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TLStockPicks (89.11)

I'm trying to fix the real estate market, but the banks won't let me!

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March 03, 2009 – Comments (3)

I rent my apartment.  I want to own a house.  I found a vacant foreclosure that I want to buy.  By purchasing this house, I can reduce the supply overhang in this country from 14.5415516 months to 14.5415516 months. 

The seller's broker says, "No offers with contingencies.  If you want a mortgage, we want a mortgage commitment.  No approval, no pre-qual, no doctor's note."  My lending bank says, "We don't give mortgage commitments until the house is under contract.  Here's your approval letter again."

So as the public tries to sop up the best-priced houses--the ones that the banks want off their books--and prop up the housing market, it's not even a matter of whether you can get a mortgage due to your credit... it's whether you can use that mortgage due to some catch 22.  And the saddest part is that the banks probably don't even know what's going on; they hire some asset management company that handles it, and they in turn go to these large-volume low-commission brokers and just say, "serious buyers only."  The brokers in turn don't want to waste any of their own time since they're getting paid squat and their agents are salary based and bottom-tier, so they decide to interpret "serious" to mean "all cash offers only."  Right, because nobody purchasing a home with a mortgage contingency has ever been serious.

So I tried to fix your housing crisis.  I failed.  Here's to 5 more years!

3 Comments – Post Your Own

#1) On March 03, 2009 at 8:07 PM, anchak (99.85) wrote:

If you are serious..... get an appraisal done on your own dime ( you can maybe ask that to be split/covered at closing) - the bank would be more interested.

Also, if you know which bank  or for that matter Govt Agency owns the foreclosure - call them up directly and ask. They would be much more accomodating

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#2) On March 03, 2009 at 9:53 PM, TLStockPicks (89.11) wrote:

No, the lender (wells fargo) for no explicable reason will not allow an appraisal that they do not order.  And they will not order it until the house is under contract, even if I front the cost (I asked why; they just said it's against their policy).

The owning bank is Deutsche Bank.  They really don't care about the individual properties and hand them off to asset management companies.  I'm not sure if RREEF does their residential stuff but if they do, that's where I have been headed; but until then I'm kind of stuck in this catch22 situation.

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#3) On March 04, 2009 at 1:08 PM, anchak (99.85) wrote:

There's one other suggestion I could think of....Assuming you like the house and thus willing to do a down payment - put the entire downpayment with the Title company as Good Faith .....this can show committment on your behalf.

Basically this is how I would put forth the argument to the Asset Manager ( they are I think a little tired of handling one-off buyers - who disappear) -

(1) You have a pre-approval from Wells - a reputable bank. That means there is nothing wrong with your CREDIT WORTHINESS

(2) You are putting up a sizeable Down - as Good faith - shows your committment to the property

Then all its left to - and this is where Wells is coming from is the STATE OF THE COLLATERAL - ie the property itself. They can commit easily if they feel the transaction can happen at a value not egregious.

If the property is not dilapidated - this should be enough. If not - walk away - there can be something else you do not know

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