Wednesday
April 23, 2014

NAR: Watching Your Back

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NAR: Watching Your Back

REALTORS® brought a real-world view to government short-sale guidelines, says 2012 Business Issues Chair Iona Harrison.

The NATIONAL ASSOCIATION OF REALTORS® played a role in the creation of the HAFA program, bringing U.S. Treasury officials to the table as early as 2007 to talk about problems with the short-sale process, says Iona Harrison, 2012 chair of the association’s Business Issues Committee. “We understood early on, for example, the issues surrounding second and third liens,” she says. “Our insights into the reality of the process were key to putting guidelines in place.”

The biggest issue at the outset was getting servicers to decide whether an offer was fair, says Jeff Lischer, managing director of regulatory policy for NAR before his retirement in January. “HAFA fixes this by requiring servicers to determine the minimum acceptable net proceeds up front so the seller and broker can assess whether a short sale makes sense. Or they can negotiate for a lower number up front before wasting time on marketing at an unreasonable level.” 

Beyond HAFA, NAR has been active on a number of fronts in the past five years.

2007

NAR-supported federal provisions went into effect that relieved taxpayers of federal tax liability on mortgage debt forgiveness. That provision is scheduled to expire Dec. 31, 2012. But given the continued high volume of short sales, there will almost certainly be talk of extending it, Lischer says.

2009

At NAR’s urging, Fannie Mae and Freddie Mac reaffirmed their policies to accept the commission in the listing agreement, up to 6 percent, and made an appeals process public.

2010-11

In meetings with national lenders, NAR discussed the problems created by long short-sale timelines and encouraged policies that emphasized short sales over foreclosures where possible. “The meetings were part of our ongoing effort to get them to work. better, smarter, and faster,” Lischer says.

2011

NAR obtained assurance from the Federal Trade Commission that its Mortgage Assistance Relief Services rules, designed to curb Internet scams aimed at distressed owners, wouldn’t be enforced against real estate salespeople helping owners complete short sales.

NAR worked with the American Land Title Association to eliminate onerous provisions in a Freddie Mac–required affidavit developed to prevent fraud.

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