Here’s a sobering fact: short sales in San Mateo County comprise more than 50 percent of the home sale transactions.
The majority of those homes have second mortgages and, of those short sales, many are occurring to stave off a foreclosure. A federal bill to help home owners could not have come at a better time.
The proposed legislation (H.R. 6153) is known as the "Fast Help For Homeowners Act” and was introduced by U.S. Rep. Jerry McNerney, D-Stockton/Pleasanton. It will help speed up the short sale approval process by requiring secondary lien holders (companies that handle second and subsequent mortgages) to respond to short sale requests within 45 days.
But here’s the kicker: if the holder of a subordinate lien fails to respond within the 45-calendar day period, "the request from a mortgagor shall be considered to have been approved by such lien holder.”
As part of our ongoing mission to serve as "the voice” for real estate in San Mateo County, SAMCAR (the San Mateo County Association of Realtors) is joining forces with state and national Realtor associations and consumer groups in supporting passage of the Fast Help For Homeowners Act.
The bill is co-sponsored by a bipartisan group consisting of U.S. Reps. Denis Cardoza, (CA-18); Jim Costa, (CA-20); Barbara Lee, (CA-9); and, George Miller, (CA-7) — all Democrats — as well as Richard Nugent, (FL-5) and Thomas J. Rooney, (FL-16) — both Republicans.
Congress will have a chance to demonstrate to the American public that homeownership matters by taking swift action on H.R. 6153 when it returns on Sept. 10 from its summer recess.
SAMCAR is supporting and urging the quick passage of the FHFH Act as it will require those who service second, third and succeeding home loans to respond to short sale offers in a fair and reasonable amount of time, ensuring distressed properties are brought to market, which will aid in the recovery of the housing market and the general economy.
LeFrancis Arnold, president of the California Association of Realtors observed: "Short sale transactions are difficult as it is ... when subordinate lien holders refuse to respond to offers, additional unnecessary barriers to homeownership are created. The FHFH Act will eliminate this major hurdle.” A recent lender satisfaction survey by C.A.R. found that nearly half of all properties sold as short sales in California had subordinate liens (second mortgages).
On the national front, Moe Veissi, 2012 president of the National Association of Realtors, noted it has been actively pushing the mortgage servicing industry for years to improve the short sale review and approval process, especially in cases where second mortgages are involved. Veissi said second mortgage lien holders frequently hold up and/or cancel the short sale transaction while trying to collect the largest possible payout in exchange for releasing the homeowner’s debt even though the secondary mortgage holder often gets nothing if the home ends up going into foreclosure.
SAMCAR strongly supports streamlining the short sale approval process for both primary and subsequent mortgage holders as it will help close more short sale transactions in San Mateo County, but more importantly, congressional approval will positively impact the quality of life in communities throughout the United States and in San Mateo County.
Anne Oliva, the 2012 president of the San Mateo County Association of Realtors, is a Realtor and a principal in Marshall Realty in San Bruno.