C.A.R. Attempts To Improve the Short Sale Nightmare

I received an interesting email today from the President of the California Association of REALTORS (C.A.R.), Beth Peerce.    It was to notify C.A.R. members of an initiative that they will be launching tomorrow in an attempt to ‘improve the short sale process’.  The email in its entirety is as follows:

March 9, 2011

Dear Linsey,

As you may know, C.A.R. has been working on numerous efforts to address your concerns about the difficulty of working with short sales.

To that end, I want to give you advance notice of perhaps one of our most visible activities to date, and one that may be a first in C.A.R.’s 100-plus-year history.

Tomorrow, C.A.R. is placing an open letter advertisement in California’s seven largest daily newspapers, calling on lenders and industry regulators to streamline and improve the short sale process.  C.A.R. is taking a leadership role in this effort by getting this letter published and pointing out lenders’ and servicers’ unworkable short sale processes.  We’re also appealing to various constituencies, such as regulators, elected officials, nonprofits, business organizations, companies, and individuals to join us so that more families are able to arrange a short sale, rather than lose their homes.

In the letter, I write, “With the number of homeowners who owe more than their mortgage is worth hovering at 30 percent, experts predict there will be many more foreclosures in 2011 and 2012.  Unless we take immediate, aggressive action to assist these homeowners, any meaningful recovery in the housing market and overall economy will continue to be delayed.”

The open letter will appear in a full-page advertisement in tomorrow’s Los Angeles Times, San Francisco Chronicle, San Jose Mercury News, Sacramento Bee, San Diego Union-Tribune, Bakersfield Californian, and Fresno Bee.  If you live in one of those areas, I hope you can pick up a copy of one of those newspapers tomorrow and read the open letter.  If not, we’ll be sure to post it on car.org.

Help us spread the word further by leveraging your relationships with your local paper and asking them to publish it.  Or post it on your website, if you have one, to reach your clients and other consumers.

Sincerely,

Beth L. Peerce
2011 President
CALIFORNIA ASSOCIATION OF REALTORS®

 

Later I received another email from C.A.R. Newsline that goes to members stating,

“The open letter addresses the following topics: The benefits of doing a short sale rather than a foreclosure; the inconsistencies with short sale processes at banks; the challenges of working with multiple lien holders; and the slow and/or nonexistent communication by banks and servicers to REALTORS®, homeowners, and buyers.”

Scratching My Head

While I applaud the effort to address the issue, there are a few things that leave me a little perplexed.

First, the negative equity situations, and need to negotiate short sales for sellers, began in 2006 and certainly began in earnest in 2007.  We have seen four years of sellers, buyers, and the real estate community suffering through long, painstaking processes that have seen very little improvement during that time.  After four years, the fact that C.A.R. has resorted to taking ads out in major newspaper publications implies that C.A.R. is finding that they are out of alternatives to influence significant change.

Secondly, it’s interesting to me that the Orange County Register has been omitted from the newspapers they chose to utilize for this outcry.  Given the fact that 30 to 50% of the active listings (depending on city and price point) are short sales, this sizable market seems be a place to have had such a discussion.

I’ll be interested to see the piece when it comes out tomorrow.   Ms. Peerce says that the attempt is to appeal to ‘various constituencies, such as regulators, elected officials, nonprofits, business organizations, companies, and individuals’, as well as banking institutions and servicers.  But this problem has been well known by all of these folks for a very long time.  If earlier attempts to streamline haven’t made any headway, I’m not sure how this will improve things.

But, there’s no question, I’d be happy to see it.

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