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BANKERS.... ARE YOU LISTENING? YOUR FORECLOSURE & SHORT SALE PROCESSES ARE BROKEN!

By Bradenton, Sarasota, Real Estate ~ The Serena Group

Real Estate Agent with Bradenton-Homes, Experts - Keller Williams Realty

May 06, 2009 02:57 PM

short sale jungle Just like a lot of other Real Estate professionals... REALTORS, Title Companies, etc. , we have been trying to do the impossible! To successfully negotiate through the jungle that is known as the banking "short sale process" towards a merciful end for our clients and to produce revenue for our real estate business... not to mention helping to clear the glut of short sales & foreclosures that are choking our Real Estate market and preventing it from stabilizing and becoming healthy again! We can EVEN help the banks get what THEY want.... more money for toxic assets and smaller deficiencies!

The problem is that we are working with a BROKEN BANKING SYSTEM where common sense and logic play no part!

We patiently plod along, with our clients in tow, through the maze of paperwork, the never ending phone short sale mystery calls, difficult negotiations, heart wrenching details.... thinking that we are getting close to accomplishing a win-win situation for all under the most dire of circumstances.... then.... WHAM!... a bank negotiator that we've established a rapport and open line of communication with, (after painstaking patience & diligence on our part) leaves, gets laid off, falls off the face of the earth... WHO KNOWS WHERE THEY GO! No one ever seems to know or care! The file goes into "Short Sale Limbo Land" and is reassigned... to who? They never call with that information!.... the only way to find that out is solve the mystery that becomes..."Short Sale, Short Sale....Who's got the Short Sale File?" ...OR...

toxic assets We plod along trying to keep a buyer loyal to "THE TRANSACTION FROM HELL" forging through months of empty deadline promises, ignored phone messages, stubborn INVESTORS that say "NO" to a perfectly fair offer (supported by comps & market statistics, I might add!), extensions because of delays that really shouldn't be necessary, and "missing" workout negotiators that get replaced by "mystery" negotiators that don't identify themselves but wait for you to find THEM! The transaction drags on for so long that: the buyer walks, the property owner loses precious time before foreclosure is eminent, AND the banks lose perfectly good deals that most certainly would put more money in their pockets than they will ultimately get with another offer which will clog their systems even more and produce less revenue and cause larger deficiencies! These "toxic" assets then continue to compete with normal home sales and continue to drive down everyone's property values and belabor the recovery period.

Might I add... that most Real Estate deals today are short sales and foreclosures and this "BROKEN BANKING SYSTEM" is preventing us, as REALTORS, from enjoying our CONSTITUTIONAL RIGHT TO MAKE A LIVING!

Has the banking industry asked us for our suggestions or put together a panel of experts in the REAL ESTATE INDUSTRY to aid them in fixing their systems? WHY NOT? Is there some advantage to them to continue on with this devastating course of events?

Lots of questions and opinions... but no conclusive answers.

BANKERS ARE YOU LISTENING? BANKERS...ARE YOU LISTENING?

BRADENTON REALTOR

www.TheSerenaGroup.com

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Bradenton, Sarasota, Real Estate ~ The Serena Group

Bradenton-Homes, Experts - Keller Williams Realty - Bradenton, FL

Selling Real Life Dreams in Paradise!

WOW! Thank you to all of you who took the time to comment on my blog post today! I have been in meetings all day today, and I apologize for not being able to reply in a more timely manner. I am impressed with the passion, keen observations, and professional critiques and comments that you have all been gracious and generous enough to share with all of us!

Just the sheer volume of information posted in your comments and the frustration and passion with which all of you have expressed your opinions suggests to me that we.... all of us.... have identified a need.... have ideas on how to improve the situation... and have the experience and expertise needed to effect changes needed in order to streamline and improve the short sale and foreclosure processes.

I can see that most of us agree with the statement: The system is broken and desperately needs and overhaul! It is important to not only vent our frustrations, spend our days devising work arounds to deal with inefficiencies and weak links in the process, but to form an alliance to help change a system that is ultimately hurting everyone involved.... clients, bankers, REALTORS, and our country and economy!

