KPLU Local News
(2010-10-17)
Jesse Moore, co-founder of Pickett Street Properties at his office in Bothell, WA, with his box of "BPOs' or broker price opinions - far fewer requests for them are coming in since lenders started putting a freeze on foreclosures, Oct. 14, 2010.
Photo by Bellamy Pailthorp/KPLU
(KPLU) -
For many real estate agents, the recent concern about sloppy processing of foreclosures is adding insult to injury. Many have had to relearn their business to survive a housing market that's become complex and unpredictable. Now there's fear that more deals could fall through as lenders freeze transactions and states investigate banks for potential fraud. From member station KPLU in Seattle, Bellamy Pailthorp visits one real estate agency that's weathering the foreclosure flap.
Listen to Bellamy's report on NPR's Weekend Edition Sunday HERE.
Full Story:
At Pickett Street Properties, down the hall from a plush reception area, brokers are crammed into two small offices. Realtor Jesse Moore says nearly half of the properties Pickett Street handles are distressed.
"My role has become less fun, more emotional; I've become more of a counselor than a real estate agent."
At the moment, all of Moore's listings are bank-involved. Either they're short-sales or he's selling houses that have already gone through foreclosure and are owned by banks.
"And with the news that came out in the last few days and over the past week, with the suspensions of the foreclosure process, it definitely puts more mystery in this than I would hope for."
He says it's difficult for him to talk about this very openly. He's worried anything he says will scare away potential buyers when there are still plenty of great deals to be had. And so far, he says nothing in his office has actually fallen through. But he is seeing the effects of the freeze.
"So this is an example, this is a box, these are BPOs that I have done in the last two months," says Moore, as he rummages through some of the folders.
BPO's are "Broker Price Opinions" on distressed properties. They're commissioned by banks that are at some stage in the foreclosure process. Moore says, prior to the news breaking about Bank of America and other major lenders suspending their foreclosures, he was getting ten to fifteen BPO requests a day. "This week so far - and it's Thursday - I have one request." One of his partners, in the office next door, specializes in auctions. John McCants buys foreclosed homes on the courthouse steps every Friday. He says normally, there would be about 150 foreclosures out there. Right now there are half that. And he's considering only a handful as potential investments.
"It comes down to today, you know, I've got 3 or 4 houses, because of this news that came out in the last week or so," McCants says.
"I know it sounds kind of cruel to say let's get going with these foreclosures," says Jillayne Schlicke, who teaches mortgage lending law in the Puget Sound region. "But really, stopping the foreclosures is not going to be very healthy for our housing market."
She says the vast majority of people who have ended up in foreclosure aren't going to get to keep their houses because of mistakes in their documents.
"Massive lawsuits - there's no question about this," predicts Seattle real estate appraiser Richard Hagar. He says he's already getting calls from law firms looking for expert testimony. And it's not so much about helping people stay in their homes. It's about getting the banks to compensate those who've already lost them.
"And while they will not likely get their homes back, there is probably a very good chance that they will receive damages. And these damages may reach into the billions." Hagar adds, "It could be massive."
Back at Pickett Street Properties, Realtor Jesse Moore says he knows the processes at big banks need to be cleaned up. But he's hoping they don't take too long.
"if you examine this process too closely, and give people and give homeowners the perception that I can stop paying on my home and the bank can't take it back, that's dangerous."
He says they already have a squatter in one of their properties. And if you think selling a foreclosed house is difficult, try getting out from under a mansion with a family of unlawful tenants.
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