Washington, D.C. – Tuesday, Congressman Jerry McNerney (CA-09) introduced the Fast Help For Homeowners Act, to help speed up the short sale process and aid homeowners who may otherwise be facing foreclosure.
The bill would require a second mortgage lender of a federal mortgage loan to review and make a decision on a short sale agreement within 45 days. If the lender does not make a decision within that time frame, the short sale will be deemed approved on the 46th day.
“The housing market in my district has improved, but there are still too many homeowners here and around the nation who are struggling even though they have played by the rules,” said Rep. McNerney. “My bill will help those affected homeowners, communities, and small business owners.”
A short sale is a mortgage sales transaction in which the seller’s lender agrees to accept a payment for less than the loan’s remaining balance. In the event of a foreclosure, the second mortgage is subordinate to the first mortgage, and the lender of the first mortgage receives payment first. When a homeowner initiates a short sale request, some second mortgage lenders use stonewalling tactics to delay a payment to the first mortgage lender.
Short sales can help both lenders and homeowners. Often, it is far less costly for a lender to negotiate a short sale agreement than go through the foreclosure process. A short sale is also less damaging to a homeowner’s credit score than a foreclosure.
“The National Association of REALTORS applauds Congressman McNerney for his efforts to improve the short sale process and provide distressed homeowners an alternative to foreclosure,” said Steve Brown, President of the National Association of REALTORS. “NAR stands ready to collaborate with Congressman McNerney and Congress to enact legislation that will help homeowners stave off foreclosure.”
The bill also drew a bipartisan group of original cosponsors, including: Reps. Richard Nugent (R-FL), Thomas Rooney (R-FL), Jim Costa (D-CA), Tony Cardenas (D-CA), Hank Johnson (D-GA), and George Miller (D-CA).