That's Enough Already (my own little TEA party movement)...

As reported in Inman News yesterday Source: “Short-Sale Incentives Revamped Again,” Inman News (Jan. 10, 2011) and reprinted by Realtor.com comes this story of changes to the HAFA rules.

Loan servicers will have 30 days to send a borrower a short-sale agreement that includes the list price or acceptable sales proceeds under recent changes made to the Home Affordable Foreclosure Alternatives Program, aimed at distressed borrowers who don't qualify for other government loan modification programs.

Once a sales contract has been initiated, loan servicers then have 30 days to approve or reject the transaction. The stricter timelines are believed to help speed up the short sale process, which has faced numerous complaints for how long it takes lenders to review and approve short sales often causing buyers to walk away.

The stricter timelines were apart of several revisions the Treasury Department recently announced to its HAFA program — the second major revision to the program since its launch in 2009.

Another big change: Loan servicers will no longer be restricted on paying second-lien holders, allowing them more freedom particularly when dealing with second-lien holders when borrowers owe less than $100,000.

Loan servicers used to be restricted to paying second-lien holders no more than 6 percent of outstanding loan balance (with an overall limit of $6,000) in exchange for releasing subordinate liens. Second-lien holders have been another big obstacle to completing short sale transactions.

HAFA’s new directives also now forbid loan servicers from deducting vendor expenses from commissions paid to real estate brokers.

The rules are effective Feb. 1. It does not apply to mortgages owned or guaranteed by Fannie Mae or Freddie Mac, or insured or guaranteed by a federal agency such as the Federal Housing Administration (FHA).

One cannot help but ask when reading releases like this, “Is this good news? Will it really help?” There is still nothing in these new rules that give he loan servicers what they really want – relief from the losses that they are taking. The grains of salt that one must take with each new announcement have become enough to choke the proverbial horse. Still, maybe bits and pieces of these new guidelines might help, especially the part dealing with second loans.

It is apparent that people in the current administration want to help resolve the current housing meltdown and that they have good intentions. What is also apparent is that they don’t have the means (or political will and capital) to really do much that is meaningful. The current mess is just too deep and too wide for easy fixes or fixes that don’t cost too much. That is true if the goal is to try to keep everybody whole. In fact, that cannot be done. Somebody’s going to lose and lose big-time here. It can either be the fat-cats on Wall Street who made this mess or Joe Taxpayer who is an innocent bystander to much of this crisis. Who do you think will end up getting the Ziggy on this? After all, has anyone ever written articles that Joe Taxpayer is too big to fail?

So, hitch up the wagon mama; eventually, we’re gong for a ride to pay for all of this. The Bandaids and bubblegum that have been holding this whole thing together are starting to get stretched a bit too far. At some point soon, there is coming a day of reckoning for Fannie and Freddie and BOA and Wells Fargo and a few other biggies that will provide the final bang of this housing bubble burst. Make no mistake, this Trillion dollar turkey is headed to our taxpayer plates.

Personally, Id rather have it happen soon and get it out of the way in one humongous admission of the failures of the past; so that we can get on with the future. I’m tired of the endless trickle of bad news, foreclosures and short sales and the continued slow erosion of home values. I’m fed up with foreclosures and short sales making up 50-60% of the sales in my market. I’m sick of showing 30-40 homes worth $30-40,000 to buyers who still want to low-ball their offers.

That’s enough, already. I’m too old for this stuff. Let’s get this over with and get back to something that resembles a sane and balanced market. Take your HAMP and HAFA and HEMP (not yet a Federal program, but one with more promise that those that are currently in place) and shove them. Let’s have a WTO program (no, not World Trade Organization, this would be Write Them Off) and get on with life. I don’t suppose that this will happen, but it feels good every now and then to just say it out loud.