You've heard me talk before about how even when a homeowner is attempting to get a modification or complete a short sale banks will proceed with the foreclosure process.  It becomes a race against the clock for the homeowner, and us, if we are attempting to help with a short sale.  If they banks would just slow down and act responsibly they could cut their losses dramatically.

You've also heard me complain about how the right hand doesn't know what the left hand is doing.

Here is a good example that happened, or rather came to light, just the week before last.  We got a call from one of our sellers who we helped short sale his home so he could move on.  He had gotten some paperwork he didn't understand.  We asked him to fax it to us so we could see if we knew what it was.  It was a certificate of title conveying title to the VA Administration.  This was recorded at the end of April in the county public records months after title had transferred to the new buyer of the property.  This was also months after the bank had filed the satisfaction of mortgage releasing the property.

We immediately turned around and sent it to the closing attorney's who performed the closing.  We got a call a couple of days later from them telling us not to worry about a thing.  The title insurance company was working to straighten this out and they said that "they weren't surprised."  Apparantly they are used to banks doing this as it's common practice.

The closing attorney also called the clerk of court in the county where the property is located.  The clerk of court said that they wished this was the only case of this.  The employee in the clerk's office stated that the attorney's office (a foreclosure mill who does nothing but spit these things out) for this particular lender does this as a practice after the short sale has already taken place. 

We found out that a day or two after we alerted the closing attorney to this issue, the buyer had gone down to file for homestead exemption and found out that this problem existed with her title so she had called the closing attorney as well, not understanding what was going on.

Bottom line is that we have been assured that both the seller and buyer are okay in this and it's being cleared up, but why does this kind of thing even have to happen?

This is the kind of thing that someone needs to step in and stop.  The banks (in general) just continue to make bad decisions that keep leading them down the wrong path.  The path that leads to greater and greater losses.  But they aren't so worried about losses anymore...a sad fact that has been created by our political environment. 

The attorneys that have been hired to begin and complete a foreclosure process are determined to get these done as fast as possible no matter what negotiations may be going on between lender and homeowner regarding modifications or short sales...often cutting off the negotiation process when the bank could be saved hundreds of thousands of dollars (just with one home!!!) by going the route of common sense and good financial decision making rather than bullying.

As I was finishing this post my phone rang.  A seller for a recently completed short sale just received paperwork from an attorney's office for their old lender...foreclosure paperwork....this attorney's office has a court date to foreclose on the house that the seller no longer owns and the lender has released....here we go again!