The current real estate meltdown has been a true testing ground for anyone involved in its devastating turbulence. Homeowners have watched helplessly as their property values have headed south with little resistance. Home loan providers have worked under pressure for years to stay afloat in choppy waters full of creepy icebergs and many other deadly maritime hazards. Real estate agents are fighting to secure deals in a marketplace shrunk to a flat pie on life support from a full-blown strawberry cheesecake. The support industries are in it as deep as anyone else.
Something intriguing that could be rather meaningful for many in housing is in the works right now. Namely, the U.S. House just introduced a bipartisan - yes bipartisan, for change - bill that would require mortgage providers to come up with an answer to short sale requests within 45 days. It's common knowledge that mortgage banks usually take their sweet old time in reaching a decision on them. Sometimes they can't even make up their minds at all, ever, no "yes" or "no" at all, just deafening silence or bureaucratic runarounds until participants just give up, throw up their arms in disgust.
Underwater - the mortgage balance is higher than the property's value - homeowners would be big beneficiaries here. They would be informed in 45 days whether a short sale will work or not and then make plans for their next move regardless of the answer. Now they often don't know anything for months and many finally just decide to walk away from the mortgage. Failed short sales are one of the main reasons to climbing walk-away numbers.
First-time home buyers as well as other purchasers would get a much faster response to their offers, helping them with their strategies. The attitude of scores of real estate agents would change for the better toward the frequently ridiculously lengthy and complicated short sale process. Actually, even the mortgage lenders themselves would come out ahead in this, as they would be forced to make a decision and move on.
The bill does have merit aplenty, and should be passed. Who says Washington can't introduce useful housing legislation? Since the private mortgage sector was unable to satisfactorily act on this, the oft-maligned government stepped up to the plate with a well-designed bill that would yield nice dividends for the entire housing industry.