What is the best way to handle your client’s inquiries about a loan modification? It is very common for this subject to come up during conversations, listing appointments and meetings with homeowners-the current housing and economic circumstances have caused a lot of fear and confusion for everyone. Like it or not, the reality of today’s market dictates that a Realtor should have at least a general knowledge of the various home retention options and exit strategies available to homeowners-options that may have not been available in the past, but are now commonplace-such as loan modification, short sale, deed-in-lieu & foreclosure.
When a homeowner asks your opinion about the possibility of keeping their home by applying and qualifying for a loan modification, do you know how to advise them? Of course, as an agent who earns their living by listing and by selling real estate, your first impulse may be to discourage that homeowner from pursuing a loan workout and instead encourage them to list their property with you for a sale or short sale. Ah, there’s the rub!
The Realtor Code of Ethics and Standards states, “When representing a buyer, seller, landlord, tenant, or other client as an agent, Realtors pledge themselves to protect and promote the interest of their client” and “…Realtors remain obligated to treat all parties honestly”. This seems pretty clear cut to me, put the homeowner’s best interest first. If your client clearly expresses a desire to find a way to keep their home, provide them with the information and any tools at your disposal to help them. When you do this, you are reaffirming yourself as an informed, experienced real estate professional and positioning yourself as an advocate for your client. If it turns out they are not a good candidate for a loan workout, then that option is off the table and it is time to move on to an exit strategy. The new HAMP and HAFA streamlined short sale programs will take effect April 5, 2010 and will take alot of the headache out of helping clients with an exit strategy. Realtors need to know the HAFA process so they can provide timely and tangible solutions.
I am confident that the majority of realtors do try to be informed and strive to offer their clients the best advice and guidance. Unfortunately, a few instances have come across my desk that demonstrates the exact opposite of the Realtor Code of Ethics and Standards. I was speaking with a local Realtor about a simple method to determine if a homeowner is a good candidate for a loan modification, and she breezily informed me that she simply told all of her clients that they did not qualify for a loan workout-without even reviewing their financial situation! Now, whose best interest was she serving?
Another time, while giving a workshop teaching a method to determine who qualifies for a loan modification, an agent stated that he had told his client that his file was submitted for a loan modification, but in reality this agent had submitted a short-sale package. I asked him how he was going to explain that to his client, and he shrugged and said, “I’ll just tell him his loan mod was declined but the short sale was approved.” Well, after I picked my jaw up off the floor, I realized that providing a comprehensive resource guide for real estate professionals and at-risk homeowners will only be effective if everyone remembers what it means to be a Realtor- “competency, fairness, and high integrity resulting from adherence to a lofty ideal of moral conduct in business relations”.
I say, let’s all strive to provide our clients with accurate and unbiased information so that they will be able to make a wise and informed decision about their home and financial future-it’s the least we can do. Learn the basics of both HAMP & HAFA-the new federal streamlined short sale plan so you can best guide your client through these difficult decisions.
Susan Gregory is the author of the #1 resource for professionals and Homeowners, The Complete Loan Modification Guide kit-the best selling do-it-yourself system that takes the guess work out of preparing your financial statement, hardship letter and all of the required forms your lender needs. You get an easy to use software program-Loan Mod Quick App-as well as an easy to understand handbook with step by step directions. Why take chances with your application? Simply input your unique financial information into the Loan Mod Quick App and it calculates it all for you! Debt ratio, new target payment with new modified terms, disposable income and more. It couldn't be easier-end the frustration-Visit myloanmodificationcenter.com and order today.
