Since April 5, 2010, changes in the way short sales are processed have been enacted to the new HAFA requirements.
Strict time frames are required in order for the bank to approve the short sale. Homeowners are required to work with a real estate agent that understands the short sale process.
One of the changes which is especially posivitive is: the new payoff schedule allows the servicer to increase the maximum payoff to the second lien holder to 6% (from 2%) of the outstanding loan balance. Since many servicers only allowed a $3000 maximum payoff in the past, this change could make the short sale approval much more attractive to the second lien holder, thus actually causing the short sale to ultimately be approved and the escrow closed.
In Santa Clarita, CA we have seen numerous short sales which never received approval because the second trust deed holder wanted more than a $3000 payoff. We have seen frustrated distressed homeowners who were unable to pay any money themselves toward the payoff due to their hardship situation. And we have seen frustrated first time buyers that did not have the extra funds to pay toward the payoff, either.
It's a shame that so many possible short sales went by the wayside when market value offers from bonafide qualified buyers had been presented.
This new HAFA (Home Affordable Foreclosure Alternative Program) change is a step in the right direction.
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