Apparently, there’ some major confusion about Senate Bill 306 floating around out there!
Approved by the Governor in August, the bill–which contains several changes to real estate-related laws and is set to come into effect on the first of next year–has been misrepresented by some as–among other things–a piece of legislation that will institute a 21-day deadline for short sale approvals. However, this is not the case.
What the bill actually does is require lenders to respond to a request for a short-pay demand statement within 21 days after the approval has been granted–not to approve the sale within 21 days. And, even at that point, the lender still has the option to respond–in writing, of course–that they have decided not to move forward with the proposed transaction.
Another article of the bill that may be causing confusion is the one that states that lenders must approve short sale closing statements within four days or else the statement will be deemed approved as long as it isn’t in obvious conflict with the terms of the short-pay agreement or demand statement given to the escrow holder. What it does not say, however–as some seem to think–is that the lender is bound to a short payoff amount on an offer the lender has not approved.
The bill does make a couple of pretty noteworthy changes, though. The current requirement that lenders contact certain borrowers to discuss options for avoiding foreclosure at least 30 days prior to filing a notice of default has been expanded to include owner-occupied residential property with two-to-four dwelling units as well as owner-occupied residences, and the requirement that lenders record a notice of sale 14 days prior to a trustee’s sale has been extended to 20 days (though it does not change the existing requirement that lenders wait at least 20 days after mailing a notice before conducting the sale).
So, if we all spread the word, hopefully the confusion will be cleared up by the time the law goes into effect on January 1!
Christina Inman, the CEO of TheAgentCenter.com, has been a real estate industry specialist, author and broker for 17 years.
Popularity: 1% [?]
Print This Post