Much Yet to Do Lenders Making Progress on Short Sales, Survey Shows By Wendy Silver-Hale, President, and David Walker Southland Regional Association of Realtors® Lenders have made progress when it comes to processing short sales, yet the gains have been incremental with plenty of pitfalls and delays that still doom too many transactions. at was the conclusion of a recent survey of Realtors statewide reported by the California Association of Realtors. e bottom line? Lenders still have a long way to go, according to findings from the latest Lender Satisfaction Survey. Sixty-four percent of California Real- tors said they still had difficulty in closing short sales. at’s a marked improvement from the ADVERTISING SUPPLEMENT THE VOICE FOR REAL ESTATE IN THE SAN FERNANDO AND SANTA CLARITA VALLEYS www.SRAR.com | Real Estate Questions? E-mail Wendy Silver-Hale, SRAR 2012 President, c/o [email protected] Wendy Silver-Hale 2012 SRAR President FREE - Take full advantage of property-centric data, advanced mapping capabilities, market and trend data, custom configuration options, and enhanced professional reports. FREE - Generate, for your buyers and sellers, the most comprehensive, informative, personalized, and eye- catching reports in real estate. Includes three report sets; including a buyer tour, a single property report, and of course, real estate's most innovative CMA. FREE - an online real estate library that provides members with valuable data on every property in the United States - create custom reports to provide to clients and customers. FREE - allows you to set up client accounts. As a result, your clients can search for listing data which allows you to manage and keep updated on your clients’ every need. FREE - a B2B platform where you can share real estate listings with other professional organizations worldwide. SRAR offers a wide array of training oppor- tunities, including certification courses, continuing education credit courses, desig- nation courses, and hands-on technology training. We can even conduct training in your office. See the calendar on SRAR.com for a full list. Training & Education FREE - CRISNet Members have access to live tech support Monday thru Saturday. Tech Support Member Benefits FREE - Listing Syndication system advertises your listings across 300+ public listing search sites. FREE Basic Website, FREE Basic IDX, and FREE Basic Mobile IDX. FREE - provides mobile technology tools (QR codes) that allow real estate agents to deliver property information to a buyer's cell phone while they are standing at the property or on-the-go. The agent is optionally notified after each request. Wendy Silver-Hale, center, president of the Southland Regional Association of Realtors, presents a grant check in the amount of $2,000 to Mrs. Brenton Worle, right. She was represented by Realtor Bonnie Green, left, and was one of multiple recipients of the Association’s highly popular First-time Homebuyer Grant Program. The grants, which need not be repaid, help pay the closing costs in the purchase of a Valley home. They are available through the Association’s charitable foundation and the California As- sociation of Realtors Housing Affordability Fund. All grants have been awarded for 2012. A new program is expected to launch early in 2013. Added Credit Data Can Boost Loan Chances More applicants could qualify for a mortgage if lenders took a broader look at an applicant’s credit data, according to a new report issued Wednesday by CEB TowerGroup, commissioned by CoreLogic. Alternative credit data or extra credit information — like an applicant’s unse- cured credit, payday lending, and prop- erty history — are good indicators of an applicant’s true credit risk, and taking into account such additional informa- tion could help increase the number of people who qualify for mortgages, the study found. e study evaluated CoreLogic’s newly launched FICO Mortgage Score Powered, which takes into account supplemental credit data, and compared it to the traditional FICO score. e study found that both scores were ac- curate predictors of credit risk. “Traditional credit data and analytics continue to be relevant, but are not suffi- cient to satisfy the consumer credit refor- mation of today,” says Craig Focardi, the CEB TowerGroup’s senior research director. “As a result of the changes in consumer behavior, lenders cannot revert back to their prior mortgage underwriting policies. Too much damage has already been done to the market, consumers, shareholders, and investors.” Before the recession, consumers would focus on paying off mortgage debts first, but now consumers focus more on paying other debts, such as credit card bills and car payments, as