New Federal guidelines may help to streamline the short sale process. ---
The new rules, under the Home Affordability Alternatives (HAFA) program, are to remain in effect from April 5, 2010 until the end of 2012.
Basically, if a homeowner has tried unsuccessfully to negotiate a loan modification, then the lender must offer a short sale to the borrower within 30 days under the following requirements:
The owner of their principle residence can demonstrate a hardship and is or will be in default. Additionally the unpaid principal is not in excess of $729,750 on a loan originated before the beginning of 2009. The mortgage is owned or guaranteed by Fannie Mae or Freddie Mac and the borrower's monthly housing payments are in excess of 31 percent of gross income.
Other requirements apply, but one important feature is that no deficiency judgment is allowed on a first or second loan. A second is allowed to receive $3,000 and $1,500 is provided to cover moving expenses for the homeowner.
My advice to the Washington State homeowner facing the possibility of foreclosure is to contact the Washington State Bar Association Home Foreclosure Legal Aid Project, they recently received funding through a settlement with Countrywide to provide assistance and counseling for homeowners facing foreclosure.
Please visit this previous blog post: Help for Washington State Homeowners Facing Foreclosure --- Washington State Bar Legal Aid Project --- New Funding
This post has more information on the counseling process and its importance.
Or click on this picture of the web site for the Washington State Bar Legal Aid Project.
Outside of Washington State, please contact your State Bar for guidance.
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