Short sales-90 day response

SHORT SALES
The Senate Judiciary Committee approved a modified version of Senate Bill 1259 this week.  You will recall that this bill is related to short sales.  In its current form, SB 1259, sponsored by Senator Jacqueline Collins, makes changes to the Code of Civil Procedure to add a section entitled “Short sale in foreclosure”.  The new section defines “short sale” and specifies that in a foreclosure of residential property, if (i) the mortgagor presents to the mortgagee, a bona fide written offer from a third party to purchase the property that is the subjection of the foreclosure proceeding, (ii) the written offer to purchase is for an amount which constitutes a short sale of the property, and (iii) the mortgagor makes a written request to the mortgagee to approve the sale on the terms of the offer to purchase, the mortgagee must respond to the mortgagor within 90 days after receipt of the written offer and written request.  The mortgagee shall determine whether to accept the short sale offer.  The legislation further provides that the failure to accept the offer shall not impair or abrogate in any way the rights of the mortgagee or affect the status of the foreclosure proceedings.  Lastly, the bill states that the 90-day period shall not operate as a stay of the proceeding.  The IAR is NEUTRAL.