CLEVELAND, OH—With nearly 25 percent of Cuyahoga County homeowners underwater on their mortgages, U.S. Sen. Sherrod Brown (D-OH) today unveiled a new plan to improve the housing market by addressing “short sale” home sales. 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. Brown’s legislation, the Prompt Notification of Short Sale Act, 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.
“For most buyers, short sales are anything but. The seemingly endless waiting game associated with short sales represents a dangerous drag on our housing market,” Brown said. “If we’re going to recover from the housing crisis, we need to make it easier for qualified candidates to purchase homes. This commonsense legislation helps prospective home buyers and distressed homeowners alike, while helping to rebuild our neighborhoods and to foster long-term economic growth.
“Too often during the short sale process, there is a lengthy break in communication between the loan servicer and the buyer of the short sale property. This breakdown deprives buyers notice of whether or not their offer has been accepted, rejected or countered—and that means that homes aren’t being sold, even when there is a demand,” Brown continued. “This lapse in communication makes it harder for families to move to Cleveland and help us build our community, and potential buyers are left waiting or even walking away in frustration. This bill is aimed at improving communication between banks and homebuyers—and keeping homes in our neighborhoods occupied. Our economic recovery depends on our housing recovery.”
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 Victoria Machor, a former homeowner in Lorain County who struggled to resolve the short sale of her home with her bank for more than a year; with the assistance of Brown’s office, she ultimately sold her home, albeit at a lower price than she had been originally offered by a buyer. Brown, Machor, and Cleveland-area realtor Seth Task outlined how The Prompt Notification of Short Sale Act would improve the process for both sellers and buyers involved in “short sale” transactions and bolster the housing market and our economic recovery.