from National Association of Realtors
A proposed bill before Congress could help speed the short-sale approval process by requiring subordinate lien holders to review and respond to short sale requests within 45 days.
The National Association of Realtors quickly offered full support for the measure, “The Fast Help for Homeowners Act,” by U.S. Rep. Jerry McNerney (D-Calif.).
“As the leading advocate for homeownership, Realtors know that issues and delays with secondary lien holders remain an obstacle to streamlining the short sale process,” says NAR President Moe Veissi, broker-owner of Veissi & Associates in Miami. “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 approved for short sales, forcing many into foreclosure.”
The proposed legislation – it must be passed by the House and Senate, and signed by President Obama to become law – would require the primary mortgage lender to tell secondary and subsequent lien holders about any request for a short sale.
NAR has actively pushed the mortgage industry to improve the short sale review and approval process, especially when second liens are involved. Veissi praised Rep. McNerney for his efforts on the bill and urged Congress to pass it quickly.
“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,” says Veissi. “While efforts have been made to improve primary lien holders’ response times, issues still abound with second and subsequent lien holders. This legislation is a step in the right direction.”
According to NAR, Realtors continue to report that short sale transactions are held up due to a lack of response from lenders. NAR wants mortgage servicers to approve reasonable short sale offers so that homeowners can avoid foreclosure to minimize the negative impact on families, home values and neighborhoods. NAR believes that streamlining the short sale approval process for both primary and secondary lien holders will help close more short sale transactions.
“We applaud any effort to help improve the short sale process and give distressed homeowners alternatives to foreclosure,” says Veissi.