Wednesday, March 16, 2011
Inexperienced Real Estate Agents Cause HAFA Failures
Real Estate Industry News
Inexperienced and uneducated real estate brokers and agents are hampering short sales in the Home Affordable Foreclosure Alternatives program, according to a pair of real estate professionals that specialize in the distressed real estate sales.
Agents and brokers who are knowledgeable of the short sale process can complete HAFA agreements in as little as 60 days, according to Teaneck, N.J.-based agent Travis Waller, who spoke at a real estate conference in New York. But it all comes down to the short sale paperwork.
“The banks know who’s experienced and who’s not,” Waller said. ”If you don’t present the files correctly to the bank, you’re going to get put at the bottom of the pile. When the banks recognize you know what you’re doing with your presentation of the documents, you’ll get a call within a few days.”
But the inexperienced agent can cause a deal to fall apart. ”Many short sales are lost to foreclosure because of the inexperience of the listing agent,” Waller said.
Getting into the short sale market is sometimes the only option for agents and brokers trying to stay in business in tough markets, explained Cincinnati-based agent Holly Maloney. An educated short sales agent can help distressed mortgage borrowers, promote local housing stability and create new opportunities for agents, she said.
“There are so many REO properties out there,” Maloney told conference attendees. ”If we can short them, we’re keeping the market values up 35%-40% higher than what they would get on an REO property.”
Maloney spent years in the mortgage industry before getting her real estate license; both she and Waller have professional designations in distressed sales. Maloney said she’s completed 14 short sales under HAFA and Waller said he’s successfully closed 73 of the 75 short sale cases he’s taken.
In addition to listing properties intended for short sale and representing prospective short sale buyers, the agents also will work as a consultant to other listing agents and brokers, handling the short sale process in exchange for a referral fee — 30% of the listing agent’s fee, Waller said.
Waller said, in his experience, borrowers he lists properties for short sale have missed four to seven mortgage payments before they come to him, and most don’t have a lot of time before their property will go into foreclosure, so they must act quickly.
“You are working under the gun as a short sales agent. If you don’t know what you’re doing, then time is just ticking away,” he said.
But uneducated real estate agents and borrowers who wait too long aren’t the only causes of failed short sales. ”There are problematic banks and non-problematic banks in dealing with short sales,” Waller warned.
Maloney agreed and recommends agents use online resources to dispute failed HAFA agreements, particularly when dealing with a servicer for a private investor, rather than Fannie Mae of Freddie Mac. She recounted one deal where the servicer gave approval on a Thursday for a deal, but only if he closed by the following Monday. When all the pieces were in place, the servicer’s employee did not follow through with the proper documents to close the sale, and the bank repurchased the house at sheriff’s sale the next day.
“Through these websites I was about to dispute it and sell it during the 30 day redemption period,” she said.
The agents credited technology like the Equator platform as an effective technology tool to communicate and transmit HAFA documents to servicers, but Maloney added it’s the only way that officials from servicers like Bank of America and Nationstar will work with agents and brokers.
For the less tech-savvy servicing shops, fax machines are still the communication method of choice, though Maloney and Waller said they prefer e-mailing the loss mitigation personnel.
By: Austin Kilgore, www.originationnews.com
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