What do you say? I am suggesting that we...together.... author a petition & letter with our observations and useful, detailed suggestions.... circulate it in our various Real Estate Markets of our peers for signatures and then present it to the proper national governmental authority demanding attention and action! Is anyone interested in taking that challenge with me?

I am very convinced, especially after today... that not only is action needed... but it's the ONLY way to deal with this issue to get it resolved. Remember... and I HATE to even mention this because we haven't even finished this page in history... but this very situation can repeat itself in decades... years to come. If we do nothing.... we will have to deal with this BROKEN system again someday!! I hope not in my lifetime... Ha!

PS... I will pick away at and answer ALL of your comments... please be patient with me :) and thanks so much, again, for taking time to care and comment... bradenton realtor

www.TheSerenaGroup.co m

May 07, 2009 08:40 AM

Anonymous

Clark Blackwell, community banker

Wendy, What a great post!

You've obviously hit many nerves, and I apologize in advance if I repeat something another banker may have already said. Here goes: Paraphrasing one of the other responses, "The problem is the lack of personal contact and we need to return to small businesses dealing with community bankers." You're dealing with monolithic, soul-less entities that we (including myself) created and eagerly sustained by continuing to feed the beast "liar loans" long after we all realized we were contributing deck after soiled deck to what was becoming an increasingly rickety house of cards.

For the record, though we enjoyed the dubious distinction of having been "qualified", my bank (Crescent Bank of Jasper, GA) will not accept a dime of TARP money. That's not to say that we couldn't use a healthy infusion of capital. Just prefer to keep Obama/Reid/Pelosi off the Board as long as humanly possible. . .

Back on subject, an AR Realtor posed the question to me last week of whether a lender is entitled to collect on PMI following a short sale. The answer is "no" and the logic behind it goes a long way toward addressing the issue you raised. When you boil it all down, when a lender accepts a short sale offer, they are voluntarily de-valuing both their asset (the loan itself) as well as the underlying asset (the real estate which serves as collateral, aka secondary repayment source). Therefore, the lender inherently forfeits the right to collect on the PMI. Then, there's the issue of "recourse", which means the lender customarily reserves the right to seek a judgment against the borrower's remaining assets in order to ultimately collect the "short" (deficiency balance). If the lender agrees to a NON-RECOURSE short sale (as hard as I've tried, I really can't think of a situation in which I'd ever consider doing this), there is a conscious and well-considered reason for forfeiting the right to collect a deficiency balance, which brings up other potential legal arguments.

Taking off my outhouse lawyer hat, this is uncharted ground for ALL of us. Regardless of who ultimately created the monster (start with CRA legislation, which goes back several decades), a tremendous number of people who have become homeowners over the past 10 years never had either the capacity or the ability to continue to do so. As I've blogged before, it all goes back to a lack of skin in the game.

In 21 years of community banking, I have never been down this road before, and many of my colleagues have not done so in 30 or 40 years in the business. As always, a big dollop of empathy between realtors & bankers will go a long, long way.

May 07, 2009 08:57 AM

#63

Kerry Jenkins

Prime Properties - Crestline, CA

THey will continue to do what they want, since they are butt-hurt about us keeping them out of our industry, so this is their way of getting us back. You're beating a dead drum...We have to try our hardest with each of these we get, and do what we can, but they won't change if they're allowed to continue doing business in the way they want. I agree, they should listen to us, since we are the ones on the front lines, not them, and why someone wouldn't listen to say a lance corporal on the front lines over a colonel who hasn't seen action for decades wouldn't make much sense either! If all of us Realtors(and NAR, OUR lobby) would take these complaints to the government, maybe they would finally get how to TRULY help people! Cause sinking billions into these banks certainly ISN"T helping, and never will if they're allowed to conduct business this way!

May 07, 2009 09:04 AM

Anonymous

Barry Bridges

First of all no they are not listening. Why should they? We keep selling their product no matter what they do to us so why should they change? The only way they are going to change is if they start choking on their inventory. I know you think they are but if that were really true they would change. You see everyone has their choking point where they change their behavior. They have not gotten there yet so if you choose to play their game they will continue.

Why have they not asked for professional help? Have you ever met a banker who didn't already know it all?

May 07, 2009 09:26 AM

#65

Renée Donohue~Home Photography

Savvy Home Pix - Allegan, MI

Western Michigan Real Estate Photographer

:bowing to you: Amen.

