Manhattan Real Estate Lawyer and Blogger Daniel Gershburg discusses problems with lenders
As a Manhattan Real Estate Lawyer I deal with real estate purchases in New York City on almost a daily basis. And as this recession and literal tanking in the real estate market has occurred across New York it is painfully obvious that lenders have absolutely no idea what they are doing. Now you may call this a rant, and you are justified in doing so, however I think its absolutely ridiculous to discuss an improving real estate market in the greater New York area without discussing what appears to be this general absurdness that comes with working with lenders these days.
Case in point. My client is selling a co-op apartment in Brooklyn. Again, she is SELLING the apartment in Brooklyn, not buying it. Weve found purchasers who are paying cash. We have a closing date. But we cannot close because the bank is unable to send us the stock and lease (analogous in some respects to a deed for a home). Weve called in approximately 10 times (not a typo) and have been on hold each time for approximately 30 minutes. Th bank cannot tell us why they cant send us the stock and lease and state that someone will get back to us within 24 hours or 2 weeks. Can you imagine if you called a friend and they said they would either get back to you later today, or Mid February. Unless this was your mother in law where youd be happy to wait the 2 weeks, you would not be pleased. We were not pleased. Also the bank cant communicate with the proper department because that department doesnt have phones. The dept has live people, and computers, but no phones. Again Id like to emphasize all we are currently looking to do is pay the bank lots of money but the bank is saying “We know, and wed love to take the money, but we cant take the money, we dont know why we cant take it, and we dont know when we could tell you why we cant take it, but someone may or may not be able to tell you why we cant take it within 2 weeks.”
On another closing, the bank appraised a home for a certain sum and said “Youre ok to close.” They then came back the following week and re-apraised the house for $50,000 less. Lets again use a real life example. I come to you and tell you Id like to buy your Mercedes, and that Id be willing to pay you $20,000 for the car and tell you I’d like to meet you the following week to pay you. You agree. The following week I show up announced and say “Let me look at the car again” and after looking at the identical car I tell you I will pay you $14.32 right now on the spot. Absurd no? Well folks welcome to 2010, the year when the recovery will hit.
In business, companies are always obsessed with bottom lines, and thats normal. However, when you’re looking to buy a home in New York City and the lender is telling you that they’re telling you that they dont have phones, there is something wrong. No business can recover financially if they are acting completely irrationally. You may be reading this and thinking that there is something more to the story. Something is missing because it doesnt make sense. I wish there was. Our firms Manhattan Real Estate practice has shifted in that we now do so much more on a daily basis for our clients than we ever have just to get them into the homes they wanted. There really should be no discussion of a bottoming of the market in New York City without discussing why we’re stuck here now in the first place.