Florida is on the top of the list of U.S. locations that have the highest foreclosure rates. It’s a troubled time here, and a proposal to help comes from a new but seemingly logical group. According to a Florida Politics blog in the Sun Sentinel, members of Florida Realtors have come up with an idea to help.
Not only does the realtors’ proposal aim to ease the foreclosure crisis, but it would also supposedly boost the realty business and Florida economy as a whole. The foreclosure proposal lays out two basic ideas:
First, the Florida Realtors believe that short sales need to be encouraged in order to prevent houses from going into foreclosure. Advocates behind the proposal argue that short sales don’t go through because of a disconnect between lenders and homeowners. The proposed fix: an online network that would list all short sale properties and their pre-approved short-sale prices. The electronic marketplace would put lender and homeowner on the same page and give them a centralized means of communication.
Secondly, the realtors’ propose to hold lenders accountable for responding to short sale home offers. The problem has been that lenders reportedly ignore short sale offers and delay the process so long that the homes go into foreclosure. The Florida Realtors propose that lenders be given a 45-day time limit to respond to offers. If they fail to accept or reject within that timeframe, the lack of communication would represent that the short sale offer is accepted.
Critics of the realtors’ foreclosure proposal don’t think that it’s lack of communication behind slow short sales. They think that banks and lenders are hesitant to so readily accept a financial loss. Says one Florida mortgage banking professional, “They are still hoping that if they hold on long enough, property values will increase and they can make more money on them.”
We all hope that the housing market and, therefore, economy will improve. Whether the Florida Realtors’ proposal is a good idea is not certain, but it’s at least refreshing to hear a new idea being thrown out there. What do you think about the realtors’ suggestion?
Sun Sentinel (Florida Politics blog): “Realtors urge Congress to press banks on ‘short sales,'” William Gibson, 13 May 2011