Thursday Sep 01 2011
Whatever happened to good old common sense?
By: Gene Thorpe Special to The News Messenger
Real estate column
First of all, I want to congratulate the city of Lincoln on having a balanced budget. That is an example of what working together in spite of differences can be. My questions are for the state and federal government and to the banks. What the heck is going on? Where is the bail-out money and what happened to our economy? Why don’t the elected officials and their staff understand the basic idea that when you don’t have the money you can’t spend it? Last Thursday at the Farmers’ Market, I asked my 7-year-old nephew what would happen if you had 20 cents and a soda was a quarter. He said, “I won’t have a soda today!” That’s the right answer. You have to pay to play. Come on guys, let’s get it together for the sake of the country! The way many people on the street see it is that most of our elected officials are so polarized with their political party’s agenda that very few are objectively working on viable solutions to the major spending issues that affect us all. And that’s a major shame. Come on, folks, let’s re-group and remember we are all Americans. Not only should many of you who are elected be ashamed of your spending and fighting and putting off the inevitable, you should be fired up about being part of the solution in these historic times. Now is the time to have courage and do what is right. Either you work and are part of the solution or you do nothing and are part of the problem. Please be quick and work together. Remember, the world is watching you. Whew, that felt good to get that off my chest. Now, I would like to direct some attention to our friends, the banks. At this time, a million-plus homes are in foreclosure and many are coming on to the market at a steady pace with many more in the wings waiting. I believe we will be seeing low prices and incredible interest rates for a while. It’s cheaper to buy than rent! I understand it is better for a bank, financially, to do a short sale as opposed to a foreclosure. We all know that the short sale process will be a part of the California real estate condition for a long time to come. Lenders’ requirements have made closing these transactions a difficult process. Here are a few ways banks could make the process better for buyers and sellers in short sales. • Provide realistic time frames and then meet those time frames. • Provide a comprehensive list of information needed upfront. • Provide approval requirements upfront that, if satisfied, would assure the borrower of a short sale approval. • Disclose whether a loan you service is owned by you or if others own it. If others own it, provide time frames for approval. Be clear on who has final authority. • Pre-approve the short sale and price upon request, prior to the property being listed. • Review and respond with an approved offer to a borrower’s short sale request within 30 days of receipt of the request. If rejected, be explicit on why and how it can be corrected. • Do not “restart” files from square one if something is missing. Allow the correction and continue, without bumping it to the back of the line. • Have a person available who can inform the borrower about the file’s status and shortcomings, and who can assist in problem-solving. • Increase the speed of processing files. Often, a single home goes through the process numerous times, resulting in months elapsing and buyers losing interest. The pre-approvals and cumulative files discussed above will dramatically assist this effort. • Increase the amount junior lienholders receive. This is a common reason why short sales fail. • When the property is cleared for sale, be explicit that there will be no recourse on the notes as required by SB 458, which now is in effect. Gene Thorpe is a former California Association of Realtors director and is the current past president of the Placer County Association of Realtors, and broker, manager of C-21 Select Real Estate here in Lincoln. You may reach him at firstname.lastname@example.org.