I am asking people with exceptional posts (LIKE THIS) to print it off - including REMARKS, put a link on it and SEND it to every congressperson and representative you can think of. Especially the ones who have high roles in the banking committees PLUS the major banks and institutions. They lose so much money over stupidity.

May 07, 2009 09:29 AM

Lee Ali

Las Americas Real Estate - Fairfield, CT

Wendy, the ONLY way REALTORS can help avoid the next boom/bust is by serving the real clients, that is, buyers and end-financiers and not the psuedo clients, that is, sellers, and psuedo-allys, that is, banks.

My book goes in the gory details of how booms and busts in real estate can be avoided.

The real estate landscape is changing by the minute. REALTORS can choose if they want to be on the sellers'/banks' side or the buyers'/financiers' side.

May 07, 2009 09:29 AM

Anonymous

Jon C. Mumford

Wow, I totally agree-the system is totally broken. I have a short sale that just passed the 12 month mark. We have the third offer submitted, higher than the first 2 submitted 12 and 8 months ago and 12 months to the day I got a denial-first not willing to pay the second what they were requesting-after having that 3rd file for 4 months!!! Average sales price for condos is down 45% from last year-common sense doesn't apply here...I totally understand.

May 07, 2009 10:31 AM

#68

Beth Kellan

Windermere/Cronin & Caplan Realty Group Inc. - Portland, OR

(Formerly Proctor), Portland, OR

Wendy, you took the exact words my collegues and I were lamenting this very morning. There is no common sense or logic to this. There seems to be no buisness sense in this system at all. I have tried to brainstorm about how to change this...I would like to join your efforts...lead the way my dear!

May 07, 2009 10:32 AM

Libby Offnick

RE/MAX Executive Realty - Mooresville, NC

ABR, e-PRO, SPS

I don't think there is enough glue to put the short sale "HUMPTY DUMPTY" back together again.

May 07, 2009 10:40 AM

Bradenton, Sarasota, Real Estate ~ The Serena Group

Bradenton-Homes, Experts - Keller Williams Realty - Bradenton, FL

Selling Real Life Dreams in Paradise!

David (sorry I missed you the first time!) - Yes.. money does relieve them of taking proper and immediate responsibility but the money tree will lose all of it's leaves eventually. Even the bankers know there's an end to that short term fix!

Shane - my point exactly... there IS strenth in numbers but only if we decide to use it!

Monika - yes the name is totally ironic, isn't it! Don't make yourself cry by figuring out your $ per hour pay rate on these transactions ;)

Renee - we do have a voice... either no one is listening.... or WE'RE NOT SPEAKING LOUD ENOUGH! :)

Joan - Wow! what a picturesque description of the perfect example! Why not, indeed! I don't get it either... I guess not only do the banks need help with their short sale processes, but they need to take courses in property management as well! LOL!

Jon - since you posted 3 comments, I can see that you have strong opinions here and some keen observations! I don't really think that anyone is speaking to the topic: "Are our clients entitled to a short sale". Additionally, I don't think that the majority of REALTORS would counsel their clients with that mentality flavoring the advice. No professional feels, in my opinion, that "Screwing anybody" is a good business practice! What we are all concerned with is a process... that we all have to navigate our way through... that is archaic and downright inefficient! As REALTORS, we have a fiduciary duty to first qualify our clients before we list their home for "Short Sale" and then make the process as brief and stress-free as possible. NOT POSSIBLE in a lot of cases...reasons that it's not possible... out of our hands!! THIS we must address and help come up with a better system! By the way... when the banks lended the money in the first place, in a lot of cases, (SUB PRIME LOANS... buzz word again!) they knew full well that there was a huge chance that a lot of these loans would fail! In essence... they knew that they would end up taking less and still did the loans!! more question marks!!!

