How Stuff Works at NAR

Nice comment Bob.

This topic is just hilarious. I would probably have to add my opt which is that in an entire section of this post titled “NAR Acted,” I seem to have missed the action part.

Seems to me like they RE-acted. They took a bunch of high profile REALTORS, took them away from a day or two of work, in order to come to a conclusion that everyone has known for years.

Short sale is a better way for everyone to do business, not just the Government, even if the only reason was for all of the paper it would save. There is another anti-trust case on the horizon, count on it.

The long and the short of all of this is that with the internet and more importantly GOOGLE, there in no longer a need for the NAR. With the way that the industry is shifting there is no way for them to reasonably justify the false sense of security and the money they extort from hard working salespeople for a well marketed WORD & pin with the WORD on it.

Pop Quiz:

What’s the difference between a REALTOR and a Real Estate Salesperson?

NOTHING!

Bob:
I would suggest that several of the points you made are less than accurate;
1. You imply that the pilot program to be set up by Fannie Mae would mirror their REO value requirements. There is no reason to believe your statement to be accurate. We’re talking about short sales not REOs (and before you question that statement- I would point out that I have been selling Fannie Mae REO properties for 20 years and am familiar intimately familiar with that valuation process- it just doesn’t apply to what I was talking about)
2. You stated “OK, so they are going to put on short sale 101, that doesn’t change anything.” Notwithstanding your perception, there are a huge number of real estate professionals who need education and information about short sales. Personally I think that additional education for people in our business does change things drastically. I also think that Freddie taking that initiative indicates a clear willingness on their part to encourage lenders to participate in short sales rather than forcing properties through the foreclosure process
3. You the say “The MBA has no say or leverage in the short sale process. What is the point of this?” Obviously you have not thought through the problem of dealing with the large number of lenders that are dealing with short sales across the country. Since they are all independent businesses, it is difficult to get them to act in concert. Their trade association however, could potentially generate standards which if adopted by their members, could create a consistent pattern for short sales, making the process more uniform, and thereby more accessible to real estate professionals and consumers.

One of the big problems we face in trying to do a successful short sale is that each lender has different ways of addressing the situation. Though you later suggest that we should bring is attorneys and Attorney Generals in the different states, I don’t think you fully appreciate how ineffective that would be. There is no uniformity in the states regulations, and the Attorney Generals would therefore be unable to generate uniformity in their responses. And what you think attorneys could do is beyond me – aside from there not being a client for them to represent, I don’t see the what they could do other than initiate litigation (the point of which is not obvious to me, but is a solution that would be not only be ineffective but time consuming and expensive)

4. You make a statement that I have to totally disagree with “I understand that the NAR is not faceless, but the 4 examples you gave provide no value to the 20+ short sales I’m dealing with now and illustrate the pie in the sky approach NAR continues to take.” The approach here was not “Pie in the Sky” and the job of the work group was not to help you with your 20 sort sales – it was to identify that issues facing practitioners, and come up with suggestions for dealing with them. Oddly enough the work group did what is was convened to do.

5. You then said “NAR asking a debt collector to define the process is absurd. ” NAR is not asking a debt collector to “define the process” NAR is providing information from a debt collector to its members which they can then use to best serve their clients – And since one of the biggest problem real estate professionals face in this process is the lack of information from lenders, NAR is helping its members if they are able to compile links to this information in one place.

6. You then make the following point – to which I take exception
“The fact that a NAR committee like this is made up of working Realtors doesn’t mean much to me for two reasons:
1) I don’t know their knowledge base or expertise with a)laws, b)tax issues and c) myriad of variant policies with the many different lenders and servicers.
2) I don’t know how they approach their business.

The latter is important because of the inherent conflicts of interest presented by short sales. ”

To begin with, if you want to be the one to decide who gets put on a committee or work group at NAR, you have to start by being part of the leadership at NAR. That would involve spending time as a volunteer, earning the respect of the other people in the leadership of NAR, and then earning the right to be appointed to groups like this.

