NAR Supports Legislation, New Rules on Short Sales
Recently, NAR submitted comments to the Consumer Financial Protection Bureau on its proposals for future mortgage servicing rulemakings. In its letter, NAR officials expressed support for a proposal that calls for development of a single point of contact for borrowers requesting a loan modification or short sale, and the implementation and enforcement of firm deadlines for accurate payoff balance information. NAR also is urging the Bureau to reconsider a proposal that would require servicers to contact delinquent borrowers within 45 days. Instead, NAR suggests a 30 day period for contact would be more appropriate.
Meanwhile, on Capitol Hill NAR is supporting legislation that aims to speed up the approval process for homeowners selling their home through a short sale by requiring subordinate lien holders to review and respond to short sales request within 45 days.
Notably, earlier this summer, the Federal Housing Finance Agency issued new guidance requiring servicers of Fannie Mae and Freddie Mac loans to speed responses to short sale requests – a move that was both welcomed and praised by REALTORS®. Under the new rules which took effect June 15, distressed homeowners whose loans are backed by Fannie and Freddie should expect to receive a decision on a short sale offer within 30-60 days. The GSEs’ new short sale timelines require servicers to make a decision within 30 days of receiving either an offer on a property under the companies’ traditional short sale programs or a completed Borrower Response Package (BRP) requesting short sale consideration, whether it’s through the federal government’s Home Affordable Foreclosure Alternative (HAFA) program or a GSE program. If more than 30 days are needed, servicers must provide the borrower with weekly status updates and come to a decision no later than 60 days from the date the BRP or offer was received. In the event a servicer makes a counteroffer, the borrower is expected to respond within five business days. The servicer must then respond within 10 business days of receiving the borrower’s response.