New Government HAFA Short Sale Guidelines For Sacramento Homeowners
Short Sale And Foreclosure Resource Designation from the National Association of Realtors
SACRAMENTO SHORT SALE SPECIALIST AND EXPERT SHORT SALE NEGOTIATOR FORTH HOYT EXPLAINS NEWEST GOVERNMENT HAFA PROGRAM:
Looking for Government Short Sales Guidelines? Government Policies on Short Sales? HAFA government program policies?
HAFA Government Guidelines: Click here for HAFA , HAMP, HARP, 2MP… Government Programs … Check Your Eligibility Now.
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Questions on your particular situation? Contact us Today At Forth Hoyt’s Sacramento Short Sale Center
HAFA Provisions and HAFA Government Guidelines:
Government Programs … Check Your Eligibility Now.
This is a huge deal:
Many Sacremento area homeowners have questions about HAFA; the newest government short sale program and how it will help Stop Sacramento Foreclosures. This newest Government Anti-foreclosure program has been in the news lately and many homeowners with Bank of America, US Bank, Citibank, Chase, Wachovia and many other servicers have been getting letters from their bank that explain the HAFA program and who qualifies for HAFA.
Here’s a summary for HAMP and HAFA:
Understand that THE HAFA PROGRAM, first of all, goes hand in hand with the HAMP program, so in order to be eligible for HAFA, a borrower must have either failed or turned down HAMP. That just means that in order to be HAFA eligible sthe borrower must either not be able or not want to stay in the home… pretty easy.
HAFA will help. It will definitely be a game changer and will force the short sale to evolve and become a much more mainstream solution for struggling homeowners, but it will not be overnight; we still have a lot of pain to go through I think…
I copied this overview of the HAMP Provisions from the National Association of Realtors Website.
- Complements HAMP by providing a viable alternative for borrowers (the current homeowners) who are HAMP eligible but nevertheless unable to keep their home.
- Uses borrower financial and hardship information already collected in connection with consideration of a loan modification.
- Allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).
- Requires borrowers to be fully released from future liability for the first mortgage debt (no cash contribution, promissory note, or deficiency judgment is allowed).
- Uses standard processes, documents, and time frames/deadlines.
- Provides the following financial incentives:
- $3,000 for HAFA borrower relocation assistance;
- $1,500 for servicers to cover administrative and processing costs;
- Up to $2,000 for investors (First Lien Holders) who allow a total of up to $6,000 in short sale proceeds to be distributed to subordinate lien holders, on a one-for-three matching basis.
- Requires all servicers participating in HAMP to implement HAFA in accordance with their own written policy, consistent with investor guidelines. The policy may include factors such as the severity of the potential loss, local markets, timing of pending foreclosure actions, and borrower motivation and cooperation.
Found this great article today from The Washington Post
As foreclosure prevention efforts struggle to make an impact, the Obama administration will launch a program Monday encouraging lenders to allow more distressed homeowners to sell their property for less than they owe on their mortgage.
Under the new program, which has been in the works for nearly a year, lenders are paid if they agree to a short sale, which involves selling a home for less than the balance on the mortgage. The lender must forgive the difference, allowing borrowers to walk away from the rest of the debt. This is potentially cheaper and faster for the lender than a foreclosure and keeps distressed properties from lingering on the market for a long period and bringing down values of neighboring homes.
“This program will provide an alternative to homeowners when a modification is not the best option,” said Treasury Department spokeswoman Meg Reilly.
But short sales have traditionally been a long, cumbersome process with lenders who are suspicious of lowball offers dragging out negotiations for months. In some cases, borrowers have second liens on the property and the holders of those liens can block a deal if they don’t like the terms.
John Downer is facing many of those issues. Within two weeks of putting his Orlando townhouse on the market as a short sale in late January, a bidder offered $35,000 for the three-bedroom home, which Downer had listed for $50,000. He paid $170,000 for it in 2005. “I am cautiously optimistic, but who knows how long it will take,” Downer said.
But more than two months later, Downer is still awaiting word on whether his lender will accept the offer. The bank has warned that the process could take six months to a year, he said. And another lender holding his $33,000 second lien has advised that he may still have to pay off that loan if that second bank is not satisfied with the deal’s terms. “That would be a deal breaker for us,” he said.
The administration has not provided a price tag for its new program or estimated how many people officials expect to help. But to encourage lenders to complete more of these deals, officials announced last week they would increase incentives lenders are offered. Firms can now collect $1,500 if they allow a short sale, up from the $1,000 the government initially planned to offer. A bank that holds a borrower’s second lien can receive up to $6,000 for releasing the homeowner from the debt. And to speed up the process, lenders must now agree to a price before the home is put on the market.
There are also more incentives under the program for homeowners, who can receive $3,000 — up from $1,500 before — to help cover relocation expenses. “The barriers to short sales include a healthy dose of psychological burden from the homeowner, and sometimes you need that little extra push to get the homeowners to a place where they are ready to let go of their home,” said Howard Glaser, a housing industry analyst.
Short sales already make up a growing part of the market, according to First American CoreLogic. They were 8 percent of home sales in January, compared with 5 percent in January 2009, according to the research firm. In the Washington region, they grew to about 15 percent of the market in January, compared with 10 percent in January 2009.
I do think it [the new program] will help on the margins, but the scale of the mortgage distress is so large, it overwhelms any public policy option,” said Sam Khater, a senior economist for First American CoreLogic. “They keep chipping away at it, but it’s a tough nut to crack.”
