NAR Supports Bill in Congress Proposing Short Sale Speed-Up…When Will Everyone Learn?

Okay, so has no one learned yet that the government is not the place to turn for positive effects on the housing crisis?  Seriously, we have now been through a couple of years of highly ineffective programs.  More votes, more bills, more directives….yada yada yada…are not going to fix our housing mess.
Apparently NAR and Congressional Representatives Robert Andrew and Tom Rooney, have not been kept up to speed.   They are trying to push HR 6133, “Prompt Decision for Qualification of Short Sale Act 2010” through Congress.  The Bill would require lenders to provide a response to short sale requests within 45 days.
I have to give the guys props for “caring” about speeding up the short sale process.  I just don’t appreciate more tax dollars being spent to create, manage, and watch-dog a program that will be as lackluster as MHA’s HAMP and HAFA and not to mention the many other programs hanging out there.
Do I think lenders need to speed up their short sale review?  Of course I do.   I get as frustrated as anyone when a lender does not move efficiently to provide a short sale offer response.
According to data released by NAR, the number of properties on the market that are listed as potential short sales is rising.  In Grand Rapids, MI it is increasing like most markets in Michigan and across the nation.
Lengthy lender response times make short sales a MLS pariah.  Buyers hate to wait through the process and worse often avoid them.  Housing recovery will only come through an increase in sales.  If one quarter to one third of available listings are truly short sales, then buyers need to be given some assurance the short sale process will move along quickly to get those properties off the market.  Of course, our omnipotent government has the answer.
Whoa….stop the presses.
As much as I must agree with our Congressional Representatives and with NAR that the lenders need to get moving.  I must also point out some other obvious flaws to timely short sale approval that are simply the fault of un-proactive homeowners, untruthful homeowners, and inexperienced agents.
If it walks like a duck, don’t tell people it’s a horse.  (huh??)    The number one reason that buyers bail on a short sale offer is not the lender’s slow response time.  There are two main reasons that go hand in hand.  One, no one set proper expectations with the buyer about the process.  Two, no one screened for a buyer that would best meet the terms of the transaction.  What do I mean by terms?  They understand the time-frame and have no issues with financing or liquidity to meet the final approval.
To properly vest a buyer to a short sale, an agent should know their lender profiles or work with a third party short sale facilitator that knows how to look at the lenders, number of liens, seller financial issues, and investors behind the note, to analyze and predict the best course of action.
In our personal listings we have a high buyer ‘vest’ rate.  We analyze the deal ahead of marketing and then spend time screening for a buyer that will ‘stick’ to the end of the process.
Should the HR 6133 Bill pass Congress, we can all hope the lenders actually jump to follow its requirements.  No different than other programs, most lenders will be provided too many loop-holes and will not comply.  What desperately underwater homeowners need are highly trained short sale professionals, not more legislation.   You may visit our website for more information.
To Your Success!
Rapid Real Estate Solutions
Donna Tashjian with help from Short Sale Daily News
http://www.RRES-ManageMyShortSale.com

Homeownership in REO's versus Short Sales?

Okay, so I have driven into the ground a hundred times the issue around home ownership in a REO versus a short sale. But, today I have had to do it again twice.
Please people….It is simple. In a short sale, the homeowner owns the home until closing. The bank does not own the home, but has to allow (approve) receiving a net less than they are owed. In a REO, the lender has foreclosed and taken title. In a REO, the bank owns the home…the bank is the seller.
Buyers are the worse for expecting an offer made on a short sale to be submitted to the lender for review whether or not the seller has already accepted an offer. Newsflash, the seller will be shown all offers made on a listing because they own the home. However, once they accept an offer, only the accepted offer is sent to the lender for review for short sale approval because the lender does not own the home.
If a buyer presents an offer at the same time that other offers have been presented, and no offer has yet been accepted, then we are in a multiple offer situation. A multiple offer situation with a short sale is handled no different than in a standard retail sale. The seller chooses the offer to accept. The offer accepted on a short sale listing is the one sent to the lender. It is on the agents to make sure everyone understands this.
This is important to remember in short sale transactions.  As always Rapid Real Estate Solutions helps to simplify the short sale process.  Our helpful website is  www.RRES-ManageMyShortSale.com
To Your Success!

Is the Short Sales End in Sight?

Now is the time to build your short sale business more than ever. Why? Short Sales are NOT going anywhere for a long time to come. As agents, over 50% of your potential closings will likely include a short sale transaction. As investors, a short sale offers more control of the discount process than an REO buy. As investors and agents who have also optimized your business with added income streams through working with loss mitigation for real estate professionals, the next two years will be the catalyst for immense growth.

According to recent reports, there are nearly 2.4 million prime loan Borrowers across the U.S. that are seriously delinquent on their mortgages. According to the Center for Responsible Lending, there are 9 million homeowners predicted to go to foreclosure between the start of 2009 and the end of 2012. Realtytrac predicts 3 million foreclosure filings by the end of 2010 and over 1 million bank repossessions.

RealtyTrac just reported that residential foreclosures fell in the first half of 2010 by 5% from the last half of 2009, but only because the percentage of lender APPROVED short sales and loan modification applications went up during the same time period. Despite this perceived decrease in foreclosures, the total number of properties up for foreclosure for the first half of 2010 is 8% higher than the first half of 2009.

Last month, June 2010, was the 16^th straight month that foreclosure filings exceeded 300,000. Since the beginning of the year there have been over 1.9 million foreclosure filings.
The 10 states with the highest rates of housing units receiving at least one foreclosure filing in 12 months: Nevada at nearly 6% of housing units, Arizona at 3.36% of housing units, Florida at 3.15%, California at 2.54%, Utah at 1.91%, Georgia at 1.79%, Michigan at 1.73%, Idaho at 1.68%, Illinois at 1.61%, and Colorado at 1.4%.

With unemployment still hovering in a bad place and consumer and business confidence still on shaky legs, housing prices will not regain and more and more borrowers will remain with few options should they ‘must’ sell.

Borrowers who do not qualify for a loan modification or other repayment option when in default should always weigh the benefits of a short sale before allowing foreclosure.

As real estate professionals, it is our job and advantageous for our business to educate consumers in our area about their options. The more consumers deem you a credible authority the more homeowners will turn to you when they need to sell.

NOW IS THE TIME to work with a loss mitigation company and help more people. Short sales are a means to income for a long time coming!

To Your Success!
excerpts from Short Sale Daily News