Don’t Stop the Short Sale Assistance Desk From Solving Problems
Fannie Mae set up the Short Sale Assistance Desk as a way to get a quick resolution to problems with their Short Sales. Instead of waiting months for an answer, the sellers can get issues resolved in a few days by using this escalation process.
How does it work? It only applies to loans where Fannie Mae is the investor. To find out if your loan is a Fannie Mae loan, go to www.FannieMae.com/loanlookup and put in the address of the property. If it is a Fannie Mae loan, then you may be able to use the system.
The main requirement is that the Multiple Listing Service has to cooperate with the Short Sale Assistance Desk. Fannie Mae enters into an agreement with the Multiple Listing Service where the property is located and sets up a system within the Multiple Listing Service website to implement this review procedure. There is a button placed on the MLS website to get help from the Short Sale Assistance Desk. Also, Fannie Mae provides materials to be placed in the MLS for agents to be educated on how the system works.
If there is a problem that qualifies for this escalation, the listing agent pushes the button on the MLS and initiates the process. Fannie Mae is notified of this initiation. The listing agent submits a Borrower Authorization Form created by Fannie Mae to allow Fannie Mae to talk to the agent. Also, the agent fills out an Intake Questionnaire Form that is online in the MLS. Once that is done, the Short Sale Assistance Desk receives these forms. The final step is for the Multiple Listing Service to send the information about the case to the Short Sale Assistance Desk, which is required to be submitted within two days. The Short Sale Assistance Desk will respond to the problem within two days. The story told by Marcel Bryar, Vice President of Fannie Mae, is that the people who work on the assistance desk just pick up the phone when they have reviewed the materials and talk to the listing agent. He says the response time is usually well under two days.
Getting a response to a Short Sale problem within four days! Sounds like heaven.
What issues can be reviewed? The Short Sale Assistance Desk reviews (1) a lack of a response to the Short Sale by the servicer within certain time limits (2) issues with junior liens like Home Equity Lines of Credit (HELOC) and (3) problems with mortgage insurance.
In order to be eligible (1) the loan has to be a Fannie Mae loan (2) a signed contract to purchase the property and a complete Short Sale package must be submitted to the servicer (3) the listing agent must be a member of an MLS that has partnered with the Short Sale Assistance Desk to create this system (4) the listing agent with a Borrower Authorization Form communicates with the Short Sale Assistance Desk. Under this last requirement, the buyer’s agent or third party negotiators cannot communicate with the Short Sale Assistance desk as they want to be in touch directly with the seller’s representative.
What are the standards for this escalation? If there is no response to the Short Sale submission within 20 days, the listing agent can initiate the Short Sale Assistance Desk review. A response does not have to be an approval or a denial of the offer, just an indication that the servicer has the package and some indication of the process that will be used to review the Short Sale. If there is no property valuation done within 30 days of the submission of the short sale package, the listing agent can escalate to the Short Sale Assistance Desk. If there is no final decision on the Short Sale within 60 days of the original submission of the Short Sale contract and package, the listing agent can use the Short Sale Assistance Desk. Finally, if the loan servicer has approved the Short Sale, but there are issues with any junior liens (like HELOCs) or with mortgage insurance, then the listing agent can use the Short Sale Assistance Desk process.
What is the biggest item that is resolved by this system? Incorrect opinions on the value of the property being sold are the most frequent correction. For example, the servicer is turning down the proposed Short Sale saying that the sales price is too low. The listing agent contacts the Short Sale Assistance Desk. The Short Sale Assistance Desk looks at the data in the Multiple Listing Service and determines that the appraisal or Broker Price Opinion (BPO) is wrong. The Short Sale Assistance Desk works with the servicer to approve the short sale and the property moves on toward a sale that closes.
What is the biggest problem that the Short Sale Assistance Desk has with Realtors? They have not submitted a complete Short Sale package, then they initiate the process. If the hold up is caused by a failure of the listing agents to give the servicer the information necessary to make a decision on the Short Sale, the Short Sale Assistance Desk can help but that is a lot of work to tell the listing agents what they should have heard from the servicer. In other words, to make the system work well, the listing agents need to try to work the issues out with the servicer before initiating the review by the Short Sale Assistance Desk.
So, why isn’t this system moving multitudes of Fannie Mae short sales to a decision in record time? Because many Multiple Listing Services are not cooperating. For example, the Triangle Multiple Listing Service that covers the middle of North Carolina and the Carolina Multiple Listing Services that covers the Charlotte area do not have this system in place. This means that Short Sales in many of the properties in North Carolina cannot benefit from this system. One objection by some Multiple Listing Services is the cost of implementing the system. However, organizations like the California Association of Realtors (CAR) have a turn key set up to implement the Short Sale Assistance Desk system that is low cost.
The main objection is that some Multiple Listing Services do not want to give Fannie Mae access to its data, saying that is proprietary to the MLS. If you are old enough to remember the MLS Listing Book, you will remember how that information was proprietary to the MLS and no one could have access to the listings. I fought many battles with several Multiple Listing Services to allow my websites to display all the properties that were for sale. After years of battle, the real estate industry found that providing this information to the consumers was better for the buyers, the sellers and the Realtors. Now, hundreds of websites across America provide the consumer with every property that is for sale. Is this the same battle fought by the same old guard that is out of touch with technology and the needs of modern America?
Fannie Mae will only use this information to review specific Short Sales. In other words, the informaiton is not being made available to the public. It is only going to make the information on properties for sale and closed sales available to the Short Sale Assistance Desk. This is similar to letting a judge look at confidential information that is necessary for a court’s decision. The judge uses it only for legitimate purposes and a better decision is rendered.
You can see the complete lack of merit in this position by uncooperative Multiple Listing Services by walking through the process. Let’s say I have a short sale on the property at 123 Main Street in Cary, North Carolina. I go into the MLS and print out every property that has anything to do with the value of that property. As a member of the MLS, I am entitled to get access to that information. Next, I scan it and send it to the Short Sale Assistance Desk. That is also perfectly legal. So, I can give the Short Sale Assistance Desk everything it needs, but it is in a manner that is much more difficult to use because the printed version cannot be directly input into their automated valuation models used by Fannie Mae. If Fannie Mae had a huge number of data entry clerks, they could input my printed information and make the system work. If I can send the Short Sale Assistance Desk the same information, is there any merit to the MLS refusal to cooperate?
What happens if the MLS does not work together with the Short Sale Assistance Desk? Errors in the short sale process will not be corrected, so more Short Sales will be disapproved. Also, the Realtors will not have Fannie Mae’s assistance in negotiating with junior lien holders and mortgage insurance companies, so more Short Sales will be unsuccessful. A failed Short Sale means another foreclosure. The foreclosure is a disaster for the seller/borrower and much worse on the neighborhood. In other words, the result of the failure to cooperate by the MLS is the destruction of more neighborhoods and more harm to families in trouble. What is the benefit from this failure to cooperate? I cannot see any.
If your Multiple Listing Service has not set up the Short Sale Assistance Desk system, have its officers contact Fannie Mae by sending an email to SSAD_Information@fanniemae.com. The more MLS participation, the more successful Short Sales, the fewer foreclosures and the quicker the recovery of the housing market.