Foreclosures are a problem in the Eugene/Springfield market because they are bringing the value of other homes down when they sell for less than market value. They are a problem for the neighborhoods because they are often left to deteriorate during the foreclosure process and sometimes left vacant for days or weeks or months. Now, I have encountered a new problem having to do with buying one….getting them closed.

First of all, let me explain to those that are not aware of how things work in the lending world about locks. Most people lock their interest rate at the beginning of the loan process. That is the safest and most often the most efficient way of doing things. At the time of the lock, you need to determine how long the lock will be for because there are different costs associated with locks, i.e., a 15 day lock is less expensive than a 30 day lock which is less expensive than a 45 day lock.

Normally, that means we need to figure out how long it will take to gather the income and asset documents, get an appraisal, receive and review the title report, have the file underwritten, satisfy conditions, schedule signing, have the documents reviewed and fund the loan. I am proud to say that at Alpine Mortgage Planning, this is normally done in 30 days or less so we are able to offer 30 day locks and close in the required time frame.

However, I just encountered a new twist having to do with a foreclosure that was owned by Freddie Mac and after talking to other loan officers, they have had similar problems with Fannie Mae owned properties. One of the problems encountered here has to do with the title report. Sometimes the lender may not be listed as the owner on the title report for anywhere from a few days to a few weeks after foreclosure. If they aren’t, legally, they can’t sell the property, so you can see that closing on one is impossible. Title reports that should take a few days may take a month or more greatly slowing down the process. But, even when that isn’t a problem, closing can be delayed indefinitely because the lender is too busy or too inefficient to get the transfer documents back to the title company after the buyer signs documents and pays their down payment.

This is from my escrow officer on my recent transaction:

I have contacted the seller and even had my regional management involved to get Freddie Mac to stop holding up funding. I am trying to fund files where buyers signed before the 18^th!!  …… I am trying to do the best I can to contact people, but spend most of my day harassing the sellers to get me things I need for closing files.

So, what is the problem. We keep hearing that the banks are overrun with foreclosures and they don’t have the people to handle things. Well, we have a pretty huge number of unemployed people, how about hiring some of them. I know there are a lot of former Realtors and Loan Officers that would be happy to be making an income, how about some of them?

Also, just so you know, this particular file is signed now and is supposed to fund tomorrow. We went past the original lock date and the lock had to be extended three times. I paid for the extensions, my client didn’t. I think it is the mark of a professional that they take responsibility for making sure everything is right for the client. If you need that sort of professional service, please contact me at Alpine Mortgage Planning, 1200 Executive Pkwy., Ste. 100, Eugene OR 97401, 541-342-7576/541-221-3455 cell or by e-mail. Although, in today’s market, it may not be the easiest thing to get done, I promise we will deliver on our part to you.