Anyone that’s been involved in the process of a short sale before knows that they can be anything but short. Banks can often take a long time to approve a short sale, a process in which they accept less than what is owed on the home.
“Delays in approving short sale requests remain a significant challenge for realtors and consumers and often results in canceled contracts and the property going into foreclosure,” said Moe Veissi, president of the National Association of Realtors.
According to a survey conducted by the California Association of Realtors, 60% of short sale offers last year did not close. It’s unfortunate, yet likely that most of those properties went into foreclosure instead.
But now there’s great news for distressed home owners and real estate agents! The Federal Housing Finance Agency has issued new short sale rules for the banks, with the intent to speed up the entire process. Lenders will be required to respond to short sale requests within 30 days and to provide a final decision within 60 days. Additionally, if the bank is still reviewing the offer after 30 days, they will be required to give a weekly update on the process to the borrower.
The new rules will take effect on June 1st and should prove to be a win-win situation for all parties involved. Homeowners will be more likely to get an approved short sale, avoiding the damage a foreclosure can cause, agents will close more deals, and lenders can benefit financially by avoiding pricey foreclosure costs. Even buyers will end up with a home that’s been taken care of, as opposed to a typically neglected foreclosure property.
Courtesy of CNN Money