It’s hard to imagine any silver lining in the dark clouds of the economic horizon. It would be gone already, stripped away by looters, melted down and sold for cash. When economic times get this rough, many are doing all
It’s hard to imagine any silver lining in the dark clouds of the economic horizon. It would be gone already, stripped away by looters, melted down and sold for cash. When economic times get this rough, many are doing all they can just to keep a roof over their heads.
More than a few Hawai‘i residents are losing that battle, as evidenced by recent reports saying foreclosures in the state tripled this October compared with the same month last year.
Could there be any good news here?
Vann Slatter, a Kaua‘i real estate agent with Century 21 All Islands in Kapa‘a, wouldn’t go so far as to say “good,” but he suggested there might be a bright side to all these foreclosures, if you know where to look.
A former litigation attorney, Slatter has been working in Kaua‘i real estate for four years.
Although he continues with his real estate business, he has recently stepped into a different role, serving as a liaison between lenders and homeowners at risk of foreclosure.
As a “home retention consultant” for Titanium Solutions, a Salt Lake City-based
homeowner contacting and counseling service, Slatter has been working with borrowers joining the ranks of homeowners forced to default on their loans.
According to Slatter, there has been a growing need for companies like Titanium, which are retained by a mortgage company that holds a loan in default and whose efforts to contact a borrower have failed.
The home retention consultant contacts the borrower directly to gather information and lay the groundwork for a “loan modification,” a new — and more affordable — loan arrangement with the lender.
Retention consultants are in demand, Slatter explained, because so many people entered loans whose initial rates were enticing but became less affordable later when the rates were adjusted upward. Some didn’t fully understand the loan specifics, and others were faced with unanticipated reductions of what, here on Kaua‘i, is often the pooled resources of an extended family.
“In one case I worked on, the daughter moved to the Mainland, which represented a loss of one-third of the household’s income, forcing them to get three months behind on their mortgage,” Slatter said.
He pointed out that foreclosures aren’t limited to new homeowners.
“It’s heartwrenching to sit down with a family with five children who’ve owned a home for sometimes two or three generations who borrowed against it heavily, lost their jobs, and are forced into foreclosure,” he said.
When asked if a conflict of interest existed given that, as a real estate agent, a failed attempt at a loan modification could lead to a new home listing for him, Slatter said the final decision is not up to him.
“I make contact with the borrower and gather information about their income and the current value of the house,” he said. “But whether or not they are candidates for a loan modification is determined solely by the loan institution.”
The bad news is that foreclosures are becoming so commonplace that Slatter is now sent on assignment on a weekly basis.
The not-so-bad news is that foreclosing a home is costly to the lender, which may give borrowers more leverage than they realize. Banks are currently so inundated with defaulted loans, Slatter said, that “they have been getting more liberal with the loan terms they’re ready to offer.”
“So if you get a letter from the lender, don’t throw it away,” Slatter added. “It may be an opportunity to open up a dialogue to negotiate for lower monthly payments.”
Bruce Savage, a Realtor associate with Makai Properties in Po‘ipu, said there may be one more silver lining in the increase in foreclosures and short sales in recent months.
“Some people who were previously priced out of the market may have an opportunity to buy a home for a lower price than just a few years ago,” said the 30-year Kaua‘i resident.
Renegotiated loan terms? More first-home buying opportunities? A silver lining, maybe not. More like copper, or stainless steel. But these days, you take what you can get.
• Luke Shanahan, business writer, can be reached at 245-3681 (ext. 251) or lshanahan@kauaipubco.com
