I am working with a client who is struggling both emotionally and financially with selling a home.  Like so many other homeowners, she was a victim of real estate predators and fell into a straw loan type deal.  We do have a wonderful contract on her home that is expected to close this week or next week, but when we got the payoff information, we found one of her lenders in the trifecta of lender nastiness stuck her with a huge prepayment penalty. 

We are hoping to negotiate the penalty away, but her title officer told me today that the company is on what’s called The Implode List.  This is a listing of lenders who have stopped lending money since late 2006 and her lender unfortunately made the list.  Because the company is in trouble, we are not very hopeful they’ll be willing to negotiate.

There are some pretty surprising names on the list – Allstate Mortgage, Lehman Brothers, Wells Fargo (non prime division), Aegis, Trump Mortgage.  You’ll definitely want to bookmark and keep an eye on the list if you’re a Realtor, a buyer, or a seller because if you think you’re closing on a home and your underwriter shows up, you probably won’t close.  The Bank Lawyer’s Blog is keeping tabs on the list also and has interesting thoughts on working out solutions.

According to our favorite "Implode-O-Meter," BNC isn’t "closing," it’s "closed." That must make the "process of trying to work out a solution" very challenging, indeed.

Not to sound like Chicken Little trumpeting the falling sky, be careful out there folks.  Don’t be paranoid, but be careful.