Short Sales aren’t short are they?

The most frustrating thing about short sales is that they aren’t short  – everyone has heard the horror stories about how long and drawn out the process can be, and many buyers have long given up and walked away 6 or even 9 months after they started the process when there seems to be no progress. So is there hope? At the end of 2009 the US Treasury Department introduced the Home Affordable Foreclosure Alternatives (HAFA) which went into effect April 5^th, to standardize the short sale process with lenders and servicers who are participating in the HAMP program. Prior to this program, all parties were not playing by the same rules, which led to lengthy transactions and uncommon procedures.

Home Affordable Modification Program (HAMP). HAMP basically gives qualified distressed homeowners a chance to adjust their mortgage payment in hopes of preventing foreclosure. But what if a homeowner doesn’t qualify? HAFA may be able to help these people as well as those who still can’t pay HAMP’s modified payments. Qualified loans up to the amount of $729,750 can participate in the program; however FHA, VA or Freddie Mac and Fannie Mae guaranteed loans do not qualify.

HAFA options are available for homeowners who: 1. do not qualify for a trial mortgage modification under the Making Home Affordable Program; 2. do not successfully complete the trial period for their modification; 3. miss at least two consecutive payments during their modification period; or 4. request a short sale or deed-in-lieu of foreclosure.

If a homeowner is approved for a HAFA short sale, a pre-approved minimum net price is determined for the home and a Short Sale Agreement (SSA) is recorded. The SSA is in effect for at least 120 days and during this time no foreclosure may occur and the property must be actively listed and marketed by a licensed real estate professional.

HAFA is a complex program with nearly 50 pages of guidelines and forms. To help you better understand the process and to get started contact your real estate agent or HAFA/HAMP participating mortgage consultant.

This post was written by Jasmine

This entry was posted on Thursday, April 22nd, 2010 at 8:39 am and is filed under Sellers Tips. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.