Rep. Jerry McNerney (D-CA) has introduced legislation, the Fast Help for Homeowners (FHFH) Act (HR 6153), to help speed up the short sale process. Rep. McNerney’s bill was met with broad bipartisan support and industry endorsements. The Fast Help For Homeowners Act requires a second mortgage lender of a federal mortgage loan to review and make a decision on a short sale agreement within 45 days. If the lender does not make a decision within that time frame, the short sale will be deemed approved on the 46th day.
“For far too long, the housing downturn has challenged our region," said Rep. McNerney. "My bill is one commonsense step we can take to help shore up the housing market and provide much-needed relief for homeowners. Our region has been ground zero for the housing crisis, and I am committed to fighting for folks in our communities who have been hit hard."
The proposed legislation would establish guidelines requiring the primary lien holder to inform secondary and any subsequent lien holders of a request for short sale. The bill would also impose a deadline for subsequent lien holders to respond to both the primary lender and the consumer following a short sale request.
“A strong housing market is a crucial part of getting our economy back on track. The housing crisis has affected homeowners, communities, and small business owners. Struggling homeowners have heard a lot of talk about addressing the issue and want to see real action, and my bill will do just that,” said Rep. McNerney.
The Fast Help For Homeowners Act has broad industry support, receiving the endorsements of the: National Association of Realtors (NAR); California Association of Realtors (CAR); Central Valley Association of Realtors; NeighborWorks Home Ownership Center, Sacramento Region; California Association of Real Estate Brokers (CAREB); and Stockton NID Housing Counseling Agency.
“As the leading advocate for homeownership, Realtors know that issues and delays with secondary lien holder remain an obstacle to streamlining the short sale process,” said NAR President Moe Veissi, broker-owner of Veissi & Associates Inc. in Miami, Fla. “Short sale negotiations are much more difficult for borrowers who have multiple servicers involved and ongoing delays continue to severely limit the number of homeowners who are approved for short sales, forcing many homeowners into foreclosure."
The Fast Help For Homeowners Act has broad bipartisan support and is cosponsored by Reps. Dennis Cardoza (D-CA), Tom Rooney (R-FL), George Miller (D-CA), Jim Costa (D-CA), Barbara Lee (D-CA) and Richard Nugent (R-FL).
“Second mortgage lien holders frequently hold up and cancel the short sale transaction while trying to collect the largest possible payout in exchange for releasing the homeowner’s lien, even though the secondary lien holder often gets nothing if the home ends up going into foreclosure,” said Veissi. “While efforts have been made to improve primary lien holders’ response times, issues still abound with second and subsequent lien holders, and this legislation is a step in the right direction.”