NAR Voices Foreclosure Concerns

In a letter distributed to NAR members, President Vicky Cox Golder noted that there have been widespread reports of problems related to foreclosures. She said NAR has sent a letter to regulators expressing REALTOR® concerns. NAR’s Leadership Team has held several meetings during the past two months with the heads of major national banks to discuss problems with short sales and the availability of credit to potential buyers. NAR’s position has always been that we want to help homeowners avoid foreclosure, whenever possible. The key points NAR has made during these meetings are:

TransparencyREALTORS need to understand each lender’s policies for underwriting loans, valuing property, selecting brokers for REO listings, and deciding whether to approve a short sale.

ServiceHaving a single point of contact is an extremely important to improve service to the borrower, short seller, and the real estate agent. NAR is urging all lenders to adopt this approach.

BalanceFHA and the government-sponsored enterprises (GSEs: Fannie Mae and Freddie Mac) have become over-focused on safety at the expense of their mission. NAR urges lenders to advocate a return to a reasonable center, now that credit policies have over-corrected.

SpeedWhen a borrower applies for a loan and receives a conditional approval, the conditions are often impossible to meet. It would be better to decline the loan and allow all parties to move on. Short sale approvals often take months. HAFA and other short sales
programs should be implemented quickly.

AccuracyLenders are aware that problems related to the application of new appraisal guidelines have skewed some appraisals. NAR continues to raise these issues with the lenders, regulators, FHA, and the GSEs and seek solutions.

Performance/CompensationReal estate professionals work extremely hard and for many months on a successful short sale. NAR urges lenders to make commissions policies more transparent and to agree not to reduce commissions at or shortly before closing. At the same time, NAR acknowledges that lenders waste time processing short sales that are not real offers, and urges members not to participate in this practice.

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