Notes From Readers: Short Sale Regulations Needed

A collection of letters from readers of REALTOR® Magazine this month.

April 1, 2009

Your article ("Short Sales: The New Wild West," March 2009, online) was most informative and spoke to my experiences in the marketplace. I’m a practitioner in Chicago, and my last two transactions have been short sales. They have yet to close, and it’s been months! Banks are a major problem in both scenarios. I’ve seen banks wait six weeks before they even assign a processor to look at a contract. If there aren’t regulations regarding their obligations to review contracts and make timely decisions, how can we bring attention to their less-than-professional behavior? —Pat Spaulding, ABR®, @properties, Chicago

Too Many 'Specialists'

A big problem I’m finding in my local market is that real estate professionals are running around claiming to be short sales specialists. Although some may have taken a short sales class (which by no means is enough to qualify them as a specialist), most haven’t taken a course or completed a single short sale. This is doing a disservice to consumers and our profession as a whole. Practitioners should not be permitted to make these claims or engage in short sales if they lack the proper training. —Jason L. Opland, Obvious Choice Realty, The Opland Group, Dublin, Ohio

Keep Your Chin Up 

What a great interview with REALTOR® Emeritus Geary Jones ("Words of Wisdom: Getting Through Tough Times," February 2009, online). It’s refreshing to read about someone with "some whiskers." I, too, believe it’s important to have a positive attitude. When people ask me how the market is, I simply tell them: "Perhaps not as good as it was, but not as bad as it’s made out to be." Keeping a good attitude defines who we are as REALTORS®.—Suzanne Hines, Robert F. Lindsay Co., Toledo, Ohio

Loan Modifications can Backfire 

I found it very disappointing that NAR praised Rep. Barney Frank (D-Mass.) for his plan to encourage loan modifications ("On Your Side, Every Step of the Way," March 2009, page 4). Nothing could cripple the real estate industry more than having government tell the suppliers of mortgage money that their contract can be "modified" after the fact. Investment capital needs long-term guarantees or it will not be made available.—Neal McKenna, Century 21 Select Group, Pocono Pines, Pa.

NAR Government Affairs responds: Turmoil in the real estate and mortgage markets has vexed Congress, the Bush administration, and the new Obama administration. Without price stabilization, property values will continue to fall, and reducing the nation’s inventory of unsold homes is necessary for any stabilization effort. On the demand side of the inventory equation, NAR pushed for the new $8,000 tax credit to help get buyers off the fence. On the supply side, loan modifications can stem the flood of foreclosures and reduce the introduction of new inventory. The average foreclosure takes 18 months to complete and results in more than $60,000 in additional costs for the lender. It hurts the community, too. A single vacant foreclosed home reduces the value of neighboring homes by $5,000. To date, all loan modification efforts have been voluntary. The Obama administration’s plan goes one step forward and provides incentives to lenders who undertake modifications. We expect differences of opinion among our members. Yet we strive to ensure that the association adopts public policy principles that address the broad concerns of the membership, the real estate industry, and American property owners.