Free Specialist Consultation!

Short Sale Guide

Short Sale News

Connect With Us

New Bill May Help Speed Up Short Sales

New legislation promises to speed up the short sale process by requiring lenders to issue a decision no more than 45 days after the filing of the request, according to a report from the REO Insider.

The bill, tentatively dubbed the "Prompt Decision for Qualification of Short Sale Act of 2010" or HR 6133, was co-sponsored by Representatives Robert Andrews (New Jersey) and Tom Rooney (Florida) and presented to Congress this week.

Although technically possible within 30 days, the wait time for short sale approval generally takes 90 to 120 days, sometimes even more. By that time, most potential buyers would have turned away from the deal or found other homes.

Several reasons can account for the delay, but among the most cited are lack of personnel, poor management and lost paperwork, and the influence of secondary lien holders who have to approve the short sale as well.

The National Association of Realtors (NAR), among many other groups, has expressed support for the bill. Vicki Cox Golder, NAR president, said that the group believes a quicker process can help not just underwater homeowners, but also the U.S. economy.

Other government efforts to encourage short sales have yielded results, but not at the rate authorities expected. The Home Affordable Foreclosure Alternatives (HAFA) program got off to a slow start, a fact attributed to the voluntary participation required of lenders.

Short sales are a popular foreclosure alternatives for underwater borrowers, or those who owe more on their mortgage than their home is worth. About one in four borrowers today are underwater, and falling prices can mean more demand for short sale help in the future.