That being said, you need to understand that when the work group was convened, it was not made up of random participants, any more than any other committee or work group that is placed into action by NAR. This work group was hand picked from a number of appropriate committees, and was an exceptionally experienced and qualified group of working REALTORS – I was the chair of the work group with almost 21 years of REO & Short Sale experience, 37 years of real estate experience, the 2008 chair of Pro Standards, and a member of the Risk Management committee that initiated the request for the work group. In addition I have been a real estate instructor in my state for over 30 years and I am also a member of REOMAC (an organization dedicated to default management) and because of my background have thorough experience in dealing with national and regional lenders through their corporate offices. Every person in that group had substantial REO and short sale experience- several of the participants were also attorneys, and several came from states like California, Arizona and Florida where short sale issues were rampant. They came from a wide variety of companies and business models, but were all focused on the problems facing the industry and applied their considerable expertise to working on them.

And BTW There is no inherent conflict of interest for a group to approach the short sale process. If you want to articulate the conflict of interest that you feel is inherent, I will be glad to show you where you are wrong – and why whatever you have in your mind is not inherent but more likely the function of a fixed set of circumstances that you have created to develop that conflict.

And your final paragraph needs an answer that is more complete – you said

“The most distressing omission was the lack of any reference to legal and tax issues. While we can’t give legal and tax advice, having a clue about them should be the absolute starting point for a Realtor. The short sale needs to be seen as a consumer protection tool for those where it would serve that purpose, not as the attractive low hanging fruit, as it is arguably the most difficult and liability laden transaction we do”

There was no reference to tax or legal issues because they have nothing to do with the post, written about what NAR was doing – and the short sale is not a consumer protection tool. We are possibly facilitating a result that may be preferential to a foreclosure (though legal and tax advice would need to be sought prior to that determination) but we are certainly not protecting consumers from anything. Neither my post, nor NAR’s efforts to help its members and the public indicate that anyone besides yourself has that viewpoint. As far as its being difficult and liability laden, I would agree that they may be difficult (though they may not be the most difficult- that would depend upon your experience) but in terms of liability, NAR’s efforts worked to reduce member’s liability through education and information gathering – and a properly educated real estate professional is his or her own best safeguard against liability.

Lisa – Thanks – Gotta Love a Girl from the Poconos!
😉

Bob;
Let me review your points as you clarify them;

You didn’t say that Fannie would change how they value short sales. You said it would speed it up. How? As of Sept. 1st, Fannie now requires two opinions of value. Their valuations are based on BPOs and appraisals. How will sharing MLS data make a difference? Is someone at Fannie or Freddie going to do a desktop review of a field valuation using the same MLS info the BPO agent or appraiser used? How will that speed anything up?

Fannie indicated that they would be able to use the information to assist them in speeding up the process – the details to that I would leave with them. Their effort and assurance that they would do so should be sufficient. Again their determination of value and what is need to determine value is internal to them and the decision how to do so is in their hands. Your stating that they have to have something doesn’t mean that they are compelled to follow your direction.

2) I won’t argue that agents need more education, but teach them what? Fannie and Freddie handle short sales differently than other investors, or even the FDIC for that matter.

Freddie wanted to teach them how to handle short sales that involve Freddie loans – since that’s about 10% of the housing stock it would strike me as a reasonable education effort. Other than bashing someone else’s efforts, I don’t understand why you would be critical of that.

Does NAR honestly think that a psuedo organization like the MBA will have the ability to require anything when the Feds can’t even do anything? Maybe down the road member lenders will adopt something, but today, dealing with loans already sold & resold, or sliced and diced into mortgage back securities, the MBA cant do anything, let along streamline a process where the players are way bigger than the MBA.

I don’t know what a pseudo-organization is, and I really don’t think you do either – its just an example of words that sound like they might mean something, however let me answer this question. As a trade organization, the MBA creates a single entry to discuss an issue with their many members, who could then voluntarily agree to create a uniform program, or agree upon standards that they would all comply with. It is easier to gain compliance from people voluntarily than it is to try to legislate that compliance, and much quicker, since there is no need to promulgate laws or regulations and have them approved or passed.

