Janna Rankin Scharf, GRI, CLHMS, SFR - Coeur d'Alene Idaho Real Estate
New short sale bill would require lenders to provide response in REASONABLE time! Now that would be AMAZING! I won't be holding my breath.....
The new bill, H.R. 6133, Prompt Decision for Qualification of Short Sale Act of 2010, has been introduced in an effort by Congress to require lenders to speed up their time table of response. It routinely takes MONTHS for a response, while potential buyers bail on their attempts to purchase the home and frustrated sellers lose their home to foreclosure.
National Association of REALTORS President, Vicki Cox Golder, said, "The short sale, which requires lender approval, is an important instrument for homeowners who owe more than their home is worth. 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."
My personal experience with short sales in the Coeur d'Alene market area is that the response time, once an offer and complete packet of required documents is submitted, exceeds 90 days. In many cases it's well beyond 90 days. Local and regional lenders are much more responsive than national servicers and big banks, and tend to respond in under 30 days.
In the past year, I have seen a marked decrease in the number of buyers who are willing to consider pursuing a short sale. Buyers and their agents have either heard the horror stories about waiting months for a response, only to find that they won't be able to purchase the house after all, or they've already been victimized by the process and aren't willing to subject themselves to it again.
Unfortunately, on the other side of the coin are distressed sellers in a tough spot, attempting to do all they can to make the best of it, for the lender as well as themselves. And in spite of their best efforts, they end up losing their home to foreclosure. While the lender eventually gets significantly less at the trustee sale than they would have if they would have approved the short sale many months earlier.
October 17, 2010 is the one year anniversary of one of my short sale listings. I had a complete offer submitted on Nov. 3, 2009. Those hopeful buyers are still waiting, eleven months later. Most buyers would have withdrawn long before now. Hopefully H.R. 6133 passes and lenders are held to a REASONABLE response time.
But then, what's the definition of reasonable?
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