The Federal Treasury Department has updated the HAFA Short Sale program again-and these new guidelines are designed to get relief much quicker to many more homeowners. This government funded and subsidized short sale program is part of the Making Home Affordable stimulus plan, but has seen little success due to implementation problems by participating lenders.
Although 95% of all lenders have signed up to participate and abide by the HAFA short sale program guidelines, the reality has been that long delays and mass confusion have stalled the closing of sales. The low completion numbers prompted the Fed to make some important changes to the plan. These new guidelines are effective June 1, 2012:
- Program extended through 2013
- HAFA now available for investor properties-previously just owner occupied homes
- 30 day review for eligibility
- $8500 to second liens-previously capped at $6000
- Can be current on mortgage and still qualify for HAFA
- 31% payment criteria eliminated
- Standard credit report rating-less impact on credit, can buy another home sooner
These HAFA short sale program updates are expected to jump start the cleaning out of old inventory for lenders, and help the market recover much more quickly. Lenders are finally staffed and trained, and these new guidelines will eliminate a lot of the road blocks that prevented closings in the past.
Homeowners are provided other benefits under the HAFA short sale program, including:
- Protection from deficiency balance-no future liability for the debt
- No cash contribution or promissory note allowed from the seller
- $3000 moving allowance paid to seller at close of escrow
One in four homes is currently "underwater" and when paying that monthly mortgage becomes a financial hardship, trying to hold onto your home may be more damaging than worthwhile. Getting a fresh start, and being able to buy another home sooner, and at a great price, may be the best decision for a smart financial future.
Susan Gregory is a Realtor, HAFA Certified, Short Sale Foreclosure Resource Agent, CDPE Agent, Certified Negotiation Expert. She has helped hundreds of homeowners facing financial difficulties find the best solution and get a fresh start. She is also the author of the best selling resource, The Complete Loan Modification Guide Kit and Loan Mod Calculator. Visit SusanGregoryRealtor.com for more information.