Fannie Mae HAFA Program

The Fannie Mae HAFA (Making Home Affordable Foreclosure Alternatives) program goes into effect August 1, 2010.  This is big!!  This covers a lot of mortgages.  Borrowers must first try a modification before they can be considered for the HAFA program..

Highlights:
Homeowners get $3k assistance to move
Servicer's get $2k for short sales and $1k for deeds in lieu of foreclosure

There is also a lease for deed program for homeowners that want to stay in their home.  They may be able to rent it for 12 months at fair market value.

Cash for Keys!

Banks are now offering many distressed homeowners incentive to keep the house up until it short sells or forecloses.... that's right.. up to $2500 may be paid to homeowners for maintaining their home and cooperating with the bank, which includes leaving the appliances.  It is always in the best interest of the homeowner/seller to stay in their home as long as possible, in fact they should try and stay until it is settled.  The owner/borrower is not making payments and this gives the owner a chance to accrue some cash for moving expenses and for essential needs. 

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

How to Sell Your House Using a Short Sale

Today selling your home using a short sale has become common practice.  Why do a short sale?  If you owe more than your house is worth and more than you can net after paying real estate commissions to pay it off then you need a short sale.  Today the bitter reality is that you probably are going to have to sell your house for a lot less than you were thinking.  It is a buyers market and the buyers are picky and are shopping for the very best deals.... It doesn't matter what your home appraised for last year or what the tax card says... price is dictated by supply and demand...

If you are facing a potential foreclosure or know you can not afford to keep your house then a short sale may be the best solution for you.  In most cases a short sale will be better for you than just walking away and letting the bank foreclose.  Foreclosure can result in tax consequences and you will have a foreclosure on your credit.  While a short sale won't leave you totally unscathed most experts agree it is better than the alternative.  In some cases bankruptcy may be the best option for you BUT it wont really save your home but may by you some more time.  If you are in a difficult situation and trying to figure out what to do then call me or email me and I will be glad to help you understand the short sale process.  It is always a good idea to speak to your tax accountant and attorney to understand the implications of your actions before you do anything that you may later regret,

Good news for short sale sellers ... The federal government has rolled out new guidelines that many of the biggest lenders have signed on to implement.  They go into effect April 5th.  The guidelines essentially are going to make it simpler and more straight forward to the seller and to the potential buyer. For sellers the banks acceptance of the short sale will mean that the bank forgives you for the deficiency and agrees not to take any further collection action.  The lenders will give Buyers an answer in 10 days which means more people will consider a short sale when shopping for a home because they wont be waiting 3,4,5,6 months to find out if their offer is accepted. This has been a real frustration for buyers and also the sellers.

Please call me at 912-289-4990 or email me your questions at Soldin72hours@gmail.com

Should I buy a short sale?

 Short sales are a wonderful way to find a deal if you know how to use make offers. If you don't know how to make offers the right way you will find short sales an exercise in frustration. First you need to understand that most short sales don't work out. I would venture to say that aproximately 20% are successful.... Buyers that do it correctly can and do land some great deals....

First off you need to understand that commons sense does not apply when dealing with big banks and making offers... The banks have an illogical (putting it nicely) thought process for approving short sales... After seven years of doing short sales I have come to have somewhat of an understanidng of their process.. However much of the process is obscured from the consumers perspective thus making it harder to determine the actual criteria they are using to make an approval situation.

If you decide to make an offer on a property using a short sale here are a few tips:

1. Have a long time line to close 90-180 days.

2. Don't expect the bank to give the property away. They are going to sell it for as close to fair market value as they can get. They are going to get an appraisal and base acceptance on this value and usually look for 80-85% of this value net to them.

3. You need find out if there are any judgements, liens, etc... on the property or you could waste a bunch of time to only find out there is a judgement against property that makes it unfeasible.

4. Is the seller in Bankruptcy or planning to file soon..?? This can make or break a deal. It is possible to buy a property in bankruptcy but makes it much harder.

5. Get an agent that is very experienced in the short sale business so that your offer is properly constructed and can help navigate through the tricky process.

http://www.avalonpropertiesgroup.com