Short Sale Closings May Soon Be On a Fast Track

Think the housing market is starting to turn around? Not so fast. According to RealtyTrac, short sale transactions in 2012 accounted for 22% of all transactions. Add that to foreclosed properties and the total distressed properties accounted for 43% of all real estate transactions.

What is equally worrisome for these homeowners who are trying to move on from these short sale and foreclosed homes is the length of time it takes to close the transactions. In a short sale transaction, the homeowner has turned over the negotiating power to the lender, leaving them frustrated and waiting for answers.

But now U.S. Rep. Tom Rooney (FL-17) is introducing legislation to speed up short sales transactions by requiring lenders to decide whether to accept an offer within 30 days in an attempt to keep them out of foreclosure status.

Short sale transactions typically take up to four months to sell or longer and many homeowners cannot afford to wait that long. Some end up in foreclosure status waiting for the transaction to finalize. Rep. Rooney’s proposed legislation intends to speed up this process and eliminate unnecessary delays.

Short sales are a good alternative for homeowners who owe more than their home is worth and they are trying to avoid foreclosure. These homeowners are no longer able to pay their mortgage and work with their lender to sell their home for less than it is worth and agree to forgive the balance of the loan.