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Update 08/05/11: It appears BB&T has heard the outcry and stopped the foreclosure proceedings. This is still an important lesson for everyone to learn.
Saji Mathew is facing an interesting situation: he wants to pay his mortgage, but BB&T Bank won’t let him. Saji owns a gas station in St. Petersburg Florida, and was one day late on his payment.
Now, BB&T won’t even accept the payment + late fees, in addition to the next few months paid ahead, they want Saji’s business.
It seems to defy all logic in today’s climate. With Millions of homes going into foreclosure, you’d think a bank would be happy that Saji wants to make right on his agreement, and his word.
We’ve provided our interview with Sanji above. We’re providing his store’s phone number at the bottom of this article if you would like to try to help, or give him some words of encouragement.
Strategic Foreclosure?
You’ve heard of “Strategic Defaults”, but have you ever heard of Strategic Foreclosures? Strategic Defaults occur when someone willingly walks away from a mortgage because they owe far more than the property is worth, and don’t want to keep pumping capital into it.
Before we dive into this topic, I want to establish my opinions on this subject. I don’t agree with strategic defaults. I understand why people do it, but a contract is a contract and you should honor your word. To be honest, I’m not necessarily a fan of government enforced mortgage adjustments either, because I believe a contract exists between the parties involved period.
If there are extenuating circumstances, such as the bank being deceptive, that is an entirely different story, but in general, I believe contracts should be left as they are, unless both parties agree to make changes.
Banks Whining About Strategic Defaults
We’ve all heard the banks crying about how unfair strategic defaults are. I agree, strategic defaults are unfair, and there is little protection in place for banks. I think strategic defaults are very damaging to the system we have in place. What I dislike however is the double talk we seem to seeing.
Banks And Their Double Speak
Banks don’t like strategic defaults, but it seems that they don’t have much problem with strategic foreclosures. If you haven’t listened to our interview, then you should! There is no logical explanation for Saji’s predicament, other than the bank has other plans in mind.
There’s no logical reason a bank would want a foreclosure if they couldn’t turn a profit from it. Of course, BB&T wasn’t willing to comment for this article.
Mobil Station In St. Pete foreclosure
He tried to pay the next day, and he got the runaround. He has even tried to pay the next few months ahead, yet still they continue the foreclosure process. It is going to court in December, but this has all the telltale makings of a Strategic Foreclosure.
He took the mortgage out in 2009, and had made payments since. If you’re at all familiar with the way a mortgage looks on a graph, you pay a lot of interest up front. It’s like that with any loan. So, why would the bank want to foreclose? Here are some reasons:
- The Property might be worth more than it was mortgaged for (this is doubtful in today’s climate).
- They might be able to collect some collateral.
- At the very least, they can foreclose, re-sell, and enjoy the two years of nearly pure profit they earned off of the $504,000 they lent out.
- Maybe someone else wants the location, and they’re willing to pay big for it? Saji hints at this as he has had many inquiries in the past, and this is what I figured the most likely (and profitable) reason to be.
Whatever the reason, it isn’t a good one. The bank and Saji have made an agreement, and he is trying to stick to it. So should BB&T.
Phone Number To Saji’s Mobil Gas Station: 727-392-6246
A special thanks to Saji for the interview, and DanoSongs.com for the music.
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