News: Prompt Decision on Short Sales

On September 20, 2010, in Message/News Board, Real Estate, by Robbie L. Vaughn, Esq.

A new Bill (H.R.6133) before the United States House of Representatives would require the lender or servicer of a home mortgage, upon a written request by the homeowner for a short sale, to render a decision or request additional information regarding the proposed sale within 45 days.

A BILL

To require the lender or servicer of a home mortgage, upon a request by the homeowner for a short sale, to make a prompt decision whether to allow the sale.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Prompt Decision for Qualification of Short Sale Act of 2010′.

SEC. 2. PROMPT DECISION REGARDING SHORT SALE.

(a) In General- Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is amended–

(1) by redesignating the second section 129, as added by section 201(b) of the Helping Families Save Their Homes Act of 2009 (Public Law 111-22; 123 Stat. 1638), as section 129A; and

(2) by inserting before section 130 (15 U.S.C. 1640) the following new section:

`SEC. 129B. PROMPT DECISION REGARDING SHORT SALE.

`(a) Requirement- Except as provided in subsection (b) and notwithstanding any other provision of law or of any contract, including a contract between a servicer of a residential mortgage loan and a securitization vehicle or other investment vehicle, if the mortgagor under a residential mortgage loan submits to the servicer of the mortgage loan a written request for a short sale of the dwelling or residential real property that is subject to the mortgage, deed or trust, or other security interest that secures the mortgage loan, and all information required by the servicer in connection with such a request (including a copy of an executed contract between the owner of the dwelling or property and the prospective buyer that is subject to approval by the servicer), and the mortgagor does not receive from the servicer, before the expiration of the 45-day period beginning upon receipt by the servicer of such request and information, a written notification of whether such request has been approved, that such request has been approved subject to specified changes, or that additional information is required for such a determination, such request shall be considered to have been approved by the servicer.

`(b) Inapplicability to Certain Existing Mortgages- Subsection (a) shall not apply with respect to any residential mortgage with respect to which the mortgagor and the mortgagee or servicer have entered into a written agreement before the date of the enactment of the Prompt Decision for Qualification of Short Sale Act of 2010 explicitly providing a procedure or terms for approval of a short sale.

`(c) Treatment of Other Time Limits- This section may not be construed to preempt, annul, or otherwise affect any other provision of law or of any contract or program that provides a shorter period than is provided under subsection (a) for a decision by the servicer of a residential mortgage loan regarding a short sale of the dwelling or residential real property that is subject to the mortgage, deed or trust, or other security interest that secures the mortgage loan.

`(d) Definitions- For purposes of this section, the following definitions shall apply:

`(1) RESIDENTIAL MORTGAGE LOAN- The term `residential mortgage loan’ means any consumer credit transaction that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on a dwelling or on residential real property that includes a dwelling, other than a consumer credit transaction under an open end credit plan or an extension of credit relating to a plan described in section 101(53D) of title 11, United States Code.

`(2) SECURITIZATION VEHICLE- The term `securitization vehicle’ means a trust, special purpose entity, or other legal structure that is used to facilitate the issuing of securities, participation certificates, or similar instruments backed by or referring to a pool of assets that includes residential mortgage loans (or instruments that are related to residential mortgage loans, such as credit-linked notes).

`(3) SERVICER- The term `servicer’ has the meaning provided in section 129A, except that such term includes a person who makes or holds a residential mortgage loan (including a pool of residential mortgage loans) if such person also services the loan.

`(4) SHORT SALE- The term `short sale’ means the sale of the dwelling or residential real property that is subject to the mortgage, deed or trust, or other security interest that secures a residential mortgage loan that–

`(A) will result in proceeds in an amount that is less than the remaining amount due under the mortgage loan; and

`(B) requires authorization by the securitization vehicle or other investment vehicle or holder of the mortgage loan, or the servicer acting on behalf of such a vehicle or holder.’.

(b) Applicability- The amendment made by subsection (a) of this section shall apply to any written request for a short sale made after the date of the enactment of this Act.

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Will I Lose My House or Car If I File Chapter 7 Bankruptcy?

On July 15, 2010, in Bankruptcy, by Robbie L. Vaughn, Esq.

Will I lose my home or car if I file for chapter 7 bankruptcy?

Usually not.

In most cases you will not lose your home or car during your bankruptcy case as long as you can exempt the equity, if any exists, in your home or car. In New York, a person is currently allowed a fifty thousand dollar ($50,000.00) homestead exemption and a twenty-four hundred dollar ($2,400.00) motor vehicle exemption. If the property is exempt it may not be taken by the trustee.

However, bankruptcy does not automatically make a valid lien, mortgage or other security interest go away.  Therefore, if you don’t make your payments on that debt, the creditor may be able to take and sell your home or car, during or after the bankruptcy case. Technically, a creditor can repossess your car even if your  payments are current. The law requires you to redeem, surrender or reaffirm the vehicle (your bankruptcy attorney should advise you about this issue).

As always, The Long Island Bankruptcy Law Firm of VAUGHN & WEBER, PLLC is here to assist you.  We are conveniently located in the heart of Nassau County, Long Island, at 217 Willis Avenue in Mineola, NY 11501.  Contact us at (516) 858-2620 to arrange a consultation with a bankruptcy Attorney.

Please visit our Bankruptcy category to learn more about filing bankruptcy.

Remember:  The law often changes, and each case is different. The above is meant to give you general information, and not to give you specific legal advice.

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