Congressman Rob Andrews (NJ-01) and U.S. Rep. Tom Rooney (FL-16) today introduced a bipartisan plan to spur growth in the housing market and prevent unnecessary foreclosures.
The "Prompt Decision for Qualification for Short Sale Act of 2013" requires lenders to decide whether to accept a short sale offer within 30 days, bringing the processing time for short sale price approvals in line with the home-buying and home-selling consumer's expectations. This legislation builds off of previous reforms championed by Representatives Andrews and Rooney. Last year, the Congressmen successfully urged the Federal Housing Finance Agency (FHFA) to require prompt decisions on short sales, however that policy only applies to mortgages backed by Fannie Mae and Freddie Mac. While these federally-backed loans account for approximately 90 percent of new mortgages, the legislation introduced today will not only codify the newly implemented policy but it will apply the 30-day deadline to the remaining 10 percent of mortgages.
"Potential buyers cannot afford to sit and wait for months while lenders drag their feet on short sales," said Rep. Andrews. "Since a short sale cannot go through without the lender's permission, we need to ensure that unnecessary delays by lenders do not turn away buyers when a prudent deal could have been made. Speeding up this process will keep many homeowners out of foreclosure and give our housing market the boost it needs to bounce back."
"The process for improving short sales must be improved so these transactions take less time and close at higher rates. We commend Rep. Andrews for his efforts to address the many ongoing challenges so consumers can better navigate the short sale process," said NJAR President Tina Banasiak.
"A robust housing market is critical to growing our economy and creating jobs in Florida," said the bill's co-sponsor Rep. Rooney. "By streamlining short sales, we can help keep homes out of foreclosure, fuel growth in the housing market, and deliver a needed boost to Florida's economy."
For homeowners who owe more than their home is worth and are in real danger of losing their home, the short sale can help relieve them of the overwhelming financial burden of their mortgage. According to the National Association of Realtors, 422,605 homes were sold short last year. Unfortunately, some consumers have had difficulty executing short sales as lenders have taken months to decide whether to accept proposed short sale prices. This legislation is designed to expedite the process so that underwater homeowners can begin to move on with their lives while ensuring that potential buyers are free from unnecessary delays that hinder our housing market.