Short Sales Go from No Contact to A Single Point of Contact
Remember the bad old days of Short Sales, where you would call and call and not get in touch with anyone who could help you. Some servicers still have telephone systems that you cannot get through. Then, if you do get to your negotiator, you get no answer and a voice mail that is always full. Thank goodness for the Making Home Affordable guidelines, particularly Section 4 of Chapter 1 requiring a Single Point of Contract.
What is a Single Point of Contact? It is a relationship manager for the borrower who is supposed to be the contact for any information the borrower needs for any aspect of the Making Home Affordable program. Since a Home Affordable Foreclosure Alternatives (HAFA) Short Sale is a part of the Making Home Affordable program, a seller going through a HAFA Short Sale is entitled to this relationship manager. The requirement applies to all the large loan servicers.
The relationship manager must give written notice to the borrower within 5 days of being assigned as their manager, so you are supposed to find out in writing who to contract. That notice must give the borrower/seller a toll free phone number as well as one other method to directly contact their relationship manager. For example, the notice could provide the manager’s email. The notice also has to provide instructions on how to deliver any requested documents to the servicer, which eliminates the problem of the servicer telling the seller that they sent the documents to the wrong place. The relationship manager must attempt to contract the borrower/seller promptly after the assignment. The guidelines make it clear that communication with the borrower/seller includes communication with the borrower’s authorized advisor e.g. the real estate agent who has a letter of authorization on file.
The manual says “The relationship manager has primary responsibility for coordinating the servicer’s actions to resolve the borrower’s delinquency or imminent default until all available home retention and nonforeclosure liquidation options have been exhausted and for communicating those actions to the borrower.” To translate from government speak, the relationship manager works to coordinate the servicers efforts with the borrower’s efforts and explain the situation in a manner that the borrower can understand.
The single point of contract is required to (1) tell the borrower about the available options, what the borrower needs to do to make those options work, and the status of any of the borrower’s efforts (2) coordinate the documents so the borrower does not have to resubmit the same thing as well as tell the borrower if additional documents are needed (3) know the current status of the borrower’s case with the servicer and (4) coordinate with other servicer personnel (in house and outsourced) to be sure the borrower is considered for all non-foreclosure options. Just having the relationship manager know where all the documents are is worth it to me, as my team frequently sends in the same documents many times. Even more valuable is to have the single point of contact know what options are available, explain how to make them work and follow up on the seller’s progress in getting to a successful result.
If the loan goes into foreclosure after the failure of all other options, the relationship manager must be availalbe to answer the borrower/seller’s questions about the foreclosure and know where the borrower is in that process.
The servicer must give the relationship manager access to information and personnel to be able to tell the borrower what is happening with the borrower’s file in a timely manner. The relationship manager must also be provided with direct and immediate access to the people who can stop the foreclosure. The relationship manager has the obligation to tell the foreclosure people to stop it if that is reuqired under the Making Home Affordable guidelines. So, with a HAFA Short Sale you should not have those sleepless nights worrying about whether the servicer will get the foreclosure postponed.
If the borrower/seller asks to escalate, the relationship manager must help the borrower/seller contact the people who handle escalation for the servicer. It is one thing to want to escalate the case, it is another to have the manager who knows how to do it and then put you in touch with the right people.
The guidelines require that the servicer have enough staff to allow the relationship manager to provide the required level of service. In other words, the case load for each relationship manager must be reasonable so all of these tasks can be properly performed. Also, the servicer has to provide sufficient support personnel to provide the relationship manager with the resources necessary to deliver the required level of service.
What does this mean for real estate agents? Once you are involved with a HAFA Short Sale, find the relationship manager because this single point of contact will make your communication with the servicer much easier. At the very least, you will know who to call if it is necessary to stop the foreclosure.