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Congress Jumps in to Help Short Sales Move in the Right Direction

One of the biggest frustrations with the short sale process has been the amount of time it takes to get an approval.  Undoubtedly, lenders have been overwhelmed with the volume of short sales, however, they may not have a choice but to ramp up their ability to timely participate in the process.  The United States Congress is apparently aware of the problem as well.  Senators Lisa Murkowski (R-Alaska), Scott Brown (R-Massachusetts), and Sherrod Brown (D-Ohio) recently proposed a bill addressing the issue of short sales.  “There are neighborhoods across the country full of empty homes and underwater owners that have legitimate offers, but unresponsive banks,” said Murkowski. “What we have here is a failure to communicate. Why don’t we make it easier for Americans trying to participate in the housing market, regardless of whether the answer is ‘yes,’ ‘no’ or ‘maybe?’ The legislation, also known as the Prompt Notification of Short Sales Act, will require a written response from a lender no later than 75 days after receipt of the written request from the buyer.  The lender’s response to the buyer must specify acceptance, rejection, a counter offer, need for extension, and an estimation for when a decision will be reached. The servicer will be limited to one extension of no more than 21 days.  The bill will also allow the buyer to be awarded $1000, plus “reasonable” attorney fees if the Act is violated.  Congressman Brown undoubtedly understands the problem.  “For most buyers, short sales are anything but. The seemingly-endless waiting game associated with short sales represents a dangerous drag on our housing market,” Senator Sherrod Brown said. “If we’re going to recover from the housing crisis, we need to make it easier for qualified candidates to purchase homes. This common-sense legislation helps prospective home buyers and distressed homeowners alike, while helping to rebuild our neighborhoods and fostering long-term economic growth.” Amen.

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