I said: “One of the big problems we face in trying to do a successful short sale is that each lender has different ways of addressing the situation. Though you later suggest that we should bring is attorneys and Attorney Generals in the different states, I don’t think you fully appreciate how ineffective that would be. “
To Which You responded “You stated later that there were attorneys involved, so why are you arguing that their involvement would be ineffective?”

This is just an out of context response – Your suggestion was that somehow attorneys were needed to resolve the short sale issue. I still don’t understand what you think that would accomplish – My mention of attorneys was in response to your question as to the background of the individuals on the workgroup, noting that some of them were attorneys since you were concerned about the legal implications of any effort. I will repeat that I don’t understand how you think attorneys could accomplish something in this arena, and what that has to do with NAR’s efforts.

I don’t expect uniformity in the responses of the AGs or lawyers schooled in the various state legal differences. That fact that no uniformity exists is the reason the need for their input. Where I was going with that was that without understanding the vagaries of the laws in 50 different states, NAR’s goal of trying to streamline a process, even at the educational level, is impossible. NAR can’t even come up with a sample HUD that would be accurate for one lender in different states.

This one is just fuzzy thinking. First of all the lack of uniformity would mean 50 different people working on fifty different solutions with 50 different perspectives and political agendas, that would only impact their area. In addition, holding the post of Attorney General doesn’t indicate any understanding of the short sale process or the issues of the real estate or mortgage industry. Our members indicated a need for means to address this problem in a national manner because we are a national organization. In addition, this is not an issue that could be effectively legislated in that manner. Secondly, while I agree with you that NAR is unable to streamline this process (because we are not the people in control of the process) . I do not agree that NAR cannot provide effective education for our members. Finally, your last sentence is again just uninformed and not relevant to the conversation – the HUD-1 is a form developed by the Department of Housing and Urban Development – NAR is not involved in its development or approval of its development- it’s a Federal Form mandated by a Federal Law – RESPA.

More importantly though, who is filtering the info provided by the lender to determine what is in the best interest of the borrower?

Nobody – that’s not the purpose, nor do I think it is even an issue. If they provide information we can determine what we may use.

in terms of liability, NAR’s efforts worked to reduce member’s liability through education and information gathering
I do not understand this statement at all. How so?

As I said before an educated real estate professional is the best risk reduction measure in the world.

I do appreciate the effort, Bill, but the problem is systemic, and goes deeper than NAR is digging. Until NAR decides to play hardball, you guys are wasting your time. Instead of freezing in Chicago, go to Capital Hill and educate the lawmakers as to how these lenders are playing games. You have a mob of legislators armed with $700b looking for ways to make their bones. Or go to Sacramento, California and push them to extend the mortgage debt forgiveness law on non-recourse acquisition debt past Dec 31, 2008. As it stands now, on New Years Day, 2009, many short sale sellers will be forced to choose the lesser of two financial evils and opt for foreclosure instead of a CA state tax bill.

And here we acknowledge (backhandedly) that the efforts fueled by RPAC are important to the industry, and are another important function of NAR. However the decision to lobby for anything on a state level is made there and on a national level by NAR. If you want to impact that, participate in CAR and NAR, and move in that direction. I assume that you make a large RPAC contribution as I do every year so that your money is where your mouth is.
In your answer to Lisa Sanderson you said;

Are either one of you doing anything to help us get where we need to be?
Yes Lisa, I am. I meet with lawmakers. I met with someone from the AGs office. I had a conference call last week with a senior VP from CW where I was able to point out that their 90 day policy was being abused. If you knew me, you would know that i don’t sit back and bitch. I suffer from a Don Quixote complex and i tilt a windmills. I educate agents and consumers alike. I have a series of blogs posts on short sales that have generated over 1000 comments.

Exactly how does that help anyone except you? What impact to the national issue doe your blog or its 1000 comments have? Does you ego lead you to believe that you are the only real estate professional speaking with senior executives at different companies around the country? Or that the conversation somehow affects the entire industry? Do you think the fact that you pointed out a flaw in the system of one lender will motivate that lender to do anything that they don’t want to do voluntarily? (and if your answer is that they may make the change voluntarily, then your argument about reaching out to the MBA falls to a grinding halt) Or do you imagine that your individual private efforts are more significant to the greater good of the industry than the efforts of the volunteers and staff at NAR? Or even that your efforts are aimed at doing that rather than solving your individual problems?

