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Is The FDIC Killing Short Sales?

I had been trying to get One West to honor my loan modification that Indymac had given me before they went belly up. Indymac modified my loan and lowered my interest rate and then when One West Bank took over my loan they revoked my loan modification due to the contractual agreement that they had with the new Investors (George Soros and Michael Dell). This contractual agreement basically states  that they do not participate in the HAMP program. I found this odd since One West is  included on the Making Homes Affordable website list of program members mortgage servicers. They formalized their commitment to the MHA program through a signed contract and yet they refuse to participate in the HAMP program.  That was my first indication that something was wrong… very wrong. In my research I came across the following information and it was then that I realized that homeowners were being robbed of their homes and their dreams and something had to be done. Is The FDIC Killing Short Sales? IndyMac was taken over by the FDIC and sold to OneWest Bank in March/2009.  Guess who the investors are behind OneWest?  George Soros, Michael Dell, Steve Mnuchin (former Goldman Sachs executive), and John Paulson (hedge-fund billionaire). Now, listen to the deal they got from the FDIC…. Basically, they purchased all current residential mortgages at 70% of par value (70% of the outstanding loan amounts).  They purchased all current HELOCS at 58% of Par Value!!! Next, in order to “sweeten the pot”, the FDIC stepped in and guaranteed the following:  For any residential mortgages where OneWest experiences a loss, the FDIC will step in and cover anywhere from 80%-95% of the loss.  The loss is calculated using the ORIGINAL LOAN BALANCE, not the amount that OneWest paid for the loan.  Let’s use my clients situation as an example: Loan Amount is $478,000, plus 6 months of missed payments, for a grand total of $485,200 OneWest pays $334,600 for the loan We have an all cash offer of $241,000, net to OneWest. So, let’s do the math, shall we?  The net loss, according to the FDIC formula is the ORIGINAL LOAN AMOUNT minus the amount of the offer.  In this case, $485,200-$241,000, or $244,200.  Next, the FDIC, according to their Loss Share Agreement, writes a check to OneWest for 80% of the so-called “net loss”.  So, in this case, OneWest gets a check from Uncle Sam for $195,360 (.80 X $244,200). Add the $195,360 to the sales price of $241,000, and you get a grand total of $436,360.  Remember, OneWest paid $334,600 for the loan.  So, OneWest puts $101,760 in their pocket, thanks to the FDIC.  Folks, that is over $100k of our hard-earned tax dollars! So, you ask…Why does this program hurt short sales?  Because, our brilliant government offers this SAME PROGRAM FOR FORECLOSURES!  The only difference is, the government picks up 80% of the tab on all of the extra costs associated with a foreclosure (BPO’s, upkeep, utilities/maintenance, legal fees, etc.) So, If I’m OneWest, why would I want to waste my time negotiating through a Short Sale, when I can make the same amount of money (if not more) by just letting it go to foreclosure?  And we wonder why nobody can get a Loan Modification?  Why would OneWest approve a loan modification for this guy, when they can foreclose and make over $100k?  And, to add injury to insult, they have held this loan for 6 months!  Not a bad ROI, huh? The scary thing is that over 50 banks have Shared Loss Agreements in place with the FDIC.  Some of them include:  Bank of America (go figure), CitiMortgage, Wells Fargo, etc. This entire agreement between the FDIC and OneWest can be found here, on the FDIC website.  It’s all there, for the world to see!  They have it all layed out.  All of the formulas, worksheets, etc. Now, it’s up to us to bring it to the attention of our elected officials and the media.  Enough is Enough! Robert G. Hertzog Phoenix Real Estate Consultant The entire article can be found at  http://activerain.com/blogsview/1281177/is-the-fdic-killing-short-sales-. SHARETHIS.addEntry({ title: "Is The FDIC Killing Short Sales?", url: "http://homeownerrevolution.com/?p=39" });

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Is The FDIC Killing Short Sales?

