Home Affordable Foreclosure Alternatives Program (HAFA)

For those of us selling homes in the greater Phoenix metropolitan area, short sales are a simple fact of life. In some newer communities, homes built in 2006 for example, almost every single one has entered the re-sale market a distress sale of one kind or another.

We all know how frustrating it can be when banks take up to 7 months to respond to an offer, by which time the buyer has likely already purchased something else. Frustrating for seller, buyer and agent alike. Hopefully, that is about to change.

On April 5th 2010, the above mentioned program, known as HAFA, came into effect. On its face, it seems to be a step in the right direction. Participating banks, and that is almost all of them, agree to abide by established time frames for responding to offers and for determining the net proceeds they desire from a short sale. If they do not comply, they will be ousted from the program.

It is quite involved so I suggest you Google it, but here are some highlights. For the Realtor, it prohibits the bank from reducing the commission. For the seller, they will be absolved of the debt without any judgements or promissory notes allowed. The seller may also receive $1500 for re-location. (Quick translation; relocation= not trashing the joint.) The bank also receives a financial incentive for following the guide-lines.

All in all, it seems to be a win-win situation. So why am I concerned? I search the MLS every day for various clients, often in areas that are chock full of short sales. Since this program was announced, of all the short sales I have reviewed, only ONE has mentioned HAFA. This is tragic. This means that there are hundreds of agents out there who have the listings, but do not have the faintest idea of how to process them within the new frame work. It is tragic because what is, or was, an extremely difficult process no loner needs to be. If the agents don't know about it, do the banks? If a great idea fell in the forest, and no one was there to hear it...

I am curious to hear opinions on the from professionals across the country. Maybe it's just my area. What say you?

The Shame Is, That They Don't Really Have Any

In this short post, I am re-visiting a topic upon which I have ranted before. Realtors who negotiate commission rates in the "remarks" section. Firstly, it is in direct contravention of MLS rules to negotiate the commission in an MLS listing. I saw one today that said, and this is disappointingly typical, "commission to be 50% of whatever bank will pay." So if the bank offer $1.00 and a sandwich you are obliged to accept 50 cents and half a PB & J? Have you no pride in your work? Have you no self-esteem?

If your client were to see that type of verbiage, would they see you as a champion of their cause; fighting fearlessly for their last dollar? More than that, when I see that kind of defeatist phrasing in a listing I sit back and smile. Why? Because I know that if we were to pursue your listing, I would crush you in the negotiations.

If you are that agent, you need to consider another line of work. You most certainly are not benefiting your client, so you need to step aside and let us professionals take care of business.

Likewise to all you puppets who insist that buyers must qualify with your preferred lender. Grow a spine! The message you send is this, "I do not trust the loan status report (LSR) that your lender has provided because the lending business is so corrupt/malleable/unregulated (pick one), but I insist you blindly trust my random guy with all your most private and critical and secure information before we can proceed."

If you don't stand up to these banks, you will just end up under their complete control.

For the record, I have never allowed a client to qualify with another lender on the whim of a seller, and I never will.