their chief priority. e study notes that if lenders adjusted their credit risk evaluation policies, they’d be able to better assess an applicant and determine whether they are a good candidate for a mortgage. Seventy percent of those evaluated in the study saw their credit score improve by taking into account alternative data. What’s more, a separate analysis showed that of 300,000 mortgage applicants, 3,100 of those applicants would receive a qualifying credit score of 700 using the supplemental credit data. e alternative credit informa- tion could particularly help mortgage applicants who have newly established credit files with good credit, those with limited information in their credit files, but who have good alternative credit payment histories, and long-time renters who have no serious payment issues, according to the study. Short Sales Can Still So Easily Fall Apart The number of short sales has surged in recent years, yet plenty of challenges along the way can derail the transaction. Real estate professionals said that nego- tiations remain a sticking point in short sales — where the lender agrees to take a price lower than the outstanding loan. Part of the problem is because sellers can agree to any amount on a home sale, but it’s the lender who ultimately has the final say. Compounding the is- sue, many lenders also remain reluctant to even discuss a short sale with a seller until a purchase contract is in place. at means the buyer who makes the first offer may be a guinea pig, because nobody knows whether the lender will even accept a short sale offer, the Los Angeles Times reported on Oct. 28. Sometimes short sales are listed at a ridiculously low price to start getting offers in and to begin the negotiations with the lender. Yet even if a lender initially approves a short sale, it’s not fully binding and the lender can still easily back out of the transaction. Realtors Pick Another Grant Recipient 70 percent dissatisfaction rate in 2010 and 77 percent in 2011. e survey gauges Realtors’ experience working with lenders in their most recent short sale transaction – a transaction in which a homeowner with a demonstrated hardship negotiates with the lender to ac- cept less than the balance owed on the mortgage. e most noticeable improvement came from the Realtors who reported short sales as “extremely difficult,” dropping from 56 per- cent in 2011 to 34 percent in 2012. “While it’s encouraging that lend- ers and servicers are making headway in improving their short sale processes, they still have more work to do to ensure that not only Realtors, but also home sellers and buyers have a better experience when dealing with short sales,” said C.A.R. President LeFrancis Arnold. Recent changes announced by the Federal Housing Finance Agency to align Fannie Mae and Freddie Mac short sale guidelines will allow lenders and servicers to quickly and more easily qualify bor- rowers for a short sale. e changes are expected to further improve the process. “C.A.R. has long advocated for a stan- dardized short sale process,” Arnold said. “Agreeing to a more standardized process may be the best way for banks, servicers, Realtors, and homeowners to facilitate the sale of homes that qualify.” Communication issues also continued to be the main source of Realtors’ short sale transaction difficulties. Communication issues included: • Lenders’ slow response time to a short sale package, cited by 67 percent of Real- tors in 2012, up slightly from 66 percent in 2011; • Poor communication with lender rep- resentatives, cited by 55 percent in 2012, unchanged from 2011, and; • Repeated requests for documentation, cited by 50 percent of Realtors, down from 51 percent in 2011. Eight percent of Realtors reported that the lender foreclosed on the home before the short sale transaction could be com- pleted, down from 15 percent in 2011. Overall satisfaction in working with lenders in short sales improved over the past year, with 59 percent expressing dissatisfaction, down from 75 percent in 2011. Additionally, more than six in ten Real- tors said they would not refer buyers to the lender for future home purchases, down from 78 percent in 2011. “With short sales being a better op- tion than foreclosure for both struggling homeowners and lenders,” Arnold said, “it’s important that lenders continue to improve their processes so that losses incurred by homeowners, lenders, and taxpayers are limited.” e Southland Regional Association of Realtors® is one of the largest local trade associations in the nation with more than 9,000 members serving the San Fernando and Santa Clarita valleys. A standardized ‘short sale’ process would facilitate the sale of homes that qualify.
