Love's Real Stories

Dear Doug,

We just helped our daughter buy a house. We also co-signed on her purchase loan. Boy, have things changed since we last got a home loan. It was rough going! It took longer and we had to provide a lot more personal information than we remember from before. Our loan officer assured us that it was nothing personal, that loans are just tougher these days. Here’s our question: In light of the economic times, shouldn’t the government be making it easier rather than harder to get loans?

                                                                                                                                                                                    –Loaned Out

Dear Loaned Out,

We feel your pain. It’s caused by the backlash resulting from the loose lending practices of the last decade, when the only qualification for many a loan was proof of a pulse. Not only are loan qualifications stricter now, but Congress is looking to make it even harder by tearing down the financing system as we know it. Congress wants to get rid of government-backed loans, by assassinating Fannie Mae and Freddie Mac, the historic gatekeepers of affordable loans. We can understand Congress’ zeal to nail somebody for causing hard economic times, but the demise of Fannie and Freddie would only make things worse.

Here’s what Beth Peerce, President of the California Association of Realtors (C.A.R.) has to say about it:

“Eliminate Fannie Mae and Freddie Mac. Do away with the mortgage interest deduction. Reduce the conforming loan limits. Everyone has an answer for solving U.S. economic woes today, but as a real estate industry veteran and the president of C.A.R., I know restructuring the nation’s mortgage finance system is not that easy.

The U.S. government has long been a strong advocate of homeownership, but as the economy continues to stumble, government officials are looking for ways to reduce government spending. Scaling back (and eventually eliminating) the government-sponsored enterprises Fannie Mae and Freddie Mac is just one of the possibilities on its agenda. At C.A.R., we know the extreme importance of Fannie and Freddie, and are making it a top priority to fight to save these mortgage market mainstays.

As C.A.R. Chief Executive Officer Joel Singer explains, ‘Fundamentally, this debate is about three things: Maintaining the flow of mortgage funds under any market conditions, ensuring that affordable mortgages are available, and preserving a range of mortgage products to serve the marketplace.’

We are urging Congress to provide homeowners and home buyers with affordable financing and help stabilize local housing markets.

It’s a complicated issue that I know we will be hearing more about in the months ahead, and C.A.R. will continue to keep you informed on the latest developments.”

So, Loaned Out, let’s hope C.A.R. and N.A.R. can lobby Congress to back off of their move toward killing government-backed loans. If Fannie and Freddie go down, a typical home purchase loan will require a down payment of at least twenty per cent. Terms like that would put the brakes on a dragging economy.

The road to recovery needs to be paved, not abandoned.

I got to know Steve Williams, local real estate icon, at his funeral. Oh, I had been acquainted with him. I made a point of meeting him, twenty-odd years ago, in hopes of learning anything I could. I was a real estate rookie; he was the pro. I heard people say things like “How can one guy sell a hundred houses a year in a tiny town like Paradise?” Or “I wish I knew half as much as Steve Williams does about selling.”

Steve agreed to meet me at a down-home Paradise coffee shop. I had to wait to ask my question (“How do you do it, Steve?”) because he knew everyone in the place, and everyone had a greeting for him. He for them too; the personal kind, like, how are the kids, good game last week, did you get the boat fixed. His mere presence energized the place.

Steve answered my question. He said his success had to do with discipline, organization, and goal-setting. His days began at four or five in the morning. First thing, he programmed his schedule for the coming hours. “That makes it easy, Bud,” he said, “then I’m just following orders the rest of the day.” He shared private stuff most sales people guard as secrets: his unique presentation materials; his prospecting techniques; his negotiating strategies.

I learned a lot about real estate from Steve. The other day at the Celebration of Life, I learned a lot about Steve. I hadn’t known he was a Marine who served two tours in Viet Nam. Or that he had four kids he poured his heart and soul into. Or that as he got to know you, you might earn the privilege of being referred to as (Expletive)—head, or Dufus. That’s language I can relate to.

I learned Steve liked to load his Suburban with his kids and their friends to go get burgers. He would drive down the hill to Chico with his left foot hanging out the window, flip-flop flapping. That’s a guy I can relate to.

Steve’s older brother told a story of when they were kids, entrusted with the family motorboat for the first time. Steve convinced his brother to pull off-river onto a beach to visit a concession stand. Steve jumped out; his brother safeguarded the boat. Steve returned with an adult couple in tow, strangers, to whom he had promised a tour of the river. Though the river was unfamiliar to him, Steve delivered a tour-guide monologue worthy of the event. Steve later shared with his brother the two dollars he had arranged as payment; a salesman from the start. That’s a kid I can relate to.

