I know–this time it really has been a while! No excuses; it’s just that working and having a life sometimes get in the way, right?
Earlier this week, I had the opportunity to be part of a morning of masterminding with representatives of major mortgage lending and servicing organizations and a group of top short sale and REO agents.
Eye opening? Yes and no. Here’s the inventory on both sides:
ENCOURAGING EYE OPENERS: The lender and servicer group reflected a strong grasp of short sales and acknowledged many of the property valuation, processing, and communication issues agents experience every day–things that frustrate earnest buyer offers and delay offer acceptance and closing. At one point someone in the agent audience at that discussion commented, “I think a lot of us wish we were negotiating these short sales with all of you!”
Also on the plus side, a lot of clarification and confirmation that–processing issues aside–its is the underlying investor who really drives the bus in short sales. It is their criteria for a return on investment and terms of settlement that mainly decide whether an offer will be accepted and a deal will close. The servicing banks (and other servicers) are now reorganizing their people and teams around the major investor groups–an acknowledgement of who is in charge. The Fannie Mae representative in the discussion said a lot of things to make it clear that working through servicers is no picnic for them either! Will things get better as a result of this rethinking and reorganizing–no doubt; now much better, who knows.
One sign of positive energy in all this, Fannie Mae’s representative pointed out an excellent Internet resource for homeowners www.knowyouroptions.com It a well thought out site that allows consumers (who take the time and initiative) to see their real options–how to help themselves when they are in default, or headed there.
Another plus, at least one major lender/servicer–Wells Fargo–acknowledged they are testing the Equator short sale processing system and hope to adopt it soon. Warts and all, Equator has helped B of A short sales improve for almost a year now. The agent crowd seemed to feel that steps like this are happening far too slowly. Maybe so. Why?
DISCOURAGING REALITY CHECK: The large lending and servicing organizations definitely know short sales don’t work well–even with the improvements of the last couple of years. How much do they want to speed the process up? That’s very unclear. There was little acknowledgement of the need to better train and motivate their staffs that handle the front lines of loss mitigation. There was a lot of reference to various “initiatives” to improve service and communication–but a notable lack of specifics.
Talking with a lot of agents in attendance afterward, it seems all our concerns about the extent of banks’ motivation to clear out distressed inventory remains a mystery, shrouded behind “the curtain” that surrounds their overall financial strategies. For example, do they and their investor clients truly see short sales as offering an economic advantage over foreclosures?
The concept and image of “the curtain” is so commonly accepted today that even a couple of the bank representatives alluded to it in their comments. The last few years have seen more and more use of the term “transparency”–to describe what is sorely needed in the world of consumer financial services generally.
Whether the topic is mortgage landing, credit cards, or investments–everywhere there are cries from both government and consumer advocates for more clarity–about terms, required return for the lender or product provider, and benefits for the consumer.
We seem to know now how we got into this “mortgage mess.” A lot of it had to do with pervasive greed, institutions’ deceptive practices, and consumers’ wishful thinking.
The question is–are we acting like we learned something as we work to extricate ourselves from “the mess.” Until we act smarter and move faster, we’re sentencing ourselves to a long and agonizing economic recovery.
The recovery is not all about real estate–but real estate is playing a huge part. I left these sessions feeling like I could hear a lot of muttering undertones of resignation–“it is what it is.” Probably true, and that’s too bad–for all of us. We need to keep fighting for more and better short sales. The outcome is still in our collective hands.
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