Short Sale Bill Delivering Housing Results Before Votes Are Cast

Statement

The "short sale" legislation introduced by Senators Scott Brown (R-MA), Lisa Murkowski (R-AK), and Sherrod Brown (D-OH) in February to improve the nation's housing market has already created momentum and movement within the industry -- without a U.S Senate vote occurring on the floor.

This week, the Federal Housing Finance Agency (FHFA) directed Fannie Mae and Freddie Mac to adopt guidelines similar to those in the bipartisan legislation, and put an end to the needless waiting game for potential buyers -- and housing industry officials credit the bill with bringing attention to the issue.

"I'm encouraged that the Administration's proposals resemble those in the bill that Senator Murkowski, Brown and myself introduced which will shorten the period that buyers and sellers have to wait for short sales," said Senator Brown of Massachusetts. "Short sales can play an important role in our economic recovery when the housing market is still struggling. We need every tool in the toolbox to help get our economy back on track."

"Whether it's through Congressional action or industry initiatives, there are many ways to open the lines of communication," said Senator Murkowski. "I'm proud that the legislation I crafted with my colleagues is getting results and will help potential buyers get answers -- but the need is bigger than one agency; we still need a national standard for all lenders."

"This is great news for the 25 percent of Ohioans who are underwater on their mortgages," Senator Brown of Ohio said. "If we're going to recover from the housing crisis, we need to make it easier for qualified candidates to purchase homes. This news will help prospective home buyers and distressed homeowners alike, while helping to rebuild our neighborhoods and to foster long-term economic growth."

On February 16th, Senators Lisa Murkowski, Scott Brown and Sherrod Brown introduced The Prompt Notification of Short Sale Act to create a fixed timetable for real estate transactions to be accepted, denied or countered by the lending bank. Presently, when owners owe more on their house then the selling price and are willing to take a loss, it can take months on end for banks to even respond to potential buyers. The legislation would compel banks to give an answer or an extension within 75 days or face a fine.

The National Association of Realtors credited Murkowski and her colleagues for this week's move -- but say the bill is still needed. "Their leadership on this issue helped raise the attention needed to make the short sales process more efficient," said NAR President Moe Veissi. "While these new guidelines will hopefully help close short sale transactions at higher rates, we believe legislation is still needed to impose mandatory deadlines on all loan servicers."

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