Short Sales...the new HAFA guidelines

By
Real Estate Agent with The Brown Group Realty

As part of the Making Homes Affordable program (HAMP), the new Home Affordable Foreclosure Alternatives Program (HAFA) goes into effect April 5th.  The National Association of Realtors has the summary of this at www.realtor.org/shortsalesUnder the new program, if a borrower meets the eligibility requirements, they would not have to face a deficiency judgment and would get some cash to move. 

Will it work?  I'm hoping so, but have my reservations.  HAMP was a noble proposal for those who wanted to keep their homes, but, due to unforeseen circumstances, were struggling to make their mortgage payments.  But if you've talked with anyone who has tried to get a loan modification, it is a frustrating and often painful process.  One person I know has re-submitted their application and supporting documents three times.  The typical loan modification process can take up to six months before an answer is forthcoming.  The idea was to offer relief BEFORE a borrower was in default, but that is a rare occurrence.  The program was left in the hands of the lenders to execute and the lenders were and still are ill-equipped to handle it. 

Now the government is asking these same lenders to have their loss mitigation departments learn something new called HAFA to deal with short sales...something that, for the most part, the lenders are not dealing with well now.  Although it goes in effect in two days, my sense is that it will take a while to even be known by the loss mitigation departments, let alone executed.

With short sales, each situation is different.  A FHA short sale differs from a Fannie Mae short sale which differs from a short sale with a first and second lienholder.  They are complicated, time consuming, frustrating and, at times, heartbreaking.  HAFA is a ray of sunshine for those wanting to avoid foreclosure but must sell their home. I'm hoping it will help make short sales take less time to conclude.

If you are considering a short sale, it is in your best interest to work with someone who knows what they are doing.  NAR has a new designation: SFR which stands for Short Sale and Foreclosure Resource.  The Realtors who have this designation have been trained to do short sales and to give advice regarding alternatives to foreclosure.  There is also another designation:  CDPE which stands for Certified Distressed Property Expert.

 

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the eye to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Topic:
ActiveRain Community
Location:
Rhode Island Washington County
Tags:
short sales

Comments 3 New Comment

Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the flag to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Rainmaker
228,906
Vic Steele
Broker/Consultant
Valet Real Estate Services

All we can do is hope for the best Wendy.  Their intentions are clearly forward-thinking, I hope the administration of the new guidelines is equally smart!

April 03, 2010 02:24 PM
Ambassador
419,481
Larry Lawfer
"It's all about you. I listen for a living."
YourStories Realty

No doubt both the banks and the government has bungled these issues up to now. The newest guidelines may help, we can only hope. It all started wrong when the Government and the Banks demonized the entire real estate industry about some modification scams. The banks have been slow moving to non responsive throughout.  Now the idea is to provide some people in trouble a way to get out, some cash in their pocket and a not so black mark on their credit score.  My thinking is that Short Sales are the newest best thing for us to be involved with.

April 03, 2010 02:24 PM
Rainer
12,439
Wendy Brown
The Brown Group Realty

Vic-I'm ever optimistic (or I couldn't be in real estate this long!) tempered with a good memory.

Larry - Couldn't agree with you more.  2/3 of my business is short sales since getting the SFR designation.  HAFA provides the opportunity to get it right...we can only hope it works!

April 03, 2010 02:57 PM
Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the lamp to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Rainer
12,439

Wendy Brown

Ask me a question
*
*
*
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the balloons to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase: