U.S. Rep. Robert Andrews (NJ-1) today announced that the Federal Housing Finance Agency (FHFA) is implementing a bipartisan plan he proposed with U.S. Rep. Tom Rooney (FL-16) to require prompt decisions on short sales. Andrews said the reforms to the short sale process will help prevent foreclosures and spur growth in the housing market.
"Potential buyers cannot afford to wait for months for a lender to make a decision on a short sale," said Rep. Andrews. "By holding mortgage servicers to a deadline to review and respond to short sale requests, less homes will be forced into foreclosure and our economy will benefit from quicker transactions."
"The biggest obstacle Florida homeowners and realtors face to completing short sales is that lenders take too long to approve the sales, and buyers walk away," Congressman Rooney said. "By asking lenders to make prompt decisions on approving short sales, we can help prevent foreclosures, keep homes occupied, and get Florida's housing market moving again."
"Streamlining short sale transactions when a family is absolutely unable to keep their home benefits sellers, lenders and the entire community by reducing the negative impact of foreclosure," said NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami. "We are appreciative of efforts to speed lender responses and improve the short sale process, and hope that these new guidelines will help bring relief to distressed homeowners, but we still need legislation to make it mandatory for all servicers to reply by a deadline. Realtors thank Representatives Tom Rooney (R-FL) and Rob Andrews (D-NJ) for their leadership on this issue. By introducing H.R. 1498, they helped raise the needed attention to get this done"
Under the new guidelines for Fannie Mae and Freddie Mac, which back approximately 90 percent of new mortgages, mortgage servicers must review and respond to short sale requests within 30 days, and make a final decision within 60 days. The new policy is in line with the Rooney-Andrews "Prompt Decision for Qualification for Short Sale Act of 2011," HR 1498, which requires a decision within 45 days for all short sales.
Congressmen Andrews and Rooney will continue their efforts to pass their bipartisan legislation to ensure that all homeowners and buyers can benefit from an improved, expedited short sale process.