I don't think that anyone feels that a person is "entitled" to use bad judgement... get themselves in debt.... and walk away scot-free! (except for the BANKS, of course!) Most people affected by foreclosure & short sale are responsible people who have either lost jobs, endured health catastrophes, or numerous other hardships that , thank God, a lot of us are blessed not to have endured! I WANT TO HELP THEM... so do a lot of others like me. I am definately NOT ashamed of that! Yes, we all agree that there has to be a system of handling these transactions.... we also (most of us!) agree that the system in place, currently, is not effective for anyone! Pain is definately a part of this process.... I don't think that we are engaging in "cheap bashing" here. There have been a multitude of great comments and observations that we can all relate to and learn from. The comment about "a constitutional right to earn a living" was written "tongue in cheek!" Sorry that you didn't find it amusing... As for the comments... I think that if the public reads these comments, they will come to the exact OPPOSITE conclusion that you are suggesting that they would come to... I think that they would be surprised to hear how hard we work... how much we care... and how committed we are to our profession!!!

Lana - it's happening almost everywhere!

Todd - maybe they will listen... if the message is loud & clear... and we speak with respect and professionalism.

Karen Anne - perhaps the people that we speak directly to (bank reps) have to disconnect themselves from their jobs while doing them in an obviously unorganized, inefficient system to preserve their own sanity. Maybe we would also be helping them by approaching their bosses with a movement for change! After all... they are doing their jobs only with the tools and authority that are given to them by the powers that be in the banking system.

Nestor & Katerina - Again... sorry that you didn't find my comment about "constitutional right to make a living" amusing... although I think it's an amendment that would be interesting to execute! I wholeheartedly agree that we, as REALTORS, have the responsibility to educate ourselves and set up our own systems to service our clients needs in an effective, efficient, and professional way. The bad apples that are practicing real estate in our own industry don't excuse the widespread issues with the "BROKEN BANKING SYSTEM" in my opinion, however. Two wrongs don't make a right... and aren't we supposed to rise to the highest standards, not compare ourselves to the bottom of the pile? It sounds like you have your systems in place, operate in a professional manner, and have forged great relationships with lenders that you do business with.... hats off to agents like you... you are the ones that should help us find our voice to improve rather than just "deal with" a broken short sale process. Are you up for it?

Christine - You get it!! HA! I think you are right on when you say that the negotiators are frustrated as well. Obviously they could use a hand improving their own systems.... even if they haven't asked us for one!

Debbie - so many little lambs like you... I'm one too! We feel frustrated following someone (or someones!) who don't have a clue where they are going.... or a map to get there! Again, I say, we can do something about it... let's do!

Rita - WOW! I did not know what a "forencic audit" was... but I do now here's a link to an explanation for anyone who, like me, needs one!

http://www.modificationzoom.com/forensic-loan-audit-successful-loan-modification

I think there is another post here! Very powerful information....thanks for the education! This would certainly help us hold THEM accountable!

Christianne - again...another PERFECT example of why the system needs to be fixed! NO communication between branches of the SAME tree....sad indeed!

Roland - why do you think they make things so difficult? Do you think it's purposeful or just careless use of a broken system?

Hey everybody... I'm hungry...tired...need to eat and rest! I will respond to everyone though... I promise!! thanks so much again for commenting here! I feel very connected to all of you... Gotta Love ACTIVE RAIN!

bradenton realtor

www.TheSerenaGroup.com

FYI here's a link to the Federal Housing Finance Board... a place to start?

http://www.fhfb.gov

May 07, 2009 11:20 AM

Esko Kiuru

Bethesda, MD

Wendy,

It's sad how lackadaisically banks seem to approach the short sale and foreclosure processes. Lots of good deals get wiped out because of their lack of effort and what not.

May 07, 2009 12:04 PM

Anthony Stokes-Pereira

Better Homes and Gardens Rand Realty - Nanuet, NY

Realtor

I do think the system is broken, I am so tired of the slow process. I wish you well.

May 07, 2009 12:56 PM

Paula Burt

REALTOR , SFR, RECS

Yes, the system is broken! (And leave it up to Lenn to be her succinct, direct, no-holds-barred self! She gets right to the point.) I, however, have been cursed with needing to expound upon my opinions, or contradict those with which I strongly disagree. (When you read this, please keep in mind that I am the eternal optimist/idealist, but I function better when I think and behave as a realist, with logic in mind.)

Banks/Lenders are in the real estate business and should not be, not without hiring real estate professionals to handle their real estate business.

