Archive for November, 2010

Sellers Of Short Sales- What is HAFA?

November 16, 2010

In 2009, the US government introduced Making Home Affordable in the attempt to alleviate foreclosures and have people retain their homes. First: there were (two) programs: (1) Home Affordable Refinance Program (HARP) and (2) Home Affordable Modification Program (HAMP). Neither of these were designed for short sale transactions.

Thru 2009, number of foreclosures and short sales continued to increase across the US, but no uniformity or standards of short sale procedures among lenders. The urging of (NAR)   http://www.realtor.org/   the U.S. Treasury announced Home Affordable Foreclosure Alternatives Program (HAFA) in May 2009 and released guidelines and forms in Nov. 2009.

HAFA took effect in April 2010 and includes loans serviced by loan servicing companies. It only included (GSE) loans. Which means did not include loans held or guaranteed by FNMA or Freddie Mac. On June 1, 2010 they announced participation in HAFA.

Under HAFA, short sales can be pre-approved on the first mortgage only, standardized docs, time lines set for approval, marketing, acceptance and closing. Sellers receive ($3,000) in relocation expenses at close of escrow if the short sale is in compliance with HAFA. There are three (3) HAFA programs- US Treasury, Fannie Mae, Freddie Mac.                                      HAFA Advantages for SELLERS ARE:     

*Sellers receive $3,000 relocation assistance.                                                                                                                                                                                                            *Foreclosure sale must be suspended while eligibility is determined, property marketed, or pending closing.      *Sellers are released of all liability on 1st and subordinate liens.   *Sellers cannot be required to sign note or pay amounts to satisfy liens.  *Short sale is (pre-approved). This takes more time on front end of transaction, but less time after a purchase contract is accepted from seller. *Purchase agreements are approved or denied within 10 business days. *If short sale is not successful, a deed-in-lieu of foreclosure may be possible with seller receiving $3,000 relocation assistance or being able to lease home back at below market rent (FNMA loans only)

So if you are questioning your attorney, Realtor, CPA or anyone about this option, make sure you work with a qualified Distressed Property Expert (CDPE) and a Pre-Foreclosure Specialist (SFR) before signing anything to list your house and complete a short sale.

Don’t sell yourself Short! Call an Expert Professional in this Field!    Mark Barone, CDPE,SFR,ABR,CRS,GRI  has successfully sold short sales and helped sellers with cash for relocation assistance.   Keller Williams Real Estate- 610-565-1995, ext. 1310,

email: mbarone@kw.com                      Direct 484-468-1310,  610-537-1166