Ohio Senator Attempts to Speed the Short Sale Process
Senator Sherrod Brown (D-Ohio) has introduced legislation to address the lengthy process of completing real estate short sales. The process continues to frustrate all parties involved and frequently results in offers being withdrawn and sales falling through. A short sale is one in which the lender agrees to accept less than the balance on its mortgage in order to expedite the sale of the home to a private buyer. </p
Last week Brown introduced the Prompt Notification of Short Sale Act which will require banks to respond in a timely manner when a prospective buyer is attempting to buy one of these underwater homes. Brown’s legislation requires a written response of an acceptance, rejection, counter offer, or the need for an extension of time within 75 days of a request from a homeowner-thereby providing both buyers and sellers of short sale properties with predictability during a real estate transaction. The Senator’s office said that about 25 percent of Ohio homeowners owe more to the bank than their homes are worth.</p
In introducing his legislation Brown said, “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. If we’re going to recover from the housing crisis, we need to make it easier for qualified candidates to purchase homes. This commonsense legislation helps prospective home buyers and distressed homeowners alike, while helping to rebuild our neighborhoods and to foster long-term economic growth.</p
Presently, it can take many months to get any kind of response from banks or other loan servicers to short sale offers. Buyers, sellers, real estate agents, and loan officers have all complained about the process which often requires multiple signatures to get the initial offer approved. Any additional adjustments to the sale such as might result following the appraisal or a housing inspection can set the process almost back to the start, with more signatures and paperwork required. The Senator said that often during the short sale process there is a break in communication between the loan servicers and the prospective buyer and buyers are not kept informed about the status of their sale.
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