Representatives Robert Andrews (D-New Jersey) and Tom Rooney (R-Florida) have dusted off and reintroduced their bill, Prompt Decision for Qualifications of Short Sale Act. This piece of legislation was originally introduced by the pair last September but never made it in front of a House Committee for debate before the legislative session ended.
As I indicated in my post on the subject last fall, just about everyone out there knows that the only thing "short" about a Short Sale is the payoff of the Seller's mortgage. And while it's true that the term was always meant to refer to the less than full payoff, the irony of "Short Sales" that take upwards of six months to complete has not been lost on anyone. And, no, I still haven't heard anyone laughing.
This bipartisan bill is in response to mounting pressure from beleaguered homeowners who are just barely hanging on and seeks to alleviate the ongoing problem distressed seller's are experiencing as potential buyers walk away from their contract due to the inordinate amount of time many Servicers take to respond to a request for a Short Sale. The bill would require lenders to respond to short sale requests within 45 days.
I have not yet seen the language of the bill this time around but last time it was actually pretty strong and was written to override any other provision of law or any contract between the servicer and the securitization vehicle. That version threatened the servicer with an automatic acceptance of any properly submitted short sale request if they failed to respond appropriately within 45 days.
Although many naysayers out there are pessimistic about the value of the bill, pointing to other existing legislation that is not enforced, NAR has thrown their support behind it.
In my humble opinion, putting a limit on acceptable response time doesn't really address the underlying, and unacknowledged, problem of servicer compensation, which I believe is the real reason servicers drag their feet and otherwise try to derail short sale attempts.
It will be interesting to see what form this new piece of legislation ultimately takes and whether it survives the session. If it does survive and becomes law, it will be interesting to see if it makes a difference for Southern New Hampshire Short Sales as well as for the rest of the country.
If you owe more on your Southern New Hampshire home than it's worth and you don't know what to do, contact me at 603-490-5344 for a confidential consultation about foreclosure alternatives.