I’m also sorry that you can’t handle feedback or a dissenting opinion of which we’re all entitled.

Untrue- I have no problem with dissenting opinions at all and am happy to engage in dialogue. I just demand that you make sense and speak the truth. Not being aware of what you have done to “provide me with the blanket of freedom I sleep under”, or what any military service would have to do with your NAR bashing, I won’t respond, but I will point out that I and the other volunteers at NAR do “pick up a weapon and stand a post “ in defense of our industry and our profession. In this instance it is you who do not serve but criticize – however I do enjoy a good Mamet quote – not matter how inappropriate
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Bob:

You said:

Bill, I went after your points, not you. But obviously when NAR’s positions are critiqued, then the tack is to go after the ‘NAR basher’.

That’s just disingenuous. In your earlier reply you said, “ I’m also sorry that you can’t handle feedback or a dissenting opinion of which we’re all entitled.” And that statement was framed just before you choose an inappropriate quote to make yourself seem superior However I have not and will not attack you personally. I just think that your response shows a lack of global view. Your comments and experiences are specific to your state, your attorney general, and your needs, rather than to the needs of the larger community.
In your last response you say;

Fannie, Freddie, or any other lender teaching agents how to handle short sales isn’t an answer because the problem is how Freddie and Fannie handle short sales. None of what you have stated addresses that.
Wells providing info is great, but it’s already available. It doesn’t change anything with regard to Wells’ refusal to do short sales with some of their loan servicers.

This doesn’t minimize NAR’s efforts, it merely shows that there is still more to do. To go back to the point of the post – NAR was aksed to act by their members, NAR acted on that request and took steps to help their members. The Workgroup pointed out some places where we might start to get a handle on the problem and the lenders we spoke to listened to their voices because NAR was involved, and the voice of all of the members is greater than the voice of any individual.
You also state;

Instead of NAR asking the lenders to show us the ropes, what we need is the ability to show them the ropes. Make it known to those in the right places where their processes are broken, or having unintended consequences.
We all have seen buyers walk because the approval is taking to long. So what happens when you have a Fannie short sale and the buyer walks prior to approval, but you then get another buyer? The process goes back to square one and another 30-45 days. This happens even if the terms and HUD1 are exactly the same. Treating it more like an REO where the approval isn’t specific to just one buyer would shave 30 days off many deals.

Actually NAR is busy working with the lenders making them aware of what we perceive as the problems in the systems. However there is no single place to fix the problem because there are (as I pointed out in my last response) many independent companies involved in the problem. Again, it doesn’t diminish what NAR is doing or has done, and should not detract from the credit they should receive for attempting to address the problem as best they can. Nothing you mention here is new, and all of it was considered by the committee, but as a group we realized that what we wish would happen, and what we can make happen are often different things. We went for what we could make happen.
You then responded to a question of mine without answering it.

I asked – “Do you think the fact that you pointed out a flaw in the system of one lender will motivate that lender to do anything that they don’t want to do voluntarily?”
You responded, “No. However you assume that is what happened. The meeting was put together at the behest of someone at CW because we made them aware of the liability exposure this ‘aging’ policy created. This opened CW up to class action bad faith lawsuits, in addition to providing AG with more evidence for their own suit against CW. It is the legitimate threat of legal action that brings about change at this juncture – that and the threat of the Henry Waxmans in Congress who want more accountability and oversight. Do you still not see how that involves leverage applied from the legal side of things? Every lender is relying on their legal team to minimize what they have to do. For us not to be as equally well armed is naive.”

Even in your response, you are talking about one case, and what you perceive to have been the motivation of one lender in one state. It is a huge leap from that incident to a cure for a problem, especially when that cure boils down to threatening every lender with a different law suit in every state.