Government should never have encouraged the change in who could get loans decades ago, nor should they be "bailing out" the mess from it now. Lenders should never have gone along with any of it.

Buyers should never have bought homes they would never be able to afford. But lenders and the government, especially the "too eager salespeople", convinced them they could, sold them ARMs that would escalate, and never explained to them that it would happen, much less asked them how they would/could handle the payments when it did/does escalate. And REALLY! Who could read those contracts and understand them, and not take the salesperson's word for what it all meant, even if they should have been more diligent? Their eyes glazed over, and they believed what they were told. I know some pretty savvy people who were taken in by ARM refinancers, and have lost everything!

REALTORS could have been more diligent regarding their clients financing, but do we really have a say, did we ever, in the transaction between the lender and our buyer? We could have refused to represent the buyer, but if the lender is willing to lend, do you really say no? Well... DID YOU??? Personally, I came into the business just when the bubble started to burst, so I've no experience with our industry during those times, but I do hear the stories all the time. Sad; very sad!

I believe the home-owners should have to pay their debts, no doubt! But if the lenders are willing to take "short sales" to remedy a bad situation, that should be their decision. Again, they should hire professionals to facilitate these remedies, not just people from their own industry who have no knowledge of our industry. The home-owners are asking the lenders to do short sales, but no way can they insist on it or force them to do it. The lenders have every right to just do the foreclosures and be done with it, but it does make sense to try to get more out of it by doing the short sales.

Having said all that, I think short sales should only be done by REALTORS who are specially trained in handling them. The lenders will continue to behave the way they have been doing, and the REALTORS who specialize in short sales have gone to the time, trouble, and expense of learning how to do them. Let them develop their contacts and networks and get the job done. Those of us who have not been specially trained should stay away from them, or get trained. For now, I do not want to. I prefer to let my colleagues who are trained handle them.

Mostly I deal with buyers. I educate my buyers about the "short"falls & pitfalls of short sales. No one has gone for one yet. I have, however, represented buyers who bought foreclosures. Those are sticky enough for me, thank you, but I don't mind doing them. Usually not the nicest deals I've done, but do-able nonetheless. There are still many houses on the market that are not short sales, and I prefer to deal with them, for now. Who knows? That could change, and then I will get trained & educated in the process.

Can we make a difference? If we stay away from doing the short sales, and if NAR and our state associations get involved, maybe. On our own? ...can't hurt to try! But probably not... will be interesting to watch over the years to see what happens.

May 07, 2009 01:01 PM

Kellie Fitzgerald

Kellie Fitzgerald - Chiricahua Real Estate - Pearce, AZ

No, they certainly are not listening, and I have no idea why these lenders have not been reaching out to the real estate professional communities for feedback. Some of the situations I've seen recently with short sales have become so ugly not only did buyers walk away but sellers ultimately filed for bankruptcy. In one case the lender made the short sale process so difficult for a CASH buyer that buyer walked and bought something else...then the property went into foreclosure and was auctioned off for far less than that buyer was willing to pay. Makes no sense at all.

It just seems like they're shooting themselves in first one foot then the other.

May 07, 2009 04:20 PM

Bradenton, Sarasota, Real Estate ~ The Serena Group

Bradenton-Homes, Experts - Keller Williams Realty - Bradenton, FL

Selling Real Life Dreams in Paradise!

David - Some banks do seem to be less concerned with making the process leaner and meaner!

Lee - Bankers making statements like: "We don't want to be in the Real Estate business!" are rather ironic, don't you think? ... given the fact that when they get a chance NOT to be... they let it slip through their fingers!

Ann - just another example of how fractured and non-cohesive the short sale system really is! We must use due dilligence, as REALTORS to make sure that when we take short sale listings that we are NOT contributing to a failing system. QUALIFY your short sale prospects... BEFORE you take the listing. Information is only as reliable as the person giving it.... the banks need to hire well, and educate and train their servicers in a more uniform way so that real estate professionals can rely on the information given to them by the banks. You have brought up a serious issue here!

Statewide Realty - I don't think there are any signs that the banking investors are opening their eyes by themselves to see what is smack dab ... right in front of their faces.... the system needs reform... NOW! Our economy isn't likely to improve for a long time if we just wait for them to decide by themselves to improve their processes. You made some intelligent and wise suggestions in this blog forum.... it's people like you and I who can push for some relief from this needless frustration. Together we are smart enough to figure this out. We are part of the problem...IF.... we are not part of the solution!

