Do you know about the Short Sale Bill-H.3573?

Do you know about the Short Sale Bill-H.3573?

SOUTH CAROLINA SHORT SALE BILL-H.3573

TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 39-5-180 SO AS TO MAKE IT AN UNLAWFUL TRADE PRACTICE FOR A BANK, BUILDING AND LOAN ASSOCIATION, SAVINGS AND LOAN ASSOCIATION, SAVINGS BANK, OR OTHER FINANCIAL INSTITUTION DOING ANY KIND OF BANKING BUSINESS IN THIS STATE TO FAIL TO RESPOND TO A SHORT SALE OFFER FOR THE PURCHASE OF REAL ESTATE WITHIN THIRTY CALENDAR DAYS OF THE OFFER'S RECEIPT.

As an active member of my state's Legislative Committee, I find this to be a valuable BILL for our real estate market. If you're active REALTOR, Seller, or a Buyer within a real estate transaction-this is a proposal you should get educated on.

As it is currently, mortgage lenders currently don't have a time frame to when they should answer a Short Sale offer. Here is an example of a time frame for a Short Sale:

In most cases, mortgage lenders will take (72) hours to receive a Short Sale package by fax or email. If you send the Short Sale package by mail, you might have to wait up to (2) weeks to get a response that the Short Sale package has been received. After the package has been received, the package is then added to the Short Sale list and will need to be assigned to a Loss Mitigate personnel. This can take anywhere from (2) weeks to(30) days. Once the file is received by a Loss Mitigate personnel, it will take (30-45) days for the package to be reviewed. After the Short Sale package has been reviewed (this will include the time frame for orders of appraisals or BPOs), the Loss Mitigate personnel will either answer the offer, or sometimes the file is sent to a Private Mortgage Insurance department for further review. If the file is sent to this other department, the time frame for a response can be extended an additional (2-3) weeks.

As you can see in this example, the time frame for a closing on a Short Sale can take up to (90) days. The time frame can take longer if there were any documents missing within the Short Sale package that was sent. I know of a few people who have been in a Short Sale transaction and it's already been 9 months.

This Bill (H.3573) is designed to help those who are within a Short Sale transaction. The purpose is to make mortgage lenders make a decision on a time period.

Now, I know some of you are thinking "Ya right, this is an impossible Bill to pass and it will never get done because of the thousands of banks out there". Just so you know, when I first heard about this Bill, I was hesitate about it as well. After doing more research on this Bill and being an Active REALTOR in Short Sale transactions-I strongly feel that if we make a noise about it, something will be done.

I've talked to several REALTORS within my office about this Bill. Believe it or not, the majority of them are against this Bill. Here are their objections:

1. "The government shouldn't get involved because mortgage lenders will stop lending".
2. "Having the government tell the mortgage lenders to put a time frame on answering a Short Sale offer is unnecessary. The investors to thess mortgage institutes will get tired of paying out the money for foreclosures and the market will heal itself".

Here is my answer to these responses:

From 2000 to the beginning of 2007, we had a HUGE BOOM in real estate. During this time frame, not only was I an active REALTOR but I was an active Mortgage Broker as well. If the mortgage lenders said "Lets give them a mortgage", then I did the mortgage. Good, Bad, or no credit-You could get a mortgage. If the government had gotten involved with mortgages during this time frame, we wouldn't have had the kind of real estate boom we had, and we wouldn't be in the situation with our economy right now. As far as mortgage lenders not lending anymore-well, that won't happen. Mortgage lenders will probably tighten up some more, but won't stop lending. In regards to the market "Fixing itself". Well, I'm sure way later down the road we will get back on track with our real estate market. However, a time frame on Short Sale transactions can help us get back on track faster.

I would like to know your feelings on this SC Short Sale BILL-H.3573. Let me know why or why not you agree with this BILL. I will take all feed-backs to my next Legislative committee meeting and voice your concerns with the other committee members.

Thanks for reading,

Anna M. Rose

Certified Short-Sale Professional