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Much Yet to Do
Lenders Making Progress on Short Sales, Survey Shows
By Wendy Silver-Hale, President, and David WalkerSouthland Regional Association of Realtors®
Lenders have made progress when it comes to processing short sales, yet the gains have been incremental with plenty of pitfalls and delays that still doom too many transactions.That was the conclusion of a recent survey of Realtors statewide reported by the California Association of Realtors.The bottom line? Lenders still have a long way to go, according to findings from the latest Lender Satisfaction Survey.
Sixty-four percent of California Real-tors said they still had difficulty in closing short sales.
That’s a marked improvement from the
ADVERTISING SUPPLEMENT
The Voice FoR Real esTaTe in The san FeRnando and sanTa claRiTa Valleyswww.sRaR.com | Real Estate Questions? E-mail Wendy Silver-Hale, SRAR 2012 President, c/o [email protected]
Wendy silver-hale2012 SRAR President
FREE - Take full advantage of property-centric data, advanced mapping capabilities, market and trend data, custom configuration options, and enhanced professional reports.
FREE - Generate, for your buyers and sellers, the most comprehensive, informative, personalized, and eye-catching reports in real estate. Includes three report sets;including a buyer tour, a single property report, and of course,real estate's most innovative CMA.
FREE - an online real estate library that provides members with valuable data on every property in the United States - createcustom reports to provide to clients and customers.
FREE - allows you to set up client accounts. As a result, your clients can search for listing data which allows you to manage and keep updated on your clients’ every need.
FREE - a B2B platform where you can share real estate listings with otherprofessional organizations worldwide.
SRAR offers a wide array of training oppor- tunities, including certification courses, continuing education credit courses, desig-nation courses, and hands-on technology training. We can evenconduct training in your office. See the calendar on SRAR.comfor a full list.
Training &Education
FREE - CRISNet Members have access to live tech support Monday thru Saturday.Tech Support
Member Benefits
FREE - Listing Syndication system advertises your listings across 300+ public listing search sites.
FREE Basic Website, FREE Basic IDX,and FREE Basic Mobile IDX.
FREE - provides mobile technology tools (QR codes) that allow real estate agents to deliver property information to a buyer's cell phonewhile they are standing at the property or on-the-go. The agentis optionally notified after each request.
Wendy Silver-Hale, center, president of the Southland Regional Association of Realtors, presents a grant check in the amount of $2,000 to Mrs. Brenton Worle, right. She was represented by Realtor Bonnie Green, left, and was one of multiple recipients of the Association’s highly popular First-time Homebuyer Grant Program. The grants, which need not be repaid, help pay the closing costs in the purchase of a Valley home. They are available through the Association’s charitable foundation and the California As-sociation of Realtors Housing Affordability Fund. All grants have been awarded for 2012. A new program is expected to launch early in 2013.
added credit data can Boost loan chancesMore applicants could qualify for a mortgage if lenders took a broader look at an applicant’s credit data, according to a new report issued Wednesday by CEB TowerGroup, commissioned by CoreLogic. Alternative credit data or extra credit information — like an applicant’s unse-cured credit, payday lending, and prop-erty history — are good indicators of an applicant’s true credit risk, and taking into account such additional informa-tion could help increase the number of people who qualify for mortgages, the study found.
The study evaluated CoreLogic’s newly launched FICO Mortgage Score Powered, which takes into account supplemental credit data, and compared it to the traditional FICO score. The study found that both scores were ac-curate predictors of credit risk.
“Traditional credit data and analytics continue to be relevant, but are not suffi-cient to satisfy the consumer credit refor-mation of today,” says Craig Focardi, the CEB TowerGroup’s senior research
director. “As a result of the changes in consumer behavior, lenders cannot revert back to their prior mortgage underwriting policies. Too much damage has already been done to the market, consumers, shareholders, and investors.”
Before the recession, consumers would focus on paying off mortgage debts first, but now consumers focus more on paying other debts, such as credit card bills and car payments, as their chief priority.
