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Breaking Short Sale News: H.R. 6133 Will Force Lenders To Take Action On Short Sales Faster.. It appears that we will see some greater support in the form of actual Short Sale Laws from our government…Limiting the time a bank can respond to a short sale request from it’s borrowers… Rep. Robert Andrews (D-NJ) and Rep. Tom Rooney (R-FL) have introduced a bill in the house H.R. 6133 – Prompt Decision for Qualification of Short Sale Act of 2010; that would force lenders to make a yes or no decision on a short sale within 45 days of the short sale request. This could be huge in facilitating short sales. There appears to be widespread support for the bipartisan proposal. The National Association of Realtors supports the effort, and NAR President Vicki Cox Golder said: “As the leading advocate for homeownership issues, NAR believes that quicker attention to the short sales process is vital to help homeowners who are underwater and their communities, as well as the nation’s economy”. What is a short sale: A short sale occurs when the homeowner sells the house for less money than is owed on the mortgage. In order to conduct a short sale, the seller needs the permission of the lender. The shortfall between the sale price and the value of the mortgage is often forgiven by the lender. One of the huge downfalls of short sales is they can take an incredibly long time to get approved. Often the approval for a short sale takes 90 to 120 days (or more), by which time the potential buyer has walked away. Here is the actual legislation: H.R.6133 — Prompt Decision for Qualification of Short Sale Act of 2010 (Introduced in House –
IH) 111th CONGRESS 2d Session H. R. 6133To require the lender or servicer of a home mortgage, upon a request by the homeowner for a short sale, to make a prompt decision whether to allow the sale. IN THE HOUSE OF REPRESENTATIVES September 15, 2010Mr. ANDREWS (for himself and Mr. ROONEY) introduced the following bill; which was referred to the Committee on Financial Services
A BILLTo require the lender or servicer of a home mortgage, upon a request by the homeowner for a short sale, to make a prompt decision whether to allow the sale.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress
assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Prompt Decision for Qualification of Short Sale Act of 2010′.
SEC. 2. PROMPT DECISION REGARDING SHORT SALE.
(a) In General- Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is amended–
`SEC. 129B. PROMPT DECISION REGARDING SHORT SALE.
`(a) Requirement- Except as provided in subsection (b) and notwithstanding any other provision of law or of any
contract, including a contract between a servicer of a residential mortgage loan and a securitization vehicle
or other investment vehicle, if the mortgagor under a residential mortgage loan submits to the servicer of the
mortgage loan a written request for a short sale of the dwelling or residential real property that is subject
to the mortgage, deed or trust, or other security interest that secures the mortgage loan, and all information
required by the servicer in connection with such a request (including a copy of an executed contract between
the owner of the dwelling or property and the prospective buyer that is subject to approval by the servicer),
and the mortgagor does not receive from the servicer, before the expiration of the 45-day period beginning upon
receipt by the servicer of such request and information, a written notification of whether such request has
been approved, that such request has been approved subject to specified changes, or that additional information
is required for such a determination, such request shall be considered to have been approved by the servicer.
`(b) Inapplicability to Certain Existing Mortgages- Subsection (a) shall not apply with respect to any
residential mortgage with respect to which the mortgagor and the mortgagee or servicer have entered into a
written agreement before the date of the enactment of the Prompt Decision for Qualification of Short Sale Act
of 2010 explicitly providing a procedure or terms for approval of a short sale.
`(c) Treatment of Other Time Limits- This section may not be construed to preempt, annul, or otherwise affect
any other provision of law or of any contract or program that provides a shorter period than is provided under
subsection (a) for a decision by the servicer of a residential mortgage loan regarding a short sale of the
dwelling or residential real property that is subject to the mortgage, deed or trust, or other security
interest that secures the mortgage loan.
`(d) Definitions- For purposes of this section, the following definitions shall apply:
(b) Applicability- The amendment made by subsection (a) of this section shall apply to any written request for
a short sale made after the date of the enactment of this Act.
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