By George White, RE/MAX Times Online Managing Editor
The U.S. Treasury Department last week unveiled a plan designed to streamline and encourage short sales, a move RE/MAX leaders have been advocating for some time.
Under provisions of the newly created "Foreclosure Alternatives Program," the process will soon include standardized documentation, cash incentives to lenders and moving allowances for homeowners.
RE/MAX International supports the government's action.
"We applaud the administration for creating the Foreclosure Alternatives Program, which promotes the short-sale process," says RE/MAX International Chairman and Co-Founder Dave Liniger (ABR, CRB). "We've been talking with key lenders and government officials for months about the short-sale issue and couldn't be more pleased that our hard work has finally paid off."
Here's a Treasury Department fact sheet about the plan, as well as a release from the National Association of Realtors.
Because RE/MAX International leadership recognized the viability of short sales as an important piece of the foreclosure puzzle, more than 5,000 Associates already have been trained through the Certified Distressed Property designation course, which covers the process in detail. The next airing on RSN is June 9-10.
"We've been preparing for, and pushing for, this type of action," says Mike Ryan, RE/MAX International Senior Vice President of Media Training. "We've felt for a long time that short sales provide a lifeline for homeowners who can't afford to stay in their homes, even with a loan modification. With a short sale, the sellers get out of a bad situation, the banks save on costs and the neighborhood avoids the many problems associated with vacant, foreclosed properties."
Ryan says it's more important than ever for Associates to learn how to handle short sales, which have traditionally been avoided by agents unwilling to navigate the long, frustrating and often unsuccessful terrain.
"It's understandable why many Associates have been reluctant to pursue this business. But with distressed properties accounting for half of U.S. sales and a whole new level of attention now being put on making short sales easier to complete, it really is time to let go of any reservations," Ryan says. "With the Treasury Department's involvement, we're going to see a lot more emphasis on short sales, through lenders, the media and the public. Our people need to be as educated as they can be about this segment of the market."
Two days after the Treasury announcement, The New York Times published a story, headlined "Lenders More Open to Short Sales," that included this passage:
"Mr. Mitchell of Lynx says short sales are often the best approach, even for homeowners considering a new loan to save the home. 'It's gotten to the point where people understand that sometimes you have to start over,' he said. 'A loan modification might help you in the short term, but sometimes what people need to do is get out completely.'"
The perception of short sales is clearly changing, Ryan says.
"It's up to us, and each individual Associate and brokerage, to be prepared," he says. "The foreclosure problem isn't going away anytime soon, and in fact will probably get worse before it gets better. But short sales provide a source of relief - and we want our agents to be able to close them better than anyone."
up to us, and each individual Associate and brokerage, to be prepared," he says. "The foreclosure problem isn't going away anytime soon, and in fact will probably get worse before it gets better. But short sales provide a source of relief - and we want our agents to be able to close them better than anyone.