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Helping Homeowners Stay Put

By Stacey Moncrieff, Editor in Chief, REALTOR® Magazine

Tucson, Ariz., practitioner Frances Flynn Thorsen is fighting mad and she’s not sparing any punches. She wants the NATIONAL ASSOCIATION OF REALTORS® and state REALTOR® organizations to do more to help homeowners with underwater mortgages keep their homes.

“All the education programs and certifications that exist today are sales centric,” she says, “not a single word about loan modifications.”

Frances has taken her crusade to the airwaves with “Truth in Housing Matters,” a weekly show on Access Tucson. She’s also written an education program on home retention and has applied for CE credit through the state of Arizona.

Actually, if she had walked the halls of NAR’s Midyear Legislative Meetings in Washington this week and attended NAR’s Real Estate Summit on Tuesday, she would have heard a whole lot of people talking about loan modifications and a whole lot of questions about what the government can do to make its Making Home Affordable program now voluntary for lenders more effective.

I commend Frances for her ongoing work on this topic. I just have two issues with what she’s saying:

  • Getting involved in loan modifications can be dangerous territory for real estate practitioners. REALTORS® at the Midyear meetings were warned about overstepping the bounds of their license and trying to help homeowners with loan mods.
  • Most NAR members are in the sales business. They don’t make money unless a home sells, so it’s hard to fault them for trying to keep their business moving.

That said, it’s hard to disagree with her point that keeping people in their homes is better for homeowners, communities, and the real estate industry. If you want to help homeowners in your area, Frances suggests doing some digging to find what assistance is available through local attorneys or HUD-certified counselors. You might start with Making Home Affordable or Freddie Mac’s Don’t Borrow Trouble. Also check out the resources available through NAR’s Foreclosure Prevention and Response Program.

What more do you think NAR should be doing to help homeowners keep their homes?

Stacey Moncrieff

Stacey is vice president of business-to-business communications for the National Association of REALTORS®, overseeing the association's key communications with NAR members and REALTOR® association executives.

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Comments
  1. Stacey,

    I agree that real estate agents should NOT be involved in loan modifications. My efforts are directed at home retention. While agents need to understand the basics of loan modification, they should leave that to the experts. My recommendation is to refer the consumer to qualified attorneys (consumer protection law) and HUD Certified Counselors.

    A point of clarification … I am not practicing real estate these days. I am devoting full time to writing and teaching and course development. I am also working with members of the Arizona Foreclosure Coalition to help homeowners keep their homes.

    Our discussion was about the importance of consumers having access to loan modification professionals but I did not mean to suggest that REALTORS should be involved with that. Sorry for the confusion. On that point we agree totally!

    I saw REALTOR Magazine’s excellent article this morning, “Watch for Legal Traps in Distressed Sales” and I promptly posted it on Twitter, my Facebook profile page, the Arizona Assn. of REALTORS Facebook page, Joeann Fossland’s real estate school page, and my “Truth in Housing Matters” page on Facebook.

    http://www.realtor.org/RMODaily.nsf/pages/News2009051403?OpenDocument

    [Excerpt:] “If you help home owners navigate a loan modification, be aware that your E&O policy might not cover your actions if you’re sued, said Michelle Lind, general counsel of the Arizona Association of REALTORS®. Providing such help is considered the business of housing counseling agencies, not brokerages, she said. Similarly, if you handle REOs for a lender, be sure your E&O policy covers property management activity, she said. Many of your tasks in selling REO properties are property management functions: getting utilities turned on, keeping the property secure if it’s vacant, even evicting people.”

    The NAR Real Esate Summit Coverage paid token attention to consumer friendly initiatives. I read the news release at Realtor.org. Frankly, I was shocked to see NAR leadership sharing the stage with short sales experts touting themselves as “rescue” professionals. There is hardly “rescue” when their efforts are sales centric without a corresponding plan of action to refer homeowners to attorneys and HUD Certified Counselors.

    You say, “Most NAR members are in the sales business. They don’t make money unless a home sells, so it’s hard to fault them for trying to keep their business moving.”

    You hit the nail on the head, Stacey. This is all about making a buck.

    What about fiduciary responsibility? There are many agents who are committed to SERVICE in the HOUSING INDUSTRY. It is not just about bricks and mortar inventory. Many people would like to see the word SALES replaced on real estate licenses.

    What happens when a homeowner finds a way to KEEP his home?

    1. Few vacant properties on the market.
    2. Fewer family emotional calamities.
    3. LOTS of good will and referrals.
    4. Fewer bank losses.
    5. Property values remain higher.
    5. Neighborhood stability.

    Your comment lies at the root of my problem with NAR. They are taking the housing crisis and turning it into an agent-centric income opportunity. Consumers’ interests are secondary to agents’ livelihood.. That is precisely what I am talking about. That is precisely what needs to change.

    Thanks for the chat and the heads up. Every homeowner who staves off foreclosure is another success story in a real estate market that needs more success stories!

    NAR is the most powerful trade group in the country. REALTOR Magazine is one of the best magazines in the country (I have an eye for a good magazine!) … There are hundreds of thousands of REALTORS who want to help. Let’s show them how to help heal the market and help save some homes. The real estate market and the country will rebound and agents will flourish, knowing they have done the RIGHT thing.

  2. Joanne Levy

    Francis:
    I agree with you and truly believe if we could save some homeowners the devastating loss of a home…we would immediately see a change in the market. Homes would start appreciating again.
    I have had grave concerns with the lenders chasing former owners that have lost their home in foreclosure or through a short sale. They are now going after the deficiency. I do not know of any homeowners in Nevada that have had a mortgage re-negotiated. Most of our properties are at least 150% loan to value. No lenders will touch those properties. I believe there is still a lot that can be done. Even if it means the lender waits to receive the majority of the money on the back end of a sale. Thanks for being such a strong advocate for homeowners.

  3. Francis,
    Hooray for you taking the position you are taking! All I see these days are emails and seminars targeting the opportunity available for Agents to “get rich” at the cost of the distressed homeowner. It makes me so sad to counsel with a homeowner about trying to avoid foreclosure by leasing their home, re-negotiating their loan, or other creative ways, only to have another Agent come behind and list their home as a short sale. Many of these agents are not counseling the homeowners about the real ramifications of short selling their homes, ie future credit issues, deficiencies, etc, I “get it” that we Agents need to list and sell property in order to put food on the table for our families, but at what cost?
    Keep up your good work. Little by little we can change the consciousness level of a whole group of people.

  4. Ladies,

    I hear little resistance from rank-and-file agents to the notion of helping homeowners. I think the root of the problem is the way the market is framed. Presently, NAR devotes a lion share of attention to TWO consumer buckets:

    (1) Buyers
    (2) Sellers

    Where is the bucker for Homeowners who want to KEEP their homes? These consumers are ALSO part of the real estate community … they are past clients and they are the source of future business and referrals. They need a special kind of attention that is not the focus of present REALTOR educational outreach.

    (1) Buyers
    (2) Sellers
    (3) Homeowners Who Want to Stay Put

    Thanks for your input. And thanks, Stacey, for initiating a valuable discussion here! An NAR blog is a great place for this discussion.

    [Note to NAR: This blog post does not seem to enable e-mail alerts when comments are made. It would be helpful to toggle that switch. Thanks! 8-)]

  5. It is amazing to me that an agent could be so short-sighted as not to realize that helping homeowners keep their homes is a HUGE boon to business. Imagine how many referrals that person would send you. He/She would be a client for LIFE. Also, the more we stabilize the home market the faster we get out of the mess we are in.

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