Search IDX Listings by using an Advanced Interactive Map.
by Jace Stolfo
on Tuesday, May 11th, 2010 at 3:33pm.
Traditionally, for a lender to consider a short sale, the seller has had to first secure an offer before finding out what the lien holder(s) would approve for a sales price. This way of handling short sales has been extremely inefficient as buyer & sellers have often had to wait 2-6 months for an approval causing many transactions to fail.
In an effort to address this problem the government has launched the Home Affordable Foreclosure Alternatives Program (HAFA). This program is designed to allow eligible homeowners (the borrower) to work with their lender (the servicer) to determine the required net proceeds prior to putting their house on the market. It will take some time to see if this program is successfully implemented but if it is it could have a very positive effect on the market.
Background In February 2009, the government launched the Home Affordable Modification Program (HAMP) designed to help borrowers stay in their homes by modifying their existing mortgages. Over 1 million homeowners have gotten help from this program (1) but there's still been a large gap of people it has not able to assist.
HAFA, which took effect April 5, 2010, was designed to compliment HAMP by providing an alternative for the borrower who are HAMP eligible but still unable to keep their home. The two primary foreclosure alternative methods under HAFA is a short sale or deed-in-lieu of foreclosure. HAFA offers financial incentives to the cooperating servicers as well as up to $3000 for borrower relocation assistance. Not all lenders are not required to participate in these programs but many do. You can search for a list of participating servicers here.
Basic borrower eligibly requirements
Find out if you could be eligible.
Summary of HAFA short sale time-line
Please keep in mind HAFA is complex program with 45 pages of guidelines & forms. The following is a generalization of the process.
Please visit www.makinghomeaffordable.com for more information.
This information is subject to change without notification. No representation or warranty of any kind is made.
(1): www.makinghomeaffordable.gov/hafa.html (as of 5/11/10)