U.S. Representative Robert Andrews (D-N.J.) and Tom Rooney (R-Fla) offered up new legislation to Congress last week. H.R. 6133, "Prompt Decision for Qualification of Short Sale Act of 2010," is an effort from Congress to help keep potential buyers from walking away from short sales, simply because lenders take months to respond to their offers.
The National Association of REALTORS are a strong supporter of the bill. Their President, Vicki Cox Golder, said, "The short sale, which requires lender approval, is an important instrument for homeowners who owe more than their home is worth. While the lending community has worked to improve the size and training of their short sales staffs, they still have a long way to go on improving response times."
And in a sticky financial situation such as a short sale, where time really counts, this bill comes as welcome news to many homeowners and buyers.
This legislation aims to "require the lender or servicer of a home mortgage, upon a request by the homeowner for a short sale, to make a prompt decision whether to allow the sale." (Library of Congress)
In this bill, the terms "short sale" means the sale of the dwelling or residential real property that is subject to the mortgage, deed or trust, or other security interest that secures a residential mortgage loan that:
- will result in proceeds in an amount that is less than the remaining amount due under the mortgage loan; and
- requires authorization by the securitization vehicle or other investment vehicle or holder of the mortgage loan, or the servicer acting on behalf of such a vehicle or holder.
Ms. Golder continued, "Unfortunately, homeowners who need to execute a short sale are severely hampered because lenders (loan servicers) are unable to decide whether to approve a short sale within a reasonable amount of time. Potential homebuyers are walking away from purchasing short sale property because the lender has taken many months and still not responded to their request for an approval of a proposed short sale price. Many consumers have mentioned that the delay in short sale price approval exceeds 90 days, and in many cases never arrives."
Hopefully, if this bill passes into law, homeowners will find relief from their mortgage woes, and will be able to sell their home without having to be foreclosed upon.