Thursday November 10, 2009 I attended the FDIC Vendor Conference in Los Angeles to listen to some of the most important Government vendors (professional services providers) on the planet. In the 1990s the FDIC had a staff of approximately 23,000 people to solve the last economic crisis but this time around they have changed the business model and are contracting with large accounting firms to aid in the closing of banks and liquidating assets. Clearly this is a plan to avoid expanding government on a permanent basis by contracting companies to handle the crisis.
The issue of concern and interest to the approximately 250 invited Residential Real Estate Brokers from the western states is how the FDIC will dispose of the homes that become government-owned properties. I will say that rumor on the floor among brokers was rampant but a clear direction was not announced. What was announced was that next year 2010 approximately 400 Banks will be closed ,so what I had heard as a Wall Street Journal and CNN rumored reports became a real story for me, I saw it on the FDIC Power Point Presentation, with hundreds of other people.
The Brokers speculated on information provided by informed sources that more asset management companies will be hired by the FDIC to aid with disposing of homes. Clearly the housing problems are apparent to the FDIC. They do not have their heads in the sand. They may feel like they are running in quick sand but they see the situation, as do attorneys and accounting professionals that are members of our communities and are being hired to help. I strongly sensed they want to protect our country, these are not people without faces and hearts.
I was able to have about a 20 minute discussion with the head accountant that closed one San Diego Bank and he said he did all he could to make sure the transition to the new bank was as smooth as possible and fought to save jobs. This was not hollow talk this was a man with great respect and reverence for the situation, the people and the life savings that were involved.
I will say the professional accountants did express a need for a more unified approach by the different agencies. Many of the Brokers asked which conflicting report to believe as it has been reported the Obama Administration has said “loosen up the money and start lending” and at the same time , yesterday before the conference FHA announced they wanted to increase the down payment requirement for loans from 3.5% to 5% ,and just a few days earlier Realtors were notified that expense ratios for loans from Fannie Mae were going to get tighter, and thus loans were going to become harder to obtain. To real estate professionals this is clearly a conflicting policy and thus illogical.
There was discussion about the ” Making Homes Affordable” and the Treasury “Foreclosure Alternative Program” but they were all unofficial. It appears Short Sales are going to be the approach if at all possible even for the FDIC but that is far from being written policy I can find. I encourage anyone that is currently in default to read these programs. Everything is in flux, things are changing daily and I promise to do my best to keep the blog readers informed with the links to the Government Programs and Media articles that could affect us. The entire Short Sale Nurse Staff is always ready to consult with anyone facing a short sale or foreclosure situation free of charge. There are solutions and everyday more options are presenting them self. There is Hope NOW!.
This article was written by George Kenner, Keller Williams Realty Lic. 01229951.
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