The study notes that if lenders adjusted their credit risk evaluation policies, they’d be able to better assess an applicant and determine whether they are a good candidate for a mortgage.
Seventy percent of those evaluated in the study saw their credit score improve by taking into account alternative data. What’s more, a separate analysis showed that of 300,000 mortgage applicants, 3,100 of those applicants would receive a qualifying credit score of 700 using the supplemental credit data.
The alternative credit informa-tion could particularly help mortgage applicants who have newly established credit files with good credit, those with limited information in their credit files, but who have good alternative credit payment histories, and long-time renters who have no serious payment issues, according to the study.
short sales can still so easily Fall apartThe number of short sales has surged in recent years, yet plenty of challenges along the way can derail the transaction.Real estate professionals said that nego-tiations remain a sticking point in short sales — where the lender agrees to take a price lower than the outstanding loan.
Part of the problem is because sellers can agree to any amount on a home sale, but it’s the lender who ultimately has the final say. Compounding the is-sue, many lenders also remain reluctant to even discuss a short sale with a seller until a purchase contract is in place.
That means the buyer who makes the first offer may be a guinea pig, because nobody knows whether the lender will even accept a short sale offer, the Los Angeles Times reported on Oct. 28.
Sometimes short sales are listed at a ridiculously low price to start getting offers in and to begin the negotiations with the lender.
Yet even if a lender initially approves a short sale, it’s not fully binding and the lender can still easily back out of the transaction.
Realtors Pick another Grant Recipient
70 percent dissatisfaction rate in 2010 and 77 percent in 2011.
The survey gauges Realtors’ experience working with lenders in their most recent short sale transaction – a transaction in which a homeowner with a demonstrated hardship negotiates with the lender to ac-cept less than the balance owed on the mortgage.
The most noticeable improvement came from the Realtors who reported short sales as “extremely difficult,” dropping from 56 per-cent in 2011 to 34 percent in 2012.
“While it’s encouraging that lend-ers and servicers are making headway in improving their short sale processes, they still have more work to do to ensure that not only Realtors, but also home sellers and buyers have a better experience when dealing with short sales,” said C.A.R. President LeFrancis Arnold.
Recent changes announced by the
Federal Housing Finance Agency to align Fannie Mae and Freddie Mac short sale guidelines will allow lenders and servicers to quickly and more easily qualify bor-rowers for a short sale. The changes are expected to further improve the process.
“C.A.R. has long advocated for a stan-
dardized short sale process,” Arnold said. “Agreeing to a more standardized process may be the best way for banks, servicers, Realtors, and homeowners to facilitate the sale of homes that qualify.”
Communication issues also continued to be the main source of Realtors’ short sale transaction difficulties.
Communication issues included: • Lenders’ slow response time to a short
sale package, cited by 67 percent of Real-tors in 2012, up slightly from 66 percent in 2011;
• Poor communication with lender rep-resentatives, cited by 55 percent in 2012, unchanged from 2011, and;
• Repeated requests for documentation, cited by 50 percent of Realtors, down from 51 percent in 2011.
Eight percent of Realtors reported that the lender foreclosed on the home before the short sale transaction could be com-pleted, down from 15 percent in 2011.
Overall satisfaction in working with lenders in short sales improved over the past year, with 59 percent expressing dissatisfaction, down from 75 percent in 2011.
Additionally, more than six in ten Real-tors said they would not refer buyers to the lender for future home purchases, down from 78 percent in 2011.
“With short sales being a better op-tion than foreclosure for both struggling homeowners and lenders,” Arnold said, “it’s important that lenders continue to improve their processes so that losses incurred by homeowners, lenders, and taxpayers are limited.”The Southland Regional Association of Realtors® is one of the largest local trade associations in the nation with more than 9,000 members serving the San Fernando and Santa Clarita valleys.
A standardized ‘short sale’ process would facilitate the
sale of homes that qualify.
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