New short sale bill would require lenders to provide response in REASONABLE time!

Reblogger StepStone Realty
Real Estate Broker/Owner with StepStone Realty, LLC 572467

Great blog today by Janna.  "Reasonable" time.... not sure what that can mean or if it will help.  What are your thoughts?  Going to post Janna's blog to the fan page as well.  This is something we all need to stay up on.

Original content by Janna Scharf AB37665

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.....

Short Sale Realtor Janna Rankin ScharfThe 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 make the best of it and 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?

Janna Scharf Sells Real Estate in Coeur d'alene IdahoJanna Rankin Scharf  provides a superior level of real estate services to home buyers and sellers in Coeur d'Alene and Kootenai County, Idaho. Visit www.JannaScharf.com to search for homes in the Coeur d'Alene MLS for anywhere in spectacular North Idaho.

No matter how grand or modest your real estate dreams may be, you can turn to me in confidence.  Give me a call today and let me know what I can do to be of service to you!

Janna Rankin Scharf AB, GRI, CSP, CNS, CLHMS  208.651.9700

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Rainmaker
526,160
Dave Halpern
Keller Williams Realty Louisville East (502) 664-7827 - Louisville, KY
Louisville Short Sale Expert

The bill calls for prompt response, not prompt approval. This may cause more prompt denials.

Sep 30, 2010 01:28 AM #1
Ambassador
893,216
Janna Scharf
Keller Williams Realty Coeur d'Alene - Coeur d'Alene, ID
Coeur d'Alene Idaho Real Estate Expert

If there's going to be a denial, better that it be prompt! 

Sep 30, 2010 02:02 AM #2
Rainmaker
88,148
StepStone Realty
StepStone Realty, LLC - Austin, TX
Freedom to Succeed

Amen, Janna!

Sep 30, 2010 02:08 AM #3
Rainer
154,570
James A. Browning
Browning Real Estate School/REO Institute - International, IT
MRE REOCertified(R) SSCertified

Thank you for sharing your blog; we need Real estate Professionals to share their comments and information regarding their markets and experiences. Thanks again from beautiful Colorado

May 17, 2012 05:42 PM #4
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Rainmaker
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