RISMEDIA, March 11, 2010—It’s not likely anything could surprise us as much as the sheer magnitude of the slowdown we’re experiencing. Just be prepared for anything going forward.
If you made adjustments and found some stability in 2009, then you’re probably seeing—and can expect—more of the same this year. If you struggled last year, it will likely get harder unless you’re able to adapt to the market as it is. As you continue to power through and find new ways to work in a changed economy, stay aware of these challenges at the forefront and seek out resources that could positively affect your ability to serve your clients.
Short Sales
The U.S. Treasury Department’s new guidelines on short sales, announced in November, include better protection for you and the consumers involved. The policies represent a good step forward, and they’ll prove to be even more so in April when banks are required to have a compliant short sale plan in place to participate in the Home Affordable Foreclosure Alternatives (HAFA) program. The rules for participating banks include a 10-day window to accept or reject offers and a $1,000 incentive for each closed short sale. However, the most valuable currency for negotiating short sales will remain a competitive offer and a complete, well-organized short sale document packet for the servicer.
Loan Modifications
Unfortunately, loan modifications are being implemented at an extremely slow pace. The Obama Administration reports that in 2009 only 66,000 loans were permanently modified, a tiny portion of the more than 900,000 submitted for consideration. With 350,000 properties defaulting each month in the U.S., it’s in everyone’s best interest to keep people in their homes and their properties off the already flooded market. And if job growth occurs as promised in 2010, loan modifications may be viewed as a good fit for people who are getting back to work and have enough income to keep current on their mortgage.
Jumbo Loans
In recent months, the nearly dry jumbo loan faucet has been turned on—but only to a slow drip. Until banks open it wider, there’s little chance of making a dent in the roughly 40-month supply of inventory above $729,500. Qualified buyers capable of making a 20% down payment but unable to secure financing are sitting on the sidelines eager to join the game.
Don’t let the hard facts deter you. If anything, they should motivate you to push harder on behalf of your clients and yourself. As the industry continues to tackle these challenges throughout the year, move forward with your eyes wide open. Then you’re more likely to see a full recovery in your business long before the downturn is deemed officially behind us.
Margaret Kelly, CRB, is chief executive officer of RE/MAX International, Inc.
For more information, visit www.remax.com.
