The California Association of Realtors has taken out full-page ads in seven of the state’s biggest newspapers to put pressure on lenders and regulators to speed up and streamline the short-sale process.
The ads, which featured an "open letter" signed by CAR President Beth Peerce, ran in the Los Angeles Times, San Francisco Chronicle, San Jose Mercury News, Sacramento Bee, San Diego Union-Tribune, Bakersfield Californian, and Fresno Bee.
Short sales are often the only way for homeowners who don’t qualify for loan modifications to avoid foreclosure, Peerce said. One in five home sales in California last year involved a short sale, but 640,000 homes have been lost to foreclosure in the last three years, she said.
With nearly 30 percent of California homeowners "underwater," or owing more on their mortgage than their home is worth, foreclosures are expected to remain a problem in 2011 and 2012 — one that could delay "meaningful recovery" of housing markets and the economy, the group said.
CAR has been advocating for improvements to short-sale guidelines under the federal Home Affordable Foreclosure Alternative (HAFA) program and meeting with major banks, U.S. Treasury officials, and Fannie Mae and Freddie Mac to urge them to standardize their short-sale processes.
The ad campaign follows the release of a survey in which four out of 10 CAR members reported that the last short sale they handled didn’t close, and most Realtors said they were frustrated at how long it takes lenders to respond to offers and other inquiries.
"Horror stories abound from potential homebuyers and Realtors forced to wait 90 or more days for a response to a purchase offer or being required to fax short-sale applications or other paperwork as many as 50 times," Peerce said in the ads. "These delays discourage potential homebuyers from considering a short-sale purchase and undermine the process for those who short sales are intended to benefit — the hundreds of thousands of families facing foreclosure."
A CAR spokeswoman declined to say how much the ad campaign cost, but said the National Association of Realtors did not contribute to it.
Although NAR did not provide financial backing for the public relations campaign, "we are on the same page on the issue of short sales," CAR spokeswoman Lotus Lou said in an e-mail.