Speeding Up the Lender's Responses
August 30, 2010
California legislators recently passed Senate Bill 306 which creates some new rules for lender and escrow procedures.
The new law adds a short payoff amount request into the existing payoff demand law. Generally a lender must respond to a payoff demand within 21 days from when it is request by escrow.
After a short sale has been approved by the lender, the lender is required to respond to a short pay demand statement within the 21 day period. This lender response can be a short-pay demand statement or w written statement electing not to proceed with the proposed transaction.
The review and approval of a short sale request does not fall within this 21 day requirement.
Another provision of SB 306 deals with the time a lender has to approve a closing statement. Typically a lender may approve a short sale subject to the lender's approval of a closing statement prepared by escrow. Lenders have not always conducted this review promptly.. Under SB 306, if a lender fails to approve a closing statement within 4 days, the closing statement will be deemed approved, but only if is not clearly contrary to the terms of the short pay agreement or the short-pay demand statement provided to the escrow holder.
The law also includes some technical changes to existing real estate related laws.
The full text of SB 306 is available at: http://www.leginfo.ca.gov/
California legislators recently passed Senate Bill 306 which creates some new rules for lender and escrow procedures.
The new law adds a short payoff amount request into the existing payoff demand law. Generally a lender must respond to a payoff demand within 21 days from when it is request by escrow.
After a short sale has been approved by the lender, the lender is required to respond to a short pay demand statement within the 21 day period. This lender response can be a short-pay demand statement or w written statement electing not to proceed with the proposed transaction.
The review and approval of a short sale request does not fall within this 21 day requirement.
Another provision of SB 306 deals with the time a lender has to approve a closing statement. Typically a lender may approve a short sale subject to the lender's approval of a closing statement prepared by escrow. Lenders have not always conducted this review promptly.. Under SB 306, if a lender fails to approve a closing statement within 4 days, the closing statement will be deemed approved, but only if is not clearly contrary to the terms of the short pay agreement or the short-pay demand statement provided to the escrow holder.
The law also includes some technical changes to existing real estate related laws.
The full text of SB 306 is available at: http://www.leginfo.ca.gov/
posted by shirley harry at 8:07 AM
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