Recently industry experts attended a series of meetings organized by Treasury and the GSEs to discuss best practices and future strategies.
One of the attendees, Rich Rollins, CEO of National Quick Sale, Jacksonville, Fla., a provider of Web-based short sale management and workflow platforms, told this publication the meetings revealed the focus of the overall loss mitigation strategy may be shifting.
"So far the focus has been in home retention and retention strategies, and it has become apparent that those haven't been as successful as the Treasury has hoped," he said.
The new focus is on nonretention strategies of which a primary mechanism would be a short sale since short sales can be used to attract real estate investors who will lease back to the occupants and keep them in their homes, he explained.
"The issue with short sales is that there's no standardization of processes and electronically capture the data and the documents that are required in order to begin the analysis, or business rules that will help use the technology to grab all the
A technology expert, Mr. Rollins says another issue at the forefront is how to use existing technology to effectively gather, analyze and deliver loan information in an expedited fashion. "There is no uniform way of analyzing the data to see if a short sale may fit the borrower based on overall data valuation. A lot of technology will have to be employed, a lot of automation."
I stated last year that I thought foreclosures had peaked. Not because the number of homes in the foreclosure processed had peaked but because it is clear that short sales are a better way of moving the inventory IF the banks worked on resolving all the issues like what lien gets paid what amount, etc. Unfortunately it appeared the banks put zero effort into resolving these issues and can't foreclose due to political pressure and can't modify because it makes little economic sense to do so. Short sales have a benefit to the seller as well, there are loan programs that allow people to buy immediately after a short sale, I know of none that allow the same after foreclosure. A properly designed short sale strategy for the marketplace is desperately needed.. and it would be best if the recourse issues were standardized as well so the issue isn't hanging around for the next 20 years. The industry and administration really need to put a lot more effort into this avenue.