You and Lisa have both attacked me for not serving. I am not a NAR foot soldier, but like others who have lost some faith in NAR, we can bring about change via other channels. I used my files as examples and you have twisted it to appear that I’m motivated for purely selfish reasons. That disappointed me. It isn’t about only my sellers, but about all the short sale transactions people at CW outside of the short sale department are seeing fail for no apparent reason. If I can get that 90 day aging policy to be changed nationally, then yes, I’ll have had as great an impact as your last meeting. Maybe it will even help one of your clients.

I didn’t twist anything – in your response you indicate that your concern is the files you are working on. And in your response you indicate that you did what you did to resolve your issue. If it has a greater impact that’s terrific, and you should be applauded, but its more of an unintended benefit then it is a goal of your course of action. And I would submit that the term “NAR foot soldier” is another derogatory term (from the man who doesn’t attack anyone personally). I find your belief that you as an individual have more foresight and impact than the entire staff and volunteer leadership incredibly egotistical. At best it would be unseemly Hubris.
As far as criticizing you for not serving, I can only say that if you don’t serve, your criticism of those who do, or the plans they embark on is certainly lacking in impact. It is those who not only “talk the talk” but “walk the walk” that can really criticize with validity.

Again, I appreciate the effort and time, and I believe you when you say you have assembled quite the brain trust, but I whole heartedly believe that NAR is taking the wrong approach. We don’t need another suggestion making committee, but a Special Forces strike team. Go on the offensive. Document the various policies and procedures (both legal and bureaucratic) they have seen that are screwing up the process and then demand that they be corrected. Your membership would respond overwhelmingly, as would the consumer.

I can appreciate that you think NAR might have take the wrong approach. However as a representative organization, its committees must be responsible to the whole membership, and like any large organization, the first step in addressing any problem is to research the problem and make suggestions. That aside, I don’t understand what steps your “Strike Team” is going to take. How would they assemble the information you suggest that thy document? How many people would it take? Would they be staff or volunteers? How would the information be compiled? How long would they take? What states would they work in? How many lenders should they compile information on? And what right would they have to “demand they be corrected”? Your suggestion is one of those things that sounds great by the campfire, but is exceedingly difficult to actually implement.
I have no problem with you personally (though I will not allow you to be inaccurate, disingenuous, or condescending) but I think that if you participated in the group, you could be more effective than sitting outside the group and criticizing the efforts of others. In fact, a man of your passion and experience could contribute a lot I’m sure.

Bob;
I twist and pervert nothing but I did hold you accountable for the direct meaning and impact of your words.

Yes I responded to your comment to Lisa since it was part of the conversation and was reflective of your response to me.

At no time do I indicate that “only NAR and their volunteers that have the answers and are competent enough to be allowed to debate”. I did say, and still believe that any large group can be more effective in the public arena , and if you wish to debate, you should stay on point, eschew rhetoric in favor of fact.

And yes, long live Lawrence Yun, he’s a good guy, and even Long live Bob Wilson – after all why not , even if I disagree with him wouldn’t he deserve all that a long life has to offer?

Resistance is not futile – its not even part of the conversation – which started about how NAR is trying to do some positive things as a result of request of its membership – of which you are a part. NAR would listen to you too if you chose to participate with other members in their (the members) to positively impact the industry and the profession.

@bobwilson I respect your frustration with the short sale process and also admire your strong desire to assist your client’s sucessful navigation through the process.

However I have to take exception to your position on NAR. I am starting to get involved at NAR after years of volunteering at the state and local levels. I have always had a strong opinion and the Associations have often provided a forum where I could share and learn. If that qualifies me as a foot soldier then I am happy to be in such good company.

There have been times I have not agreed with an Association position. Sometimes through my involvement I was able to help sway a position into another direction and there are other instances where my position was the one that changed after hearing what my peers had to say.

Sure peer opinions vary and there are times when I get frustrated. Large organizations are not always as mobile as we would like. However it is amazing what you can accomplish through an organization such as NAR when you simply participate. Your words often turn to action if you can make a compelling case. After all I think we want the same thing here…systems that we can count on to navigate through a difficult process to ensure a better outcome.

BTW I have seen our REALTOR organizations carry and occasionally use a big stick when needed.

@BillLublin Count me in on the wall!