Lee - Specific suggestions... I like it! Well... I think that there should be a strict and uniform evaluation process issued by a governing body and followed by ALL the banks (not on a voluntary basis...) for all loans that are in danger of default... that actually go into default... and that foreclosure should be a last resort. If the guidelines were more distinct... I think we might see a big difference in the numbers. What do the rest of you think?

Joe - CLEAN UNDERWEAR?! I HOPE THAT IS A GIVEN! We have had some experience with third party negotiators on my team... none of it positive, I'm afraid. I would be very careful with this type of transaction. Unfortunately because of the scattered nature of how the banking and real estate industry are handling short sales, litigation in the not so distant future could be a problem for those of us who let the water get too cloudy before we pitch it! Some clear tips and facts from REALTORS out there who are having a good percentage of success with closing their short sale transactions would be appreciated by peers who may not have as much experience. I have started a group here on ACTIVE RAIN called: REALTORS for Short Sale Reform. Please check it out. I posted a message there with a tool that my team uses to help organize and streamline our process... I'm sure that others of you out there could also contribute.

Harrison - we can... try not... do we must!

Jon - I don't think that any of us think that banker should LIVE to please us!! I do think, however, that they should have some pride and ethics when practicing their profession. I think that they should care how their actions affect people... our economy... we are not calling to destroy anything... just to improve and fix something that is broken. I would like to think that the banking industry would have the same concern and would be ready and willing to cooperate in an effort to make change where change is needed. I do agree that the real estate industry did contribute this shattered mess! AND that is why I think that we should be responsible in helping to find a solution and help implement it.

Florida Pines Realty - your comment about fighting is astitute... we need to stop that and focus on the problems. You made a great observation about the fact that salaried workers are on the front lines for the banks dealing with REALTORS who are compensated by commissions. THAT IS a conflict... a bone of contention, if you will. This inequality of motivation is a BIG part of the problem... remember that identifying the issues is the first step in solving the problem... this is a HUGE issue!

Connie -no doubt... this issue has people hot under the collar!

Diane - a boycott.... that's an interesting way to look at it! Kinda like ignoring a child that is throwing a temper tantrum in public in order to get him to stop throwing tantrums and straighten up! JUST DON'T DEAL! Very hard to do, however, in a market where the only things that are selling are distressed properties.

Lenn - Why do we have to lay down for the banks? I don't get it? They don't listen because most of us are too apathetic to push.... they dont care.... because they know that. They are not educated, trained, experienced in real estate and don't care to be because no one is challenging them and holding them accountable! I AM disappointed BECAUSE people DON'T expect anything more!

Wendy Herndon ~ The Serena Group

May 11, 2009 04:44 PM

Anja Kerstens, 669.270.8034

Compass - Morgan Hill, CA

GRI, NHCB, CDPE, CHS. Silicon Valley Homes

I loved reading the comments on this excellent blog. I don't feel alone with the frustration of today's market.

I had a customer I could not represent after discovering that they just decided to walk away from their home and sell short. However, they did offer the home below market value in order to solicit offers and ended up with multiple offers. The owners claim that they don't mind taking the loss since they "benefit" also on the buyers' side since they claim to be able to purchase another home. They want to do this quickly before they "can't qualify for another loan". I don't know what they are thinking because I don't think they will be able to get another loan. By the way: they are taking a loss? What about the lender? What about the next homeowner who needs to sell? These people just "dumped" their home on the market.

I am watching this sale patiently and wait to see how it develops.

May 13, 2009 12:19 PM

Kelsey Barklow

Hurd Realty - Johnson City, TN

423/948-9154

Yes, most lenders doing shortsales are horrific. I am lucky to have gotten answers from the first and second lien holders on my short sale so quickly.

May 14, 2009 03:40 PM

Anonymous

Thomas Ooten - Kessler Mortgage Corp.

