Is the short sale "bed too hard? Is it too soft? Why can't Realtors find a short sale that is "just right?"
I have always been amazed at how the real estate profession seems to be dominated by dinosaurs that refuse to evolve or let themselves become extinct. These folks seem to pass on some form of gene that has mutated even to the younger Gen Y agents who don't want to adapt to the current real estate climate, but rather, they want the current real estate climate to adapt to them.
Well, I for one am a chameleon. I can work through a tough market just as easily as I did in "easier" times when homes sold to the highest bidder and walk-in traffic to the office was non-stop each and every day.
So, I had to stand back and reflect a bit on the overload of blogs and comments on blogs about how awful it is to work with short sales and how lender A is the devil incarnate, and how the banks like to put the screws to Realtors over their commissions. It's all about me and nothing about the upside-down homeowner.
It's probably an understatement to say that banks and loan servicers were horribly unprepared for the housing market to collapse and for so many homeowners to default on their promissory notes. Lenders from all over the country got involved in the hysteria of granting home loans and equity lines on top of equity lines without taking a good look at common sense and risk-based lending practices. Many became geographically concentrated and many lenders are now out of business. Those lenders that survived were forced to pick up the pieces and try to salvage what they could from the rubble. The real estate industry, for the most part, has not been there to help, but instead has sat there like a vulture waiting for the next lender to collapse from the weight of all those broken pieces.
That's right, we as an industry have not tried to help the banks to pick up the pieces. We've only fought with them to make their lives more difficult. Instead of working with them to come up with better service models and best practices, we have individually criticized the entire mortgage industry for not doing enough.
On our side, we took the hungriest Realtors and made them "short sale specialists." The primadonna Realtors wouldn't dare dirty their hands with short sales, but instead chose to save their energy to be the loudest complainers about the system. The problem with taking the hungriest Realtors to do short sales is that as a group, they oversold themselves and instead of using their heads, they used their greed to build up mini 'empires" to preclude those of us who have developed through evolution into full-service loss mitigation specialists that have a solid "core" of legal, accounting, and mortgage lending professionals at our disposal, as well as exercising solid business acumen.
The short sale process got messy because we let the banks and services develop their own individual policies and procedures to solve their problems. In fact, most short sales with a single lender are successful, once the policies and procedures of the lender are adhered to by the Realtor. When the policies and procedures of multiple lenders conflict with one and the other, the short sale process becomes quite nightmarish. Instead of the NAR taking the time to address the short sale crisis with the banking and mortgage loan industry, we fought with the banks - often times to the detriment of our mutual client - the distressed homeowner.
In February, the US Treasury announced the Making Home Affordable (MHA) program, which promised to modify the way that lenders review and approve short sale transactions. (See my blog "Renavigating the Short Sale Waters - What You Should Know About MHA"). The new guidelines for approving short sale transactions under MHA are a positive step towards streamlining the approval process, the acceptable sales price and Realtor commissions. As of the end of September, 67 national loan servicers and lending institutions had registered with the Treasury to adopt the new MHA guidelines.
So, what have we as an industry done? Very little. However, the "little bears" of our industry have all started to run around with a rallying cry of "destroy the MHA guidelines, they won't help us sell the homes that we have listed." A non-Realtor friend of mine recently commented that we sound like a bunch of spoiled babies. We weren't consulted by the government, therefore, we don't want to play by their new rules.
But wait a minute. Weren't these same Realtors the ones that let the banks set up their own way of approving short sales and allowed their clients to make multiple offers on short sale properties, hoping that something would "stick"? Weren't these the same Realtors that had nothing good to say about Bank A, B and C because their short sale processes took too long? Weren't these the same Realtors that regularly complained that they wasted all their time and effort trying to get a home sold before the lender foreclosed on the property?
Sorry to tell you all. You can't have it both ways. I don't see too many lenders or servicers complaining about the new guidelines. I haven't seen any rational discussion from a servicer why they haven'tsigned on to the MHA program.
Is this just another example of the dinosaurs refusing to evolve? Or is it even more basic than that. Are we the Goldilocks of the industry? Do we have trouble finding a bed that is just right, because we are too busy finding those beds that are too soft or too hard?
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