Short Sales- HAFA explained- this is the third part in our series on analyzing the HAFA guidelines.
Today I started getting links and calls from Real estate agents around the county and even two agents from Miami. They all were saying, this is great. Did you read the Sunsentinal today? They say that short sales are only going to take ten days now! Yeah! Right! What planet did they just fall off of to believe that is even remotely possible. Oh, but this is what the government is forcing the banks to do. Yeah! Right! Again! NOT!
This ten day approval time is being taken out of context. I am sure that many in the media are quoting this statement without preface to get readership and get folks excited and then read their paper more. I left a comment- Did you read the 43 pages of the HAFA guidelines?
Why are you giving false hope to homeowners who are in a short sale situation or will need to go into the short sale situation soon?
Please read the series I am writing in regards to HAFA.
Here is the first post: The Truth about HAFA Part I
Here is the second post: Defining HAFA Part II
Know Your Facts About HAFA Before You Blog it.
In this post I want to clear up the rumor that lenders are going to have to approve short sales within ten days. This needs to have a qualifying statement.
The ten day time frame is AFTER a lot of other things have transpired up to that point.
On page 8 of the HAFA Guidelines it states:
'Approval or Disapproval of Sale- Within ten business days of receipt of the RASS and all the required attachments, the servicer must indicate its approval or disapproval of the proposed sale by signing the appropriate section of the RASS and mailing it to the borrower."
So this does not mean that from the time of the offer to the time of the acceptance or rejection has to be ten days. It means from the point in time that everything is done on the file, the package is in, the BPO is done, the borrower is qualified for the HAFA program, the offer is turned in and the HUD meets the net the servicer is looking for.
That is obviously not a ten day closing or a ten day short sale. Let's just use some common sense. If you ever have done a short sale with Bank of America you know that most of the time it takes months to do a short sale. There is no way they can implement a system in which you go from start to finish in ten days. Remember, the investor still has to approve most files. Just ordering, receiving and analyzing a rush BPO takes a week.
When something sounds too good to be true, it probably is.
The next part of the problem is that these guidelines are for non GSEs. Freddie mac and Fannie mae are not going to use these guidelines. They are special (or so they think they are) and will come up with their own guidelines. The problem with that is 8 out of every ten short sales we do- are GSE mortgage backed securities. Those short sales don't qualify for the HAFA program. That is over 60% of all the mortgages in this country.
In order to be considered for the HAFA program:
- The home must be the principle residence of the homeowner.
- The first mortgage must have taken out on or before January 1, 2009.
- The mortgage is delinquent of will be in the foreseeable future- showing impending delinquency.
- The unpaid balance owed on the first mortgage can not be more than $729,750.
- The monthly mortgage payment has to be more than 31 percent of the homeowner's gross income.
While it remains to be seen if these new HAFA guidelines will create any shortening of the time that it takes to get short sales from contract to closing it is more important for agents to understand the short sale process itself.
Also, if you do not qualify for this HAFA program- you may still be able to do a short sale. We will just go through different channels.
Agents need to get educated in short sales if they are to do them. This is a great niche for those agents who have tough skin and are patient and understanding. If you are good with your communication skills and shine with your negotiation skills; then short sales may just become your best niche ever.
To view Florida Short Sales- Click here. We know Palm Beach County Short Sales and Port St Lucie Florida Short Sales and will help you get your home Sold if you need to Sell your home and help you buy your home in Palm Beach County Florida: Call us today.
Copyright © 2010 By Katerina Gasset, All Rights Reserved.*Short Sales- HAFA Guidelines and The TEN Day Dream Short Sale*
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