Hey Gina! I just wanted to add my thoughts on the short sale process and some new information to pass along to you and the other agents. I am also a real estate broker. It is important to realize that up until recently there was no standardized process to handle the loan modifications or short sales. The banks have a legal obligation to the investors of the securities that were purchased and will attempt modify the note before finally submitting to a loss via foreclosure, a deed in-lieu or a SHORT SALE.

a press release from the U.S. Treasury

The Secretaries announced new details on the Making Home Affordable program:

Foreclosure Alternatives provide incentives for servicers and borrowers to pursue short sales and deeds-in-lieu (DIL) of foreclosure in cases where the borrower is generally eligible for a MHA modification but does not qualify or is unable to complete the process, which helps prevent costly foreclosures and minimizes the damage that foreclosures impose on borrowers, financial institutions and communities. The new details will simplify and streamline the process of pursuing short sales and deeds-in-lieu, which will facilitate the ability of more servicers and borrowers to utilize the program. The program provides a standard process flow, minimum performance timeframes and standard documentation, and it offers financial incentives to servicers and borrowers to pursue these alternatives to foreclosure.

Home Price Decline Protection Incentives will provide lenders additional incentives for modifications where home price declines have been most severe and lenders fear these declines may persist. To encourage the modification of more mortgages and enable more families to keep their homes, the Administration, building on insights pioneered by Chairman Bair and the FDIC, has developed an innovative payment that provides compensation based on recent home price declines. Together the incentive payments on all modified homes will help cover the incremental collateral loss on those modifications that do not succeed. HPD P payments will be linked to the rate of recent home price decline in a local housing market, as well as the average cost of a home in that market.

www.KesslerLoanMOD.com

www.KesslerMtg.com

Sincerely,

Thomas K. Ooten
Lic. Real Estate Broker
FL Mortgage Broker

May 15, 2009 02:32 PM

#79

Anonymous

Cliff Keith

This happen over the weekend and I thought you might want to know this if you have not seen it before.

First of all the Treasury Department indicated it would reward lenders who closed on properties with a short sale. Likewise the Feds issued a few guidelines for short sale so banks now can figure out how to price a short sale.

Bank of American is taking the lead on this by loosening its policies on 2^nd mortgages. They now allow 2^nd mortgages 5% of the loan amount as a payoff. The good part is if B/A is the second lean holder they take the 5% automatically.

What that means is a big challenge to short sales has been addressed by the Feds and adopted by banks. It's about time these guys start working together. Today they get an "Atta-boy/girl"

http://www.StartFreshLLC.com

May 24, 2009 05:51 AM

#80

Bradenton, Sarasota, Real Estate ~ The Serena Group

Bradenton-Homes, Experts - Keller Williams Realty - Bradenton, FL

Selling Real Life Dreams in Paradise!

Hi Everyone!

First of all, I apologize for not acknowledging everyone's comments individually... I started to but this post kind of took on a life of its own! As a result of this post, Myself and my Team have been very actively involved in trying to unite fellow REALTORS in a couple of groups... one on Facebook called REALTORS FOR SHORT SALE REFORM and another here on Active Rain by the same name. We have made contact with and had discussion with many colleagues as a result and our focus has also been on sharing our "Short Sale Systems" with others to try to help smooth the process through discussion and education in our own industry. I got a direct contact from Floyd Fulford, 2009 President of New Smyrna Beach Board of Realtors asking if he could forward this blog post and comments to FAR president, Cynthia Shelton, and John Sebree, FAR Vice President of Public Policy. I, of course, said "YES" please do! Floyd has a relationship with both of these officials and was kind enough to use that to get their attention on this very serious matter.

As we've all been reading in the news... and as the last commenter, Cliff, also Thomas, has shard with us... It looks like the Feds and the banks are working to put some policies into place, FINALLY, plans that will expedite, streamline, and clarify the "broken" processes that we have all gotten used to maneuvering around. Gee... maybe NOW we can get down to helping the homeowner avoid foreclosure, clear the system of distressed properties to get the economy moving again....and getting paid for the work that we are doing as responsible, professional REALTORS! Just remember, though, the banks and Feds are not the only groups that need to work on their processes... REALTORS need to educate themselves, adopt their own efficient systems, and help other fellow REALTORS do the same! A BIG thank you to Floyd Fulford, and to all of you who continue to care about and participate in this issue... join one of our groups! We'd love to have you there.