Requirement for short sale approvals
Unfortunately, the recently adopted Senate Bill 306 does not mandate a 21-day turnaround for short sales as commonly misinterpreted. However, the new legislation does address many escrow procedures needed to expedite the daunting short sale process; including the addition of presenting lenders with a short pay off amount request that requires they respond within 21 days. Their response, typically mediated through escrow, gives banks the opportunity to then remit a short-pay demand statement however, also reserves their right to refuse and terminate the transaction.
The new law also contains regulations on short sale approvals subject to lender’s review of the property’s closing statement. What once was a typically lengthy process has now been limited to review time of four days. If no action has been taken by the lender within the four day window, the closing statement shall be deemed approved, as long as it is “not clearly contrary to the terms of the short-pay agreement or the short-pay demand statement provided to the escrow holder.”
Effective January 1, 2010, all regulations mentioned, along with the remaining legislations encompassed within Senate Bill 306, come into effect.
Follow the link for more information on Senate Bill 306.
http://www.leginfo.ca.gov/pub/09-10/bill/sen/sb_0301-0350/sb_306_bill_20090806_chaptered.pdf
