Wednesday, May 23, 2012 | 3:53 p.m.
Sen. Dean Heller now has a hat trick of housing bills before the Senate, after formally unveiling a bill to help expedite short sales Wednesday.
Heller’s new bill is mostly an effort make all mortgage service providers subject to the same policies being implemented next month by federal lenders Fannie Mae and Freddie Mac.
The bill—like the policy that applies to federal lenders—stops short of forcing lenders to let more underwater homeowners complete short sales. Rather, it would prevent lenders from leaving underwater homeowners hanging for more than a month as they consider whether to approve a short sale.
“Home buyers, sellers and real estate agents have long observed that banks have been slow to approve home short sales,” Heller said Wednesday. “Delays can cause cancelled contracts and homeowners being forced into foreclosures. Though short sale is seen as a far better outcome than foreclosure finding ways to improve this process and make this process more efficient has been very very difficult.”
Heller’s bill would require mortgage servicers to respond to short sale purchase offers within 30 days and issue a final decision within 60 days -- the same timeline as Fannie and Freddie must adhere to starting in June
By most casual estimates, it now takes between three and nine months to complete a short sale. According to an April report from the mortgage finance experts at RealtyTrac, the average time it takes from the start of the foreclosure process to when a sale is completed is 10.5 months—up from four months in 2007. Plus, only about a quarter of short sales ever actually go through.
Whether the changes in Heller’s bill could improve those statistic isn’t clear. But short sales are already on the rise.
RealtyTrac has identified a coming short sale tsunami in 2012, as more banks agree to start foreclosure proceedings -- and favor the short sale option.
In Southern Nevada, short sales made up about 28 percent of all sales this January -- a jump of about 38 percent over what it was a year before.