Steve was a Bay Area sports fan. That’s a man after my own heart.

By all accounts, a great man, a fun and generous man, is gone. Steve Williams will be missed by multitudes. I’m sorry I didn’t get to know him better when I had the chance. We might have partnered in beers and burgers at a ball game. I might have earned myself a colorful new knick-name.

Dear Doug,

We bought our house because it fit the lifestyle of our two dogs so well. Have you worked with other pet-conscious people?

                                                                                                                                                                                                      –Pet People

Dear People,

It has long seemed to me that we realtors should acknowledge the animals in our business. I, for one, can count at least a dozen pet-clients in my personal Client Hall Of Fame. My first pet-client inductee was Roscoe the Parrott, for his uncanny ability to influence my toughest client, his master.

Harry Stenner was an explosive old guy, and his fuse was lit tonight. Cigar clenched in his teeth, ice cubes jumping from his scotch-glass, he pushed back from the table and jolted upright through the smoke-cloud around his head.

Harry’s eruption was a reaction to the offer presented to him and his wife by Julie Ascomb, buyer’s agent. He puffed cigar smoke and paced about the room mumbling and grumbling expletives, mainly indecipherable. Roscoe the Parrot paced the bottom of his cage performing a perfect imitation of Harry’s movements and vocals, in duet with his fuming master.

“They’re insane!” Harry bellowed.

“They’re insane!” Roscoe echoed.

“Oh Harry, please!” said Mrs. Stenner, exasperated and scolding. “Oh Harry, please!” snapped back Harry. “Oh Harry, please!” screeched Roscoe.

“I’m sorry you’re disappointed by my buyers’ offer,” said Julie, “but they wanted me to tell you they love your home and are serious buyers.”

“Well they should have made a serious offer,” Harry said into his scotch-glass, more than to Julie.

“My buyers have instructed me to tell you they would welcome a counter-offer, and—“

“Tell ‘em to stick it!” Harry slurred through his mouthful of cigar and ice cubes, which sounded more like “Hell un da schtick id!”

“Schtick id!” yelled Roscoe.

I whacked the tabletop with my palms, and said, “Dammit, Harry! We’ve been on the market for eight months. This is a perfect offer from a strong buyer with a great agent. See this offer?” I held it up and wobbled it for him to see. “You should sign this offer. Just sign it!”

Harry’s top lip curled. His eyeballs were like shotgun barrels pointed at a spot between my eyes. He was a madman, lethal, ready to go off.

It occurred to me that my sales technique was flawed. My survival instinct led me to seek a distraction. I stood up and edged over near the cage. “What’s that Roscoe? I said. “Say what?”

“Say what?” said Roscoe.

“Did you say sign it?” I repeated, “Sign. It.”

Roscoe flicked his head back and forth as if concentrating. He peered at me then looked directly at Harry and croaked, “Sign it?” And again, “Sign it.”

Harry’s cheeks puffed out. His eyebrows came down and compressed his eyes. He shot a stare at Roscoe, then at me, then back at Roscoe.

“Bwaahaahaa!” It was a belly laugh. “Haarrrrh, haarrrh, haarrrh, haarrrh!” Harry put his arm around my shoulder. “Yeah, okay. Sign it!” he said. “Sign it, it is.”

“Damn bird!” said Harry shaking his head. “Damn bird.”

“Damn bird!” said Roscoe. Damn bird!”

Two big pieces of good news just rolled in from the world of short sales, and we’re rolling it out for you here. One:

If you caught this column a few weeks back, you may remember Ron Balkman featured therein, who described himself as “a hounded, hunted man,” and dubbed himself “The Fugitive.” He was the seller of a short sale being chased by collection agencies for the debt on a second mortgage. “I thought that when the bank approved my short sale, I was in the clear,” he said, “but after it closed they sent a pack of hyenas after me for the money.” At the time of his sale, the law allowed banks with a Second Loan to pursue sellers for the unpaid amount, though it was illegal for banks with a First Loan to do that.

The good news is the law changed as of last Friday, July 15th. It is now against the law for Second Loan holders to chase sellers for any money after allowing a short sale.

Here’s the newsline from the California Association of Realtors (CAR):

“CAR applauds Gov. Brown on signing SB 458 into law. SB 458 extends the protections of SB 931 (2010), to ensure that any lender that agrees to a short sale must accept the agreed upon short sale payment as payment in full of the outstanding balance of all loans.

