I worked to help her do a short sale to avoid foreclosure. When we sent in the contract, People’s First told me they “do NOT do short sales, period”.  I called them and reiterated the diagnosis of kidney cancer, wondering how this woman could keep up with her payments.  I also asked, “Why would your company not consider a short sale in this economy?” I was told they had “not given any subprime loans, they were well-capitalized, and when they lent money, they expected to get it paid back”.  I said, “So you’d rather foreclose?”  They said “Yes”. When I told them I would write about the story in my blog, they warned me not to.

Today it was announced that the federal Office of Thrift Supervision has closed People’s First.  A few weeks ago the bank was notified by OTS for Prompt Corrective Action because they were deemed “significantly undercapitalized”.   Basically, a bank’s capitalization rating has to do with its percentage of capital, like cash, as compared to its risk-based assets, such as mortgage loans. According to the FDIC: ”Well Capitalized” means a total risk-based capital equal to or greater than 10 percent, “Adequately Capitalized”  is a risk-based capitalo ratio equal to or greater than 8 percent.  People’s First capital ratio has been reported at 2.55.

My question is, could Peoples First’s policy of refusing any short sale been part of its downfall?  If the bank insisted on foreclosing and repossessing properties, wouldn’t that have added to its risk-based assets?  If they had allowed short sales, wouldn’t their percentage of risk-based assets have been decreased?
Finally, wouldn’t allowing short sales have helped them live up to their motto, “The Best Bank in the Neighborhood”?

It’s Wendy!

Wendy Rulnick, Broker, CRP, CRS, GRI, ABR     Rulnick Realty, Inc.

Destin FL Real Estate

Destin Short Sales & Pre Foreclosure Help.

Read Wendy’s Destin Real Estate Blog

www.ShortSaleSuperStars.com for Realtors

 Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Email Wendy: itswendy@rulnickrealty.com

The post Feds Shut Down Peoples First Bank – Was Denying All Short Sales Part of Its Demise? first appeared on Rulnick Realty.

My seller’s husband has just been diagnosed with kidney cancer, age 36.  She herself has lost about half of her income in the past year, as assistant to a financial advisor and another part time job.  Her charge card balance is around $60,000 – she used credit to keep making mortgage payments. She has struggled to make the interest-only payments on the lot – around $800 a month- as her partner, a real estate agent, has little income to contribute.

When my seller found out about her husband’s kidney cancer about a month ago, she stopped payment on the check she had sent to the bank. Peoples First called her when they received notice and left a voicemail message that the manager would be “furious” and would start foreclosing.

Today, Peoples First just told me they will NOT do a short sale, period.  When I talked to them I mentioned the diagnosis of kidney cancer, wondering how this woman could keep up with her payments.  I also  asked, “Why would your company not consider a short sale in this economy?”  I was told they had “not given any subprime loans, they were well-capitalized, and when they lent money, they expected to get it paid back“.  I said, “So you’d rather foreclose?”  They said “Yes”.

I then got a call from another party at the bank, who reiterated they don’t do short sales.   I mentioned I would write about the situation in my national blog.  I was told “I caution you not to do that.”

Well, guess what?  I am writing about it.

The post Peoples First Denies Short Sale – Despite Cancer Diagnosis first appeared on Rulnick Realty.