WASHINGTON, D.C. —Following calls from U.S. Sen. Sherrod Brown (D-OH) to jump start the housing market by addressing “short sales,” federal regulators announced plans today to speed up the process for short sales and improve the housing market. Short sales are real estate transactions that must be approved by the bank because the seller owes more on their mortgage than the proposed sale price. The Federal Housing Finance Agency announced today that it will require mortgage servicers to review and respond to short sale requests within 30 days of an offer on the property and make a final decision within 60 days of receiving the offer.
“This is great news for the 25 percent of Ohioans who are underwater on their mortgages,” Brown said. “If we’re going to recover from the housing crisis, we need to make it easier for qualified candidates to purchase homes. Today’s news will help prospective home buyers and distressed homeowners alike, while helping to rebuild our neighborhoods and to foster long-term economic growth.”
Brown introduced legislation in February, the Prompt Notification of Short Sale Act. The bill addresses the lengthy closing process that often comes with a short sale—which can last months—by requiring banks to respond in a timely manner when prospective buyers are attempting to purchase such homes. The goal of The Prompt Notification of Short Sale Act is to improve the process for buyers considering a “short-sale” home. Presently, it can take many months to get any kind of response from banks or other loan servicers to short sale offers. Brown’s legislation requires a written response of an acceptance, rejection, counter offer, or the need for an extension of time within 75 days of a request from a homeowner—thereby providing both buyers and sellers of short sale properties with predictability during a real estate transaction. Brown was joined by homeowners and realtors in Cleveland and Columbus to outline how this legisation would improve the process for both sellers and buyers involved in “short sale” transactions and bolster the housing market and our economic recovery.