New Federal Short Sale Guidelines "HAFA" as of April 5th, 2010

Finally relief for homeowners underwater on their mortgage... After years of frustration trying to do short sales with the big banks, finally they "may" get easier... 90% of  servicing lenders have signed on to participate in a new program which went into effect April 5th.  It is designed to speed up the process by getting all of the parties to play nice... meaning cooperate, so that sellers can get relief, buyers can get quick answers on their offers, and agents can get paid... this new federal program called HAFA for short, stands for Home Affordable Foreclosure Act!  2010 will be the year of short sales as more lenders will attempt to unload properties via a short sale instead of a foreclosure.  

Highlights:

• Pre-determined pricing for sellers.  Sellers must use a licensed real estate agent to market their property.
• Applies to primary residence only
• Not all mortgage loans will qualify for this program. Fannie and Freddie Mac loans not included, FHA not included.  These investors will be coming out with their own programs.
• Lenders to provide approval within 10 days
• Sellers will be compensated for participating and helping to avoid foreclosure and keep property up. As a result they may be paid up to $3,000 for moving and relocation.
• Agent commissions are now protected, which will hopefully encourage agents to list and sell short sales. It is very important to have an agent that is very knowledgeable and trained to handle short sales if you are going to sell or buy one. 

Buyers need to understand that the banks are not going to take ridiculously low offers if they can get more money foreclosing.   Just as they have always done the lender or investor will do an appraisal or brokers price opinion of the property to determine value.  Then they will look at the offer net closing costs and commissions and compare that to what they would make if they foreclosed and collected the private mortgage insurance (if there is a policy in place which is highly likely). 

Over the past few years I have helped owners avoid foreclosure by doing a short sale and have found buyers great deals but it has taken enormous patience....hopefully a new day has arrived and short sales will move along at least at about the same pace as an REO/foreclosure... This promises to be good for the housing market and all parties.... time will tell...

Please call me anytime at 912-289-4990 or email me if you have questions regarding a short sale.

Tom