For those looking to get a 20-30% discount on the purchase of a home, the short-sale market holds potential for some very good deals. Likewise, on a distressed property owner’s end, a short sale is a much better option than a foreclosure. Unfortunately, the price for some of those deals is mountains of paperwork, unresponsive banks, and an overall lengthy process. This may seem counterintuitive—shouldn’t banks be eager to sell these houses, rather than let them go into foreclosure, where they 1) often sit on the market for long periods, and 2) eventually sell for an even greater discount—i.e., banks get even less of the money they are owed? But I digress…
There may be some good news though. A new bill was introduced which would oblige mortgage companies to respond more quickly to inquiries about potential short sales. The bill, aptly entitled, The Prompt Notification of Short Sale Act, would require mortgage companies to give a written response to home owners within 75 days about whether or not their home could potentially be sold as a short sale. This is also good news for potential buyers.
Currently, a short sale generally takes between four and nine months from start to finish. Because of the length of this process, it’s not uncommon for a home to be foreclosed on, even if a short sale is in progress. A shorter response time would potentially decrease the number of foreclosures.
Will the bill pass? Stay tuned…
