A new bill to improve the process for approving short sales may soon bring some relief to distressed home owners who hope to avoid foreclosure. The bill, introduced in the U.S. House on April 12th, 2011 would impose a deadline of 45 days on lenders to respond to short sale requests. The "Prompt Decision for Qualification for Short Sale Act of 2011," was offered in Congress last Tuesday. The current short sale process can be time-consuming and inefficient, and many would-be buyers end up walking away.
Realtors and consumers continue to raise issues about delays in the short sale process, because lenders are unable to decide whether to approve a short sale. After many months of delays, and with no response from lenders, potential buyers are losing patience and cancelling their contracts, often resulting in the property entering foreclosure. A short sale minimizes the negative impact on sellers and generally costs the lender less than a foreclosure.
The purpose of the legislation is to help more home owners avoid foreclosure by facilitating a short sale when a family is absolutely unable to keep their home. Yet, that can only happen if lenders and servicers approve short sale offers in a reasonable amount of time. Streamlining short sales transactions will reduce the amount of time it takes to sell the property, improve the likelihood that the transaction will close and reduce the overall number of foreclosures. This benefits sellers, lenders, buyers and the entire community.
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