Bill Proposed to Shorten Short Sale Timeline

Three senators (Scott Brown from Massachusetts, Sherrod Brown from Ohio and our very own Lisa Murkowski from Alaska) have proposed a bill that will help shorten the time it takes to complete a short sale.  This will help prevent more American homeowners, including those here in Anchorage, from losing their homes to foreclosure.  In order to sell your Anchorage home in a short sale, you must reach an agreement with your lender where they allow you to sell your home for less than is owed.  This happens when the homeowner is struggling to make their monthly mortgage payment, is facing the possibility of foreclosure and owes more on their home than it is worth, making it difficult to sell it via a traditional home sale.

Right now, an Anchorage short sale can take anywhere from four to nine months to complete.  The bank has final say in whether to accept an offer on the Anchorage home in question or not.  Sellers are finding that buyers get restless waiting for the transaction to move along and decide to walk away from the deal in frustration.  This translates into more unnecessary foreclosures.  The senators have proposed that a law (aka the Prompt Notification Short Sale Act) require lending institutions to respond in writing within 75 days of the buyer's initial written request or face financial penalties.

Studies have shown that buyers have no problem buying a home via short sale.  They just want it to be done in a more manageable time frame.  While foreclosures tend to bring down the home values of the neighborhoods they are located in, short sales do not have this impact.  Previous;y proposed legislation required banks to respond within 45 days of the initial written buyer offer, but this never even made it to debate, presumably because this was considered much too short a time frame for lending institutions to conform to.  The 75 day time frame seems much more reasonable.

This much is true: short sales are helpful to the Anchorage real estate market.  They prevent homeowners from losing their property to foreclosure, the seller gets a good deal and the banks don't have to deal with the expense of having to get the property back and resell it to someone else.  It's a win-win for everyone if this bill to shorten the short sale timeline can be passed.  Let your congressman know how you feel about it today.  And, thank you Senator Murkowski for looking out for all us Alaska homeowners.

Pauline Hofseth, your Anchorage real estate specialist

Originally posted on my Anchorage real estate blog here: http://activerain.com/blogsview/3015596/bill-proposed-to-shorten-short-sale-timeline.