April 18, 2011
Nash Law Firm
By: Stephen J. Nash
Reps. Tom Rooney (R-Florida) and Robert Andrews (D-New Jersey) have introduced a bill that would impose a 45 day period for lenders to approve or reject a short sale request. Sounds great but would it really help?
The last four years have shown that if lenders don't want to do something, they won't do it. If the lenders really thought it was in their interest to streamline the short sale process wouldn't they have already done so? Obviously, they have decided the cost of streamlining the process is not worth the anticipated result.
Some would say that that is why such a law is needed. This will force the lenders to comply. I think instead of forcing lenders to spend time and money learning how to comply with the law, it will instead result in one of two outcomes:
1. They simply never acknowledge receipt of all of the necessary documents. Anybody has spent any time working on short sales have learned that the lenders have turned losing documents into an art form. By doing so, the 45 day period never starts.
2. They simply reject the short sale request within the 45 day period as a matter of course but allow you to continue to seek approval if you so chose.
Some would say that I'm too pessimistic. I would be the first to admit, that I will not believe that the lenders will ever make the short sale process better until I actually see it. For those of you who are more optomistic, I would ask you how well did the 30 day HAMP modification or the 10 day HAFA approval process worked for you?.
Of course, none of this matters unless and until the bill actually gets passed. What you may not know is that this bill has been submitted in past years and has failed to pass.
While we can all dream about simpler, quicker short sales, to date, it has been nothing more than a dream. On the bright side, you can bring real value to upside down homeowners by becoming educated in short sales so that you can help get them through a complex and frustrating short sale process.