there are no problems.

I have no idea why some here simply do not get the fact that it is absolutely the agent’s responsibility and all they have to do is take the time and modicum of effort and this type of thing would 100% NEVER happen…NEVER. Ineptitude and inexperience caused this and it ABSOLUTELY can be avoided. Don’t let anyone tell you otherwise.

does that mean you don’t want to come on the show?

Harriman Team,

You’re exactly right and it was a regrettable choice of timing and format. It’s not reflective of the spirit of AG. I do apologize.

Sorry…my previous post may have been off base – but i can completely feel the pain of the Dicksons. I read the article and just went off on my own tangent – i hope you can understand.
I didn’t mean to take any attention away from the family…i hope everyone understands that.