Get your handkerchief because this will make you cry

I am a simple guy trying to work hard and get through this difficult time. I work in a world that I would currently call Bizarro World, and that is because I work with the banking industry. Right now, this is an industry that is making huge profits from free money, aka TARP funds, that our government is giving out under the assumption that the banks will loan money and keep people in their homes. My role is to help people navigate the land mines of loan modifications and short sales. In the real world, if money is given out, there are expectations. In Bizarro World this is just not the case! Let me give you some examples...

Example 1: B of A, the largest recipient of TARP funds (taxpayers’ money). I have worked on hundreds of files with them and I am amazed that even when state laws say there is no way for them to come after homeowners that foreclose, they still insist that if they approve a short sale that nets them more money than a foreclosure, they still will not release the client from the deficiency. Huh? Real World = More money good. This is clearly Bizarro World.

Example 2: Washington Mutual. I had an approved short sale scheduled to close October 16th, purchase price $445k. Washington Mutual foreclosed and sold the property for $305k. The investor called me up and he sold it to the buyer. That's 140k less, why would you do that!?! Real World = Bad for bank. Bizarro World = Good for bank

Example 3 is the worst of all: The FDIC sold IndyMac to a group of Wall Street insider billionaires like George Soros and Michael Dell, and in the Real World the terms for the purchase were unbelievable. Let me put it in terms like this: Let's say I am a gambler and the casino said “Ok Nick, gamble a million with us, and if you win, you keep all the profits, but if you lose this is what we will do: The first $200k you lose we will give all of that money back, the next $100k we will give you back 80% and after that we will give you 95% of your money back if you lose. The worst of it is if you are a homeowner trying to do a loan mod with IndyMac, what would be the incentive for them to approve you? They make more money if you default. Wow!


The FDIC Fact Sheet states:
“The FDIC has agreed to share losses on a portfolio of qualifying loans with New IndyMac assuming the first 20% of losses after which the FDIC will share losses 80/20 for the next 10% of losses and 95/5 thereafter.”


If I read this right…Uncle Sam takes on 100% of the first 20% of loan losses, then takes 80% of the next 10% and finally takes 95% of any and all losses after that.

It’s times like these when I wish to live in the real world again.