‘The signing of this bill is a victory for California homeowners who have been forced to short sell their home only to find that the lender will pursue them after the short sale closes, and demand an additional payment to subsidize the difference,’ said C.A.R. President Beth L. Peerce.  ‘SB 458 brings closure and certainty to the short sale process and ensures that once a lender has agreed to accept a short sale payment on a property, all lienholders – those in first position and in junior positions – will consider the outstanding balance as paid in full and the homeowner will not be held responsible for any additional payments on the property.’”

SB 458 contained an urgency clause making it effective upon signing.

Two:

Last December, C.A.R. leadership met with representatives of Bank of America and asked the lender to accept backup offers without starting the process over again.  C.A.R. also has raised this issue with Fannie Mae, Freddie Mac, and Wells Fargo, and hopes they will follow Bank of America’s lead with this process.

Over the past several months, I’ve been keeping you abreast of our progress in addressing your concerns about short sales.  I’m happy to tell you of another significant achievement.  Just last week, Bank of America announced it will accept backup offers on short sales and will allow the back-up offer to take over if the first buyer does not complete the transaction, without requiring the process to start again.  Under this new guidance, agents will no longer have to initiate a new short sale in Equator if the original buyer walks away from the transaction.  Instead, the agent can continue with the original transaction in Equator and work with the same short-sale specialist.

Mr. Carpang pointed the gun to his temple and flicked his thumb, then jerked his head sideways in the classic blow-your-brains-out gesture, with his eyeballs rolling and his tongue lolling. The “gun” was his forefinger and the suicide pantomime was his response to the question “What was your experience like in buying a short sale?”

Mr. Carpang and his wife were interviewed as part of the Short Sale Survivors Series, exploring real-life examples of what is commonly referred to as the “short sale nightmare.”

Mrs. Carpang said “Giving birth to my babies was like a walk in the park compared to what we just went through!” Ironically, the Carpang’s purchase was nine months long.

Mr. Carpang began a thoughtful and detailed description of their experience. That is to say, he launched into a tirade which included some foaming at the mouth and quite a bit of arm-waving. He showered the room with expletives, sarcasms, and even a few dangling participles. His exhortations gathered force and whipped through the room like a tornado of bitter words. When he began using really bad language like “asset managers”, and “loan-lock deadlines”, he was asked to kindly pause in his pronouncements.

Reading between the lines, the following was pieced together:

August 2010: Offer made. The Carpangs’ offer of $290,000 is accepted by a seller who owes $395,000 against his house. The Carpangs’ Realtor warns them about getting involved. “She told us short sales can be painful,” said Mr. Carpang, “but we were so naïve back then.”

September 2010: The sale is in limbo. B of A refuses to hint at whether they’ll accept a short payoff, but orders their own appraisal to substantiate the sales price.

October 2010: Nothing. “Nada,” said Mr. Carpang, “Everyone’s calling, emailing and faxing these people, these ‘Asset Managers’ (Mr. Carpang used a more colorful descriptive term), and they ignore, ignore, ignore!”

November 2010: Still nothing. “I wanted out!” said Mr. Carpang. ”But,” said Mrs. Carpang, “this house had everything we wanted.” Mr. Carpang threw his head back and flung his arms up in apparent agreement.

December 2010: Forced resolve. “I guess the bank needed a holiday after all that hard work,” said Mr. Carpang. His calm resignation was demonstrated by his staring eyes and the teeth-clenching grin of a madman.

February 2011: B of A rejects the short sale. The Carpang’s Realtor goes into hyper-mode and somehow manages to overwhelm B of A with facts and data, and sweat and tears, keeping the deal alive.

March 2011: B of A approves the short sale, but only at a higher price- $325,000. The Carpangs are “beaten and weary,” but decide to stay in the game, and begin their purchase financing arrangements.

April 2011: New appraisal. The Carpangs’ purchase financing appraisal comes in low, at $310,000. The Carpangs can’t get a loan if B of A won’t agree to the lower price. Oddly, B of A agrees.

May 2011: The Closing. The sale closes at $310,000.

June 2011: The big question. Was it worth it? “Yes, oh yes, I love my home,” said Mrs. Carpang.” And Mr. Carpang ? “Oh yeah,” he said. But his head was shaking back and forth as he said it, and he had those staring eyes and that teeth-clenching grin.