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Lending Institutions have to respond to an Offer in 10 days.10-day limit on short sales may spur housing market. By Paul Owners Sun Sentinel Homeowners stuck while banks mull whether to approve short-sales could benefit from new federal guidelines that give lenders a 10-day limit to respond to offers. The rules from the U.S. Treasury, which also allow for financial incentives to sellers and lenders, likely will figure prominently in South Florida as the housing slump meanders into a fifth year. “The cloud could be lifted,” said Domenic Faro of Fort Lauderdale Real Estate firm. “This could bring us back to some normalcy.” In a short sale, the homeowner sells the property for less than what’s owed on the mortgage, and the lender forgives the difference. While short sales are considered an ideal solution for banks and for “under water” homeowners on the verge of foreclosure, the deals often drag on as lenders take weeks or months to decide what to do. Frustrated buyers walk away during the delays. In some cases, lenders insist that borrowers share in the financial loss, holding up the transactions even longer. As a result, homes stay on the market, prolonging the housing downturn. Aside from imposing a 10-day deadline, the Treasury rules call for sellers to receive $1,500 moving allowances, and the sellers will not have to repay any of the debt. Affected Banks The 83 loan servicers participating in the Obama Administration’s Home Affordable Modification Program, including Bank of America and JPMorgan Chase, are required to follow these guidelines for all borrowers who request short sales or who did not complete loan modifications. The rules do not specifically apply to loans guaranteed by Fannie Mae or Freddie Mac, which represent about half of all the The Treasury plan, which must be implemented by lenders no later than April, is meant to help sellers like Dawn Sciafani, who has been waiting since October for her lender to approve a short sale offer on her Sciafani, a 50-year-old psychologist, said she’s eager for the bank to approve the deal so she can put the experience behind her. “I’ve heard that this is a horrendous process”, she said. “The banks are just not very cooperative. I do believe these new rules will help.”
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