Earlier this week, Florida Republican U.S. Rep. Tom Rooney and New Jersey Democratic U.S. Rep. Rob Andrews reintroduced a measure that would give lenders up to 45 days to decide whether to accept offers on short sales. Rooney and Andrews, who introduced a similar bill in 2010, argued that the bill would help jump the real-estate economy.
In a short sale, the loan owed on the property is less than the proceeds garnered from the sale of the house. Short sales usually take place when the borrower is not able to pay the mortgage and the lender decides to cut their losses through the sale instead of going through the foreclosure process.
Due to the economic crisis, the number of short sales in Florida is rising, but lenders havent always been able to keep pace, said Rooney, who pointed to a study from the National Association of Realtors that found 27 percent of all home sales in the Sunshine State in the last quarter of 2010 were short sales.By requiring lenders to make decisions on short sales within 45 days, this legislation would speed transactions and help prevent homes from going into foreclosure.
Potential buyers can wait for months for a lender to make a decision on a short sale, and that wait often stops a sale from happening, added Andrews. Our bill would require that lenders respond when an offer is made, and will help make sure that these sales happen.Im proud to help Rep. Rooney on this bipartisan effort that will help our constituents who are facing foreclosure.
While the congressmen introduced a similar proposal late in 2010, the bill emerged too late in the session to move forward.
Realtors and lenders cheered the proposal, maintaining that all parties will benefit if the legislation passes.
This bill addresses the biggest obstacle for homebuyers and owners in short sale situations, insisted Patricia Fitzgerald, president of the Florida Association of Realtors.
Its a win for everyone, Michael DAlonzo, president of the National Association of Mortgage Brokers, told Sunshine State News on Wednesday. He maintained that the bill would help sellers, buyers and banks looking to get loans off the books. Its great to get a bipartisan bill like this together.
DAlonzo added that the bill could help rectify some of the problems with short sales currently hindering the market.
Buyers dont want to look at short sales anymore, he said about the current situation. A bill like this will make a short sale a viable option for a buyer. It will improve the market.
Reach Kevin Derby at kderby@sunshinestatenews.com or at (850) 727-0859.
