Sept. 16, 2009

Who Else From The Bank Was on The Guest List?

House Party

Finance Barbie: Fake Currency Included

Party Dress & Yacht Sold Separately

Several days ago I was crossing the state in my car. While listening to the radio I overheard a report of senior vice president, banking executive who had “borrowed” a bank owned home in Malibu, California for her own personal use and entertainment.

On a daily basis real estate agents are hounding banks for answers to get inventory sold and absorbed. While they’re hammering the powers that be for answers and approvals, Executive Malibu Barbie was spending more time planning weekend parties at the beach front home than thinking of ways to streamline a short sale.

How did this sense of entitlement come to those in finance and on Wall Street? Besides exploiting loop holes and creating a stupendous disaster they’ve found ways to bonus themselves, plan vacations and throw parties in homes they’ve taken back from owners.

A neighbor of the bank owned home was interviewed and said, “It makes you wonder whether it isn't a bigger systemic issue in banking and Wall Street and the economy."

If you’re like me you’re thinking, “It just now makes you ‘wonder’ if there’s a bigger systemic issue in the banking industry?” Seriously?

Personally, I am still amazed that there has been this big of a systemic failure and absolutely no mandate to fix it or even a feeble attempt, just for show. There has still been no progress made for processing a short sale transaction or modifying a loan to keep a family in their home.

The banks have done nothing to evolve and the government, while passing out freshly printed stimulus currency, didn’t set any rules to motivate a bank to help distressed home owners. Not even to Malibu Barbie’s bank, which received about a $25 Billion, with a ‘B’, pile of stimulus money.

Maybe you’re lucky enough to be of means, employed or able to still afford your mortgage. Even if you aren’t struggling, this situation is affecting the property values in your neighborhood because it’s going on nearly everywhere, even Malibu.

It should interest you to know that there are plenty of people who are really struggling in Lee and Collier Counties. Right now, about seven-teen percent of the homes in southwest Florida real estate market are considered potential short sales.

Short sales are homes that are valued and sold at a price below the outstanding balance of the mortgage. In order to sell the home the bank must participate by forgiving a portion of the debt owed. For the most part, the process is painfully difficult and takes months to conclude due to the bureaucracy of the process and the blatant indifference of the bank.

It doesn’t matter if it’s a $20,000 or a $20,000,000 home, the struggle is the same. Even the original owners of the Malibu party home had buyers lined up for their home and the bank didn’t cooperate to help them sell.

The lack of cooperation proves the failure of the system on an enormous scale. While it could have simply been blatant indifference or a lack of organization I can’t help but wonder if maybe the bank wasn’t cooperating because they already had party invitations ordered.

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Real Life in Bonita Springs is a project by Chris Griffith dedicated to writing useful blog posts for consumers about the Bonita Springs, Florida area.  Find out what it is really like to live in Bonita Springs, Florida by reading about our fair city. You’ll get the latest in local real estate information, Bonita Springs real estate market reports and a little bit of humor.  If you have topic ideas, feel free to request a story about the idea, after all, this site is just for you.

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