The California Association of Realtors published a full page “open letter” in 7 major California newspapers today (including the LA Times) for the purpose of raising awareness of multiple issues facing the foreclosure crisis and efforts to mitigate that crisis – specifically focusing on short sales and their role in today’s foreclosure crisis.

Efforts to do loan modifications under the federal HAMP program have failed to stem the crisis, forcing homeowners to attempt short sales. However, lack of standardized procedures, incredible bureaucracy hurdles within the large banks, loan servicers unable to handle the work loads and a host of other issues have made short sales a nightmare for homeowners, buyers and agents alike. The open letter stated that “only three out of five transactions closed – even when there was an interested and qualified buyer”. Now you know why Realtors hate short sales!

A solution to this mess is the little known HAFA (Home Affordable Foreclosure Alternatives) short sale program instituted last summer by the US Treasury Department. HAFA is a pre-approved short sale process that was designed to eliminate many of the traditional issues of the short sale process plus provide a $3,000 relocation allowance at close of escrow for the homeowner among other things.

In December, the California Association of Realtors sent a letter to the Treasury Department, Fannie Mae, Freddie Mac and the Federal Housing Finance Agency encouraging these agencies to implement changes to the HAFA program to make it a more workable solution for short sales.

Today’s open letter was designed to make these regulators, elected officials and other stakeholders aware that all of us “with a stake in California’s economic future (must) resolve this issue …Our families and our communities can’t wait any longer”.