For distressed sellers who don’t qualify for loan modification and risk losing their home, REALTOR® Amanda Cowan has good news: the Treasury Department has initiated a program to promote alternatives to foreclosure.
“The Home Affordable Foreclosure Alternatives Program or HAFA is designed to streamline short sales by providing a uniform process and standard forms across lending institutions. More importantly, it provides incentives for borrowers and banks to complete the sale. It pays $3,000 to owners who sell their homes under HAFA to help cover moving expenses and releases them from future liability. During the interim, the foreclosure sale is stopped.
While it’s supposed to streamline the process and reduce response time, there are still some kinks to be ironed out. Ideally, the seller receives pre-approved terms before listing the property which takes the guess work out of how much the bank will take. As a result, the process moves faster so the short sale closes sooner. However, I’ve been working on a short sale for six months and I’m still waiting on the approval. If I waited for them to set list price, I’d still be sitting here.
But the question must be asked. What’s more important, the journey or destination? For a distressed seller, the end result is what matters most. Borrowers are fully released from future liability for the first mortgage as well as junior lien holders accepting HAFA incentives…”
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by Amanda Cowan, Realtor.com
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