REALTORS® Praise FHFA for Issuing Short Sale Approval Guidance
WASHINGTON (April 18, 2012) –
The National Association of REALTORS® applauds the Federal Housing Finance Agency (FHFA) for issuing new guidance requiring servicers of Fannie Mae and Freddie Mac loans to speed responses to short sale requests.
The guidelines would require servicers to acknowledge receipt of short sale purchase offers within three business days; respond to short sale requests within 30 days (with a possible 30-day extension); and make a final decision within 60 days of receiving purchase offers.
“As the leading advocate for housing and homeownership, NAR knows that delays in approving short sale requests remain a significant challenge for REALTORS® and consumers and often result in canceled contracts and the property going into foreclosure,” said NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami. “REALTORS® greatly appreciate FHFA’s efforts in establishing a timeframe for responding to sellers and potential buyer offers to help streamline the short sales process.”
NAR has long urged the lending industry to improve the process for approving short sales. When a family is absolutely unable to stay in their home, a short sale minimizes the negative impact on sellers and communities, and NAR believes that streamlining the approval process will reduce the amount of time it takes to sell the property, improve the likelihood that the transaction will close, and reduce the number of foreclosures. Short sales also help stabilize home values and neighborhoods by keeping homes occupied, which benefits the housing market and aids in the recovery.
Veissi praised FHFA Acting Director Edward DeMarco for responding to the concerns of consumers and REALTORS® regarding the ongoing delays in the approval process and the negative impact that slow response times are having on buyers, sellers, lenders, and the housing market.
NAR also thanked Sens. Lisa Murkowski (R-Alaska), Scott Brown (R-Mass.) and Sherrod Brown (D-Ohio) for introducing S. 2120, and Reps. Tom Rooney (R-Fla.) and Rob Andrews (D-N.J.) for introducing H.R. 1498, proposed legislation to reduce delays in approving short sale transactions.
“Their leadership on this issue helped raise the attention needed to make the short sales process more efficient. While these new guidelines will hopefully help close short sale transactions at higher rates, we believe legislation is still needed to impose mandatory deadlines on all loan servicers,” said Veissi.
Implementation of the new guidelines should begin after June 15, 2012. For more information, visit www.realtor.org/topics/short-sales.
The National Association of RealtorsÒ, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.=
SOURCE: Chris Gosselin, Regional Political Representative AK, CA, CT, GU, HI, MA, ME, NH, NV, RI & VT
National Association of Realtors® – CGosselin@realtors.org
Chris Gosselin’s Brief Update from DC to State and Local GAD’s
Hello from Washington. While Congress has been notably quiet about big picture items that we are continuing to monitor such as tax policy and the future of the secondary mortgage market, there are some things moving here in DC that I wanted to update you about.
First is the taxation of forgiven debt – there is now legislation in the House that would extend the provision for two years and another provision that would extend it for one year. Obviously two years is better than one, but we are not taking a position on which one goes forward. More information about the issue can be found on our website: Will I Pay Tax on Short Sales, Foreclosures, or Loan Modifications?
There have been several questions about the Bank of America announcement about their deed-for-lease pilot program and our position. I’ve attached a summary from B of A that outlines their proposal.
You may have gotten questions about the AG Mortgage Settlement and its impact on the real estate market. We are still going through the full settlement but we have put together a brief document that outlines the top things we are watching: National Mortgage Settlement and Realtors – Five Quick Takeaways.
We also just sent regulators a letter updating our position on the REO bulk sales initiative now that we have some more guidance on the direction of the program. It’s four pages and should answer most questions about what NAR is doing on this issue – attached to this email as well. It also references the Bank of America proposal above.
Rally update: If you are getting any questions about the Realtor Rally at the midyear meetings, our website www.realtorrally.org is up and running and has answers to most questions that you or your members may have. If there is additional information needed, there is a web form on the site that is monitored by our staff in DC planning the rally. Of course, feel free to get in touch with me if I can answer any questions as well.
SOURCE: Chris Gosselin, Regional Political Representative AK, CA, CT, GU, HI, MA, ME, NH, NV, RI & VT
National Association of REALTORS® — CGosselin@realtors.org
C.A.R. News release: Gov. Brown signs SB 458
For release:
July 15, 2011
CALIFORNIA ASSOCIATION OF REALTORS® applauds Gov. Brown on signing SB 458 into law
LOS ANGELES (July 15) – The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) applauds Gov. Jerry Brown on signing SB 458 (Corbett) into law. SB 458 extends the protections of SB 931 (2010), to ensure that any lender that agrees to a short sale must accept the agreed upon short sale payment as payment in full of the outstanding balance of all loans.
Under previous law (SB 931 of 2010), a first mortgage holder could accept an agreed-upon short sale payment as full payment for the outstanding balance of the loan, but unfortunately, the rule did not apply to junior lien holders. SB 458 extends the protections of SB 931 to junior liens.
