HAFA Foreclosure Alternative...Maybe? Maybe Not
I recently attended NAR and REBAC's SFR Designation Course to learn more about Short Sales and Foreclosures which was what they advertised in their flier for the course through a local Association of REALTORS. While the instructor was very well versed at reading the Power Point and discussing the materials I must say if I was a new agent I would not have a clue as to how these segments of our business actually worked. Nothing wrong with attending this course as an elective and getting another Certification for your Resume just remember it will not get you any REO business you will need to find the movers and shakers to do that elsewhere.
Today the new HAFA streamline short sale program goes into effect. Please be sure you go on line and print out, read, and re-read the 43 pages of guidelines before you attempt to explain this to your clients. If there is more than one lender involved your chances of making one work are slim. How many 2nd TD Holders do you know that will take between $1500 and $3000 in CA for their $50,000 to $150,000 note? Not only do they take a beating they must also sign a disclaimer not to pursue the borrower for any deficiency. Most of these loans are NOT purchase money loans and they do have recourse. Many lenders have sought out attorneys to sue the prior owner or worse will simply lay back and wait a few years (they have 4 years under the current statue of limitations) to then turn the file over to a collection agency. This could get very ugly.
Will HAFA stop Foreclosures? In some cases yes, but in most cases no. While you may be reading that forecolsures are down and market value is increasing you need to look deeper. Some areas are increasing in value simply do to the fact that after a 60% decrease it can only go up from the bottom but does that equate to a 10% overall increase in market value, not in the real world.
Make sure you do your homework. Go into your local MLS and look at the numbers. Go back 120 days and pull out all the Short Sales and then research how many actually sold. Then look at how many become REO's and are were listed and/or sold. Last look at how many fell off the radar. Oh yeah there is that pesky shadow inventory we are all told does not exist.
REO 101-102 and Short Sale courses are again avialable through Southern California Chapter of CRS for reasonable fee, offer Certificates, but better yet actually show you how to work these practices into your day to day RE Business. Look them up at www.southerncaliforniacrs.comand www.silverlingingworkshops.com for details and locations.
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