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Change is in the Wind for Short Sales - HAFA Coming April 5th

By Noelle Blazevich

Real Estate Agent with John L. Scott

March 29, 2010 04:33 PM

New Short Sale Guidelines and Process for Qualifying Homeowners:

Coming up April 5th the short sale process will change for some homeowners who qualify for the HAFA or Home Affordable Forclosure Alternatives Program

The goal of this progam is to make the process easier for homeowners and potential buyers. Homeowners who qualify for the HAFA program will be able to get preapproval from their bank prior to listing their house for sale as a short sale. Guidelines for bank response times after the purchase and sale documents are signed will also be changing in an effort to speed up the process. This is good news for both beleaguered sellers and apprehensive buyers.

HAFA Brochure

What this means for the qualifying homeowner is that essentially instead of waiting to get bank approval until you have an offer on the table you are able to apply for a short sale with your bank and get bank approval prior to listing your property. This should make your property a lot more appealing to buyers who are leery of the often lengthy short sale process.

What this means for the buyer? A potential end to taking a stab in the dark and writing an offer then sitting back with your fingers crossed for 90 days or more hoping the bank is going to accept your offer.

Personally I can't wait for this one to roll out.

Noelle Blazevich
John L. Scott - North Bend
425-985-2334
noelleblazevich@johnlscott.com

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Charles Stallions Real Estate Services

Charles Stallions Real Estate Services Inc - Gulf Breeze, FL

Buyers Agent 800-309-3414 Pace and Gulf Breeze,Fl.

Its a coming no doubt and change for the better I hope. Hopefully this will help the folks that need it most.

Mar 29, 2010 04:37 PM

Jon Zolsky, Daytona Beach, FL

Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL

Buy Daytona condos for heavenly good prices

Noelle,

So far all the programs were not ... overly impressive. $170K instead of 3-4 Mil people, and programs before were even more pathetic.

But it is interesting to see how this one unfolds.

David North

Coldwell Banker Bain - Duvall, WA

for a rewarding real estate experience

Having a little more structure, uniformity and reasonableness to the short sale process will help a lot.

Mar 29, 2010 04:39 PM

Katerina Gasset

The Gasset Group & Get It Done For Me Virtual Services - Provo, UT

Amplify Your Real Estate & Life Dreams!

Noelle- I have totally read the entire 43 pages of HAFA which are only guidelines. It will depend a lot on where you live and the market you work in whether this program will help any homeowners or how many. There are so many exceptions to the HAFA guidelines and I write extensively about them.

This is nothing more than a government press release.

Most of the mortgages in this country are owned by Fannie and Freddie. Right now they have bought close to 70% and by the years end it should be nearing the 90% mark. Freddie and Fannie are not part of the HAFA guidelines so if your note is owned by Freddie or Fannie you don't qualify for the HAFA program no matter if your servicer is a part of HAFA or not.

Here in Florida, most homeowers have seconds and thirds which will also create a problem with HAFA because second and thirds will have to split the pie of $3000. That is not going to happen.

Freddie gets to oversee and be the manager yet does not have to play by the same rules.

Who is left for HAFA; about 15% of all the short sales.

I'll take BOA's Equator system over HAFA any day of the week. Katerina

My worst fear is that real estate agents don't read nor understand HAFA and then go and tell all of their buyers and sellers that HAFA will save the day yet they don't even know what day that it. That is a huge disservice to the sellers and buyers- getting their hopes up for nothing. Katerina

Mar 29, 2010 04:41 PM

Gary Swanson

Century 21 Harris & Taylor - Grants Pass, OR

Noelle, It will be great if this program really works. Short sales are such a stressful thing to deal with the way they currently work.

Mar 29, 2010 05:13 PM

Noelle Blazevich

John L. Scott - North Bend, WA

Katerina,

Thanks for your valuable insights. I agree that it's unfortunate that there are so many exceptions to this program and that we will likely see a lot of confusion regarding the program, who qualifies and who doesn't. I do however think that it is a start in the right direction toward making the process more palatable to buyers and sellers. Hopefully more reform will follow.

The reform I truly hope for is the upfront decision making versus the back end after the purchase and sale has been written. The current process leaves both the buyer and seller hanging and subject to the time frame of an overworked bank asset manager and the "expertise" of the short sale negotiator.

While there are plenty of good honest real estate agents, short sale specialist and negotiator teams out there trying to help buyers and sellers close a deal, there are also some not so great ones. Lately in showing buyers properties I find that each short sale property has different addenda, different demands, a variety of extra fees or worse yet is listed by an agent that doesn't have a plan for getting the short sale approved.

It is unfortunate when buyers must not only evaluate the home and the price but also the external strings, conditions and fees attached in determining which home they would like to buy. In representing buyers I find myself constantly doing extensive research on the conditions and fees of each potential short sale as well as trying to determine the expertise of the listing agent and negotiator they have hired. What conversations have they already had with the bank, where are they in the process, how many lien holders are there? The list goes on.

Mar 29, 2010 05:16 PM

Sorry not bank asset manager, meant to say loss mitigator. Asset managers deal with the bank owned properties and that is another big old ball of wax that I am having fun dealing with right now.

Mar 29, 2010 05:19 PM

Patty Luther

RE/MAX Rock-n-Roll Realty - Lewiston, ID

Lewiston ID Real Estate, Idaho-Washington

I am so very tired of Short Sales... They are awful... I will take a Foreclosure over a short sale any day...

Mar 29, 2010 05:25 PM

Change is in the Wind for Short Sales - HAFA Coming April 5th

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