“The signing of this bill is a victory for California homeowners who have been forced to short sell their home only to find that the lender will pursue them after the short sale closes, and demand an additional payment to subsidize the difference,” said C.A.R. President Beth L. Peerce. “SB 458 brings closure and certainty to the short sale process and ensures that once a lender has agreed to accept a short sale payment on a property, all lienholders – those in first position and in junior positions – will consider the outstanding balance as paid in full and the homeowner will not be held responsible for any additional payments on the property.”
SB 458 contains an urgency clause making it effective upon signing.
Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with nearly 160,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.
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SOURCE: http://www.car.org/newsstand/newsreleases/sb458/
Short Sales 60 Days Later
My last blog on the Short Sale transaction was in mid May right after the NAR meetings in Washington, DC. Although the banks prefer a Short Sale transaction over a Foreclosure, there are still many hurdles required to complete a Short Sale transaction.
While in Washington, DC and in a subsequent conference call with the Department of the Treasury, both Fannie Mae and Freddie Mac rejected the idea of increasing the amount that a negotiator could offer a second trust deed or junior lien holder on HAFA-approved Short Sales. On proprietary Short Sales, the bank may offer more to the junior lien holders — more than the $6,000.00 maximum required under a HAFA Short Sale. The second trust deed or junior lien holder must agree with the bank’s approved settlement offer for a Short Sale transaction to work.
One of the biggest problems while negotiating a Short Sale is the banks value and the true market value of the asset. The bank is trying to recover a percentage of the debt while they should be trying to recover a percentage of the value.
Please do not forget your MARS Disclosures once you discover you have a Short Sale. The Short Sale transaction may save your career so spend some time on understanding the process. The negotiator plays a very important roll in this process; they are not always right so be patient with them, submit your documentation, and know their system.
AUTHOR: LeFrancis Arnold, CAR 2011 President-Elect, LACBOR Past President — www.LeFrancisArnold.com and LeFrancis’ On The Move (blog) …
Loan Mod or Short Sale?
Friends,
I have been spending a lot of time on the Short Sale issue. I feel that some progress is being made in this arena; however, we have to keep up the pressure by really looking at our customer’s circumstances. Are they really a loan modification or are they really a short sale? Our job is to look out for the clients best interest and get the answers they want!
AUTHOR: LeFrancis Arnold, CAR 2011 President-Elect, LACBOR Past President — http://www.LeFrancisArnold.com
The Short Sale
In 2009, I wrote my first blog on short sales and it’s amazing how much the short sale transaction has changed. We had the most success with short sale transactions dealing with Wachovia Bank since we closed an escrow in about 60 days from offer to closing; alternatively, it took me a year to close a pretty easy Bank of America short sale — a short sale that had no seconds, only a Bank of America purchase money First T.D. Why did it take Bank of America one year to close a simple short sale? I still ask myself that question so it’s no wonder why Real Estate agents don’t want to touch this type of transaction.
Maybe the biggest issue with the short sale is the loan modification. For over a year, the banks allowed property owners to stay in their homes without making payments while the world watched in shock. Then came the HAMP and then the HAFA. If you are not aware of these Treasury Department recommendations, these volunteer programs have had very little success within the scheme of things. While in Washington D.C. the week of March 28-31, 2011 with CAR Leadership for the CAR “Officers’ Congressional Appointments” meetings, I had the opportunity to meet with members of Congress, Freddie Mac, Fannie Mae, the Treasury Department, the Federal Trade Commission, and HUD, I see why everyone is so confused and everyone has a different solution. In 2010 Fannie Mae closed about 190,000 REO’s and about 75,000 short sales. Since their losses were greater on the REO side, they admitted that the short sale is their preference because it saves the company money. If Bank of America, Wells Fargo Bank, CitiMortgage, Chase Bank and every mortgage banker can give you a DU or do a loan approval subject to an appraisal and close in 20 to 30 days, then why does it take so long to determine if a homeowner can qualify for a loan modification? There are very few mortgage principal write downs — generally only where fraud appears or special circumstances occur. After sitting in the Capitol Committee hearings on Fannie Mae and Freddie Mac in Washington DC and listening to Edward J. DeMarco, Acting Director of the Federal Housing Finance Agency, testify to the committee, I would be surprised if Fannie or Freddie start the process of principal write downs any time in the near future. Most loan modifications are not HAMP modifications and most short sales are not HAFA short sales, mainly because they are both volunteer programs offered by the Treasury Department. No wonder the program does not work. Each bank uses its own set of guidelines, using the HAMP and HAFA guidelines only as a model.
Currently, I have several short sale transactions in process and my newest agent is having a lot of success working short sale listings. Even though we are not doing loan modifications, now we need to worry about the new MARS rule, our disclosures, and our record keeping. What a life for the professional Real Estate agent!
AUTHOR: LeFrancis Arnold, CAR 2011 President-Elect, LACBOR Past President — http://www.LeFrancisArnold.com
