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» SHORT SALES DECLINE IN MARYLAND State efforts to control mortgage rescue scams result in fewer short sales. In the Sarasota-Bradenton-St. Petersburg area of Florida, foreclosure sales usually outnumber short sales, according to Robert Serena with Keller Williams Realty of Manatee, Florida, and team leader for the Serena Group in Bradenton. "Most Realtors in this area prefer working with REO listings because the process is much more streamlined," Serena said. "The REO business has been so well organized, it's a joy from start to finish." He says that even when some rehab work is required, REO listings can usually be marketed and closed in 30 to 60 days. "We've closed more than 150 properties so far in 2013 and are on course to reach our goal of more than 200 this year," Serena said. Presently, the Serena Group is managing more than 100 Fannie Mae properties, with 35 listed for sale and the remainder either under contract or undergoing rehab. Serena says his group gets very few short sale listings from banks. "Most of our short sale leads come from our blogs and websites," he added. His reluctance to work with short sales stems from the many difficulties he has experienced with these transactions in the past. "The banks are totally disorganized, and frequently, we have had to redo all the paperwork because the bank lost or misplaced it," he explained, "and the situation is not much better than it was five or six years ago." In addition, Serena says negotiating short sales is so problematic that he has retained a professional negotiator working under an attorney's direction to deal with the few short sales he does handle. In contrast to several years ago, Serena says most properties in his area are moving quickly and prices are recovering. "In fact," he said, "there is a shortage of MLS listings, and we are getting multiple offers, sometimes for more than the asking price." Sandra Lane contributes regularly to DS News and from 2004 to 2006, wrote for DS News' predecessor, REO Magazine.She is a former real estate broker and grew up in what she calls "a real estate family." She has written for various newspapers, trade journals, and major corporations. POINT— COUNTERPOINT There are always exceptions to every trend. Although short sales are becoming more popular in many areas, in Maryland, they are decreasing in number due to the recent enactment of the Maryland Credit Servicers Business Act (MCSBA), effective July 1 of this year. "Because of this new law, a licensed Realtor does not have the authority to negotiate a short sale or even speak with the decision makers," explained Brenda Sarver, owner of Maryland REO Connection, LLC, with offices in Frederick and St. Michaels. "I prefer REOs because in these transactions, the people I talk with are the decision makers, and the transactions are more straightforward." In Maryland today, a real estate license is not sufficient authorization for a Realtor to negotiate a short sale. A Realtor must also be licensed with the state credit bureau as a collection agency and post an additional bond. "What has happened is that real estate agents can transfer paperwork back and forth, but they cannot be involved in negotiations of short sales," Sarver said. "This work is now being handled by attorneys, and many of them do it for no fee as long as they are retained to close the transaction." Sarver says the reason for the enactment of this new law is that lawmakers hope it will enable the state to be more effective in identifying and tracking down people involved in mortgage rescue scams. However, the new legislation creates problems and delays for short sale transactions and the professionals working with them. Sarver, who has specialized in REOs for the past 18 years in the Washington, D.C., suburbs, said, "This new law makes SHORT SALES LAG IN CENTRAL FLORIDA Problems associated with paperwork and negotiations discourage short sale activity. MARKET PULSE housing inventory dry up, in June of this year, Gov. Brian Sandoval signed Assembly Bill 300 into law which changed the documentation requirement of the 2011 law. With foreclosure constraints loosened, Nevada's logjam of delinquent loans gave way in August as new notices of default soared 226 percent. RealtyTrac reported foreclosure starts statewide rose from a mere 249 in July to 1,419 in August, paving the way for an influx of new REO inventory. Nevertheless, Karten said, "Las Vegas is very much a short sale city. I take two to three short sale listings per month and still have to turn some people away because they don't have a viable hardship. Also, some waited too long." Still, he says there are many more buyers than homes for sale. One of the difficulties in working with short sales, Karten explains, is that the rules keep changing. He tells of a short sale home listed at $106,000 with a full cash contract. "Six weeks later, we were told that the lender now wanted $118,000 for it," he said. Although the buyer accepted the higher sales price, Karten said, "Three weeks later, there was still no approval, and we were told the bank turned this property over to a third party." He says an auction was held with open houses for seven days, and in spite of a legally binding contract, which was cancelled, the lender accepted a bid of $145,000. From an agent's perspective, Karten says, there are no rules. "The banks can do whatever they want. You say to your client, 'I think I know how this is going to go,' until they pull the rug out next time. The whole process is written in Jello, and it's very difficult to explain to homeowners," he said. Despite all the confusion and turmoil, there is a bright side. "Our values have increased 24 percent in the last 12 months," Karten said, "and this has enabled a lot of people to become equity homeowners again." foreclosure sales the best way to go in Maryland, although we still have a small number of short sales." PROFILE IN LEADERSHIP —Brad German, Freddie Mac COVER STORY "One of the reasons for the increase in short sales is that the process has been simplified and standardized." VISIT US ONLINE @ DSNEWS.COM 63

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