Posted by admin | Posted in Fighting back | Posted on 17-12-2009

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s-FDIC-AS-LANDLORD-largeI had been trying to get One West to honor my loan modification that Indymac had given me before they went belly up. Indymac modified my loan and lowered my interest rate and then when One West Bank took over my loan they revoked my loan modification due to the contractual agreement that they had with the new Investors (George Soros and Michael Dell). This contractual agreement basically states  that they do not participate in the HAMP program. I found this odd since One West is  included on the Making Homes Affordable website list of program members mortgage servicers. They formalized their commitment to the MHA program through a signed contract and yet they refuse to participate in the HAMP program.  That was my first indication that something was wrong… very wrong.

In my research I came across the following information and it was then that I realized that homeowners were being robbed of their homes and their dreams and something had to be done.

Is The FDIC Killing Short Sales?

IndyMac was taken over by the FDIC and sold to OneWest Bank in March/2009.  Guess who the investors are behind OneWest?  George Soros, Michael Dell, Steve Mnuchin (former Goldman Sachs executive), and John Paulson (hedge-fund billionaire).

Now, listen to the deal they got from the FDIC….

Basically, they purchased all current residential mortgages at 70% of par value (70% of the outstanding loan amounts).  They purchased all current HELOCS at 58% of Par Value!!!

Next, in order to “sweeten the pot”, the FDIC stepped in and guaranteed the following:  For any residential mortgages where OneWest experiences a loss, the FDIC will step in and cover anywhere from 80%-95% of the loss.  The loss is calculated using the ORIGINAL LOAN BALANCE, not the amount that OneWest paid for the loan.  Let’s use my clients situation as an example:

Loan Amount is $478,000, plus 6 months of missed payments, for a grand total of $485,200

OneWest pays $334,600 for the loan

We have an all cash offer of $241,000, net to OneWest.

So, let’s do the math, shall we?  The net loss, according to the FDIC formula is the ORIGINAL LOAN AMOUNT minus the amount of the offer.  In this case, $485,200-$241,000, or $244,200.  Next, the FDIC, according to their Loss Share Agreement, writes a check to OneWest for 80% of the so-called “net loss”.  So, in this case, OneWest gets a check from Uncle Sam for $195,360 (.80 X $244,200).

Add the $195,360 to the sales price of $241,000, and you get a grand total of $436,360.  Remember, OneWest paid $334,600 for the loan.  So, OneWest puts $101,760 in their pocket, thanks to the FDIC.  Folks, that is over $100k of our hard-earned tax dollars!

So, you ask…Why does this program hurt short sales?  Because, our brilliant government offers this SAME PROGRAM FOR FORECLOSURES!  The only difference is, the government picks up 80% of the tab on all of the extra costs associated with a foreclosure (BPO’s, upkeep, utilities/maintenance, legal fees, etc.)

So, If I’m OneWest, why would I want to waste my time negotiating through a Short Sale, when I can make the same amount of money (if not more) by just letting it go to foreclosure?  And we wonder why nobody can get a Loan Modification?  Why would OneWest approve a loan modification for this guy, when they can foreclose and make over $100k?  And, to add injury to insult, they have held this loan for 6 months!  Not a bad ROI, huh?

The scary thing is that over 50 banks have Shared Loss Agreements in place with the FDIC.  Some of them include:  Bank of America (go figure), CitiMortgage, Wells Fargo, etc.

This entire agreement between the FDIC and OneWest can be found here, on the FDIC website.  It’s all there, for the world to see!  They have it all layed out.  All of the formulas, worksheets, etc.

Now, it’s up to us to bring it to the attention of our elected officials and the media.  Enough is Enough!

Robert G. Hertzog

Phoenix Real Estate Consultant

The entire article can be found at  http://activerain.com/blogsview/1281177/is-the-fdic-killing-short-sales-.

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Comments (2)

Kylie Batt said on 20-04-2010

Вы попали в самую точку. В этом что-то есть и идея хорошая, поддерживаю….

I had been trying to get One West to honor my loan modification that Indymac had given me before they went belly up…..
Chris said on 16-07-2010

I am in this situation with the FDIC and a residential construction loan. We have reasonable offers to sell the property but the FDIC keeps turning their noses up at them. They act like they are going to be able to get market value for a home in the middle of construction with $100k worth of mechanics liens attached to it but yet they just sit on the property and won't foreclose. What can I do?

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