Short Sale Update

As many of you have heard there is a government program that has taken effect on April 5th, 2010 called HAFA (Home Affordable Foreclosure Alternatives) that is suppose to help expedite the short sale process by offering incentives to servicers and investors on loans, as well as borrowers, in the hopes that is cooperative effort with shorten the recovery time of the housing market. Here is a quick overview below as to what the program entails and how to qualify. Keep in mind that you have likely heard ads on the radio or seen them on tv or in magazines, making it seems like this process is a breeze. Don't be fooled! It is potentially easier than it has been but there are still a lot of hoops to jump through to qualify!

Make sure that you discuss your specific issues with a individual that has done short sales over 2 years. You may have questions or know someone that wants to know their options please have them call me because time is of the essence especially if they are late on their mortgage payment.

HAFA Overview
- takes place 4/5/10
- helps by pre-approving short sales and releasing borrowers from future liability of the debt
- pertains only to first mortgages!
- must go through HAMP (Making Home Affordable) program first
- financial incentives provided to servicers, investors, and homeowners who qualify
- uses standardized processes, documents, and timeframes (however there are no concequences to servicers that don't comply)
- investors must waive right to seek deficiency judgements

HAFA Requirements (for eligibility)
- must be borrower's principle residence
- loan must be a 1st mortgage
- loan must be originated before January 1st, 2009
- mortgage is delinquent or default is imminent
- current unpaid principle balance is equal to or less than $729,750
- borrower's total monthly mortgage payment exceeds 31% of borrower's gross income

Incentives (subject to change)
- borrowers qualify for $3,000 in relocation assistance
- servicers qualify for $1,500 for administration and processing fees (may be increased due to recent changes)
- investors qualify for $2,000 for subordinate lien holder payoff (may be increased due to recent changes)