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Short Sales May Get Shorter

short sale

A new bill has been introduced in an effort to speed up time-consuming short sale transactions.

The legislation, H.R. 6133, also known as “Prompt Decision for Qualification of Short Sale Act of 2010,” was offered up this week in Congress by U.S. Representatives Robert Andrews (D-N.J.) and Tom Rooney (R-Fla.).

It would require banks and mortgage lenders to respond to consumer short sale requests within 45 days.

A number of consumers have noted that the delay in short sale approvals often exceeds 90 days, and in some cases never arrives, causing homeowners to walk away instead.

“The short sale, which requires lender approval, is an important instrument for homeowners who owe more than their home is worth,” said National Association of Realtors (NAR) President Vicki Cox Golder, in a release promoting the bill.

“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.”

This is a growing problem, given the rising number of potential short sales.

Per NAR data, 32 percent of Nevada properties on the market in the second quarter of 2010 were potential short sales.

Similar numbers were seen in California (28%), Florida (27%), and Arizona (24%).

“Potential homebuyers are walking away from purchasing short sale property because the lender has taken many months and still not responded to their request for an approval of a proposed short sale price,” Golder added.

Most real estate agents recommend that prospective buyers avoid short sales because of the associated uncertainty, so maybe this would improve the situation and help chip away at all that inventory.

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