There is an interesting bill in the Senate that could dramatically affect Denver Short Sales. It appears 3 Senators in D.C. have proposed a law that would require a response from a lender within 75 days of the lender receiving a Short Sale request.
From DSNews.com:
The legislation, also known as the Prompt Notification of Short Sale Act, will require a written response from a lender no later than 75 days after receipt of the written request from the buyer.
The lender’s response to the buyer must specify acceptance, rejection, a counter offer, need for extension, and an estimation for when a decision will be reached. The servicer
By now, it's almost common knowledge how long and drawn out a short sale can take. We've seen buyers and sellers wait on a bank for over 9 months, only to find out that the bank isn't going to accept (and never intended to accept) the short sale offer.
In an ideal word, a shot sale would save not only the Seller and lender from a foreclosure, but would spare the neighborhood from the downward price pressure caused by a nearby foreclosure. Of course, we don't live in an ideal world, and both the banks and the Sellers themselves, can be guilty of "gaming the system" to draw out the process for as long as possible.
While I would love to see the process for Denver short sales speed up, it seems to me that any legislation requiring a fast response from lenders will have to have a balanced approach requiring Sellers to supply their complete financial information in a timely manner.
Our team has listed many, many Denver short sales in the past, and besides the banks, the biggest obstacle we face, is Sellers who are not willing to fill out the required paperwork for the lenders. As agents, we can't list the home without it. The banks can't start a short sale negotiation without it. And absolutely no Buyer can purchase the home without it.
I applaud any action that can help reduce the number of Denver foreclosures, but without addressing all of the issues that slow down a short sale approval, all this law will create is more bureaucracy.
Yes, the banks deserve much of the blame in this, but everyone seems to forget that in every single short sale or foreclosure, the property owner signed an agreement with the bank promising to pay for the property. That agreement has consequences, and one of those consequences is that the bank can foreclose and they do not have to accept a short sale.
Give banks an incentive to approve short sales, and you'll see a dramatic reduction in approval time. Make the process more difficult for banks, and you'll see a decrease in short sale approvals and an increase in foreclosures.
If you would like to talk to our team more about Denver short sales of Denver foreclosures, give us a call at 303-726-1874.
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