The Silicon Valley Association of REALTORS® (SILVAR) joins its counterparts at the state and national level in supporting the passage of the Fast Help For Homeowners (FHFH) Act. The proposed legislation, introduced by Congressman Jerry McNerney (D-Stockton), would help speed up the short sale approval process by requiring subordinate lien holders to respond to short sale requests within 45 days.
The short sale bill would establish guidelines requiring the primary lien holder to inform secondary and any subsequent lien holders of a request for short sale. The bill would also impose a 45-day deadline for subsequent lien holders to respond to both the primary lender and the consumer following a short sale request.
"We support any effort toward improving and speeding up the short sale process for distressed homeowners who are seeking an alternative to foreclosure," said SILVAR president Suzanne Yost.
Both the National Association of REALTORS® (NAR) and California Association of REALTORS® (C.A.R.) have come out in support of the proposed bill. According to the REALTOR® trade associations, members continue to report that short sale transactions are being held up due to a lack of response regarding acceptance of short sale requests.
Early findings from a recent lender satisfaction survey conducted by C.A.R. found that nearly half of all properties sold as short sales in California had subordinate liens. Additionally, communicating with the holders of the subordinate liens often created obstacles to closing these transactions.
"Short sale transactions are difficult as is. When subordinate lien holders refuse to respond to offers, additional unnecessary barriers to homeownership are created. The FHFH Act will eliminate this major hurdle," said C.A.R. president LeFrancis Arnold.
NAR has been actively pushing the mortgage servicing industry for years to improve the short sale review and approval process, especially in cases where second liens are involved. "Second mortgage lien holders frequently hold up and cancel the short sale transaction while trying to collect the largest possible payout in exchange for releasing the homeowner's lien, even though the secondary lien holder often gets nothing if the home ends up going into foreclosure," said NAR president Moe Veissi.
REALTORS® contend that streamlining the short sale approval process for both primary and secondary lien holders will help close more short sale transactions. They are urging the swift passage of the Fast Help for Homeowners Act. "We continue to support thoughtful reform that will improve the short sale process for homeowners," said Yost.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
For further information, please email or call the SILVAR office at (408) 200-0100.