Legislation has been introduced that would require lenders and servicers to hasten the time it takes to approve or disapprove a short title or short sale. HR 6133, the Prompt Decision for Qualification of Short Sale Act of 2010, co-sponsored by U.S. Reps. Robert Andrews (D-NJ) and Tom Rooney (R-FL) is designed to assist homeowners who are underwater on their mortgages and have a buyer reader to purchase the house at a price which will net less than the current payoff of that mortgage. HR 6133 would also require lenders to respond to consumer short sale requests within 45 days.
“The short sale, which requires lender approval, is an important instrument for homeowners who owe more than their home is worth,” said Vicki Cox Golder, president of the National Association of Realtors (NAR) and owner of a real estate company in Tucson, Ariz. “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.”
The bill has been referred to the House Financial Services Committee for consideration.
“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," said Golder. "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."