New HAFA Rules Can Make A Short Sale A Short Sale
There is the usual red tape that one has to wade through but all in all this looks like a definite improvement over the short sale policies previously. This video provided by the NAR lays out the guidelines clearly and in plain speak. If you are a real estate agent, home owner, or a buyer, short sales are looking promising for all parties concerned.
This video compliments of The National Association of Realtors
FAHA appears to be a real move forward for real estate. I was pleased to see the video and felt that it was a positive message.
HAFA has been a big bummer, but we expected alot of this. Hopefully the new guidelines will help some. As one of the new HAFA program guidelines that went into effect Feb. 1st, 2011, the 31% debt to income ratio does NOT need to be proven by the borrower. In other words, it is like a "stated income short sale" to some degree! Pretty good news for the program. We have a great discussion and info group for the HAFA short sale program, and we are releasing an updated HAFA guide next week as well - www.theshortsaleguide.com/group/hafaprogram
I'm interested in getting dependable clarification regarding the new HAFA guidelines due to go into effect June 1, 2012. If I've read them right, it opens many doors to new commissions and to helping under-water, distressed home owners start fresh.
Like before, some form of hardship must be established, but if the borrower can continue making mortgage payments until the short sale is completed, there will be little or no negative impact on his/her credit score – a BIG change!
Question; is a negative cash flow a hardship? If one lists all the borrower’s basic expenses, including the mortgage payment and RE taxes, and that total exceeds (by a reasonable amount) their total take-home pay, is that a hardship that will qualify them for a HAFA short sale? I presume it would be more certain if the shortfall was caused by a recent happening, e.g., ongoing, new medical bills, reduced work hours ordered by their employer, etc. The usual causes would obviously still apply.
All of this seems to add a new dimension to our profession; in fact it renders us more professional. Now we can not only earn new, increased commissions, but we can help several of the 20 million under-water home owners get a fresh start with a short sale that includes forgiveness of any deficiency, no taxes on the forgiven amount (gift) and a $3,000 moving allowance. And we have an extra year to do this, until December 31, 2013.
Oh, I just remembered, since the new program, properly administered, will have little or no negative impact on the borrower's credit score/rating, we can help them buy a more affordable home very soon – help them gain a fresh start (the extra commission is nice, but often secondary).
In closing I'd like to quote one of my late father's favorite sayings, "If it sounds too good to be true, it probably is." My early review of this new HAFA program makes me wonder if I'm missing something because, as I reread my above interpretation, it's a little hard to believe that we Realtors are facing such an opportunity to ‘give and to get.’
Will someone please point out to me what I'm missing, or improperly interpreting?
Of course I’m hoping on top of hope that my understanding of this new iteration of HAFA is close to being correct. If so, I’m committing to two goals; 1) tell the above story to two new persons each day and, 2) cancel all vacations until I've gotten $1 million forgiven for distressed homeowners in my market area. Will you join me?
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