HAFA Short Sales Information
- Program is Currently Scheduled to End 12/31/2012
The HAFA short sale program is a Federal program set up by the U.S. Treasury department that stands for Home Affordable Foreclosure Alternative which provides federal guidelines to lenders participating in the program to help homeowners for pursuing alternatives to a foreclosure through the process of a short sale or deed in lieu of foreclosure. Most Lenders STRONGLY encourage that a short sale is attempted before the Deed-in-Lieu of Foreclosure. Due to credit reporting and the effects that a Deed-in-Lieu of Foreclosure or a Foreclosure has on a homeowners credit and future ability to purchase a home, I STRONGLY encourage homeowners in difficult situations to attempt a short sale over just trying nothing, walking away and letting the home go to foreclosure.
Times may be tough right now but I've found from previous client's experiences that once they get rid of their biggest debts such as a large mortgage, things seem to fall back in place and they get back on their feet. Stress will bring down all aspects of your life, affect work, attitude towards looking for work and being their best in job interviews, relationships and life in general. From my experience with several clients that I've helped short sell their home, once they got rid of the Albatross hanging around their neck their outlook on pretty much everything seems to improve.
If your loan is owned by Fannie Mae or Freddie Mac... they have their own Short Sale Programs effective 08/01/2010. Click on one of the following for more information on their programs. If you do not know if Fannie Mae or Freddie Mac own your loan, call me or fill out the contact information below and I can look for you.
- Freddie Mac HAFA Short Sale Program
- Fannie Mae HAFA Short Sale Program
Unlike a traditional short sale program loaded with confusion and uncertainty that should only be handled by experienced short sales agents, a HAFA approved short sale gives homeowners, buyers and their real estate agents a higher degree of certainty in what a Lender will accept in a final sales price, the terms available and a time period to complete a successful sale. In addtion, homeowners that do qualify are eligible for up to $3,000 for relocation expenses after a successful close of escrow.
In addition, lenders must WAIVE their future rights to pursue a deficiency judgment in a HAFA short sale. This alone is huge in the state of Nevada since lenders have up to six years to pursue a deficiency judgment for loans originated before September 1st, 2009. In a Traditional Short Sale, we have to negotiate for them to put this waiver in writing and often times, they will require a cash contribution or signing a Promissory Note if we can even get them to agree to this in the first place. Under the HAFA program, lenders CAN NOT require a Cash Contibution or signing a Promissory Note in order to complete a HAFA short sale.
Of course... as with any Federal Program there are guidelines for a Las Vegas home owner to qualify for the HAFA Short Sale program. Before continuing any further, here are the basic guidelines that I've attempted to put in plain English as much as possible to see if you qualify for a HAFA short sale in the first place.
HAFA Short Sale Basic Guidelines for Qualification
If all of the following conditions are met, the homeowner qualifies under the basic guidelines for the HAFA Program:
- Must Be a Primary Home. Second Homes, Vacation Homes and Investment Properties do not qualify. The property can be vacant up to 90 days prior to the date of the Short Sale Agreement (SSA), Alternative Request for Approval of Short Sale (Alternative (RASS) or Deed in lieu Agreement if the borrower provides documentation that the borrower was required to relocate at least 100 miles from the property to accept new employment or was transferred by the current employer and there is no evidence indicating that the borrower has purchased a one- to four-unit property 90 days prior to the date of the SSA, Alternative RASS or DIL Agreement
- The First Loan must have been originated on or before January 1st, 2009.
- Maximum balance on the loans can be no higher then $729,750.
- Borrowers Total Monthly Payment must exceed 31% of their gross income.
- Have a Verifiable Hardship. (Unemployment, Divorce, Loss of Income, Job Relocation, Illness in the Family and many others are excellent hardship qualifications.) Some real estate agents are stating that owing more then your home is worth is now a hardship. I don't buy into that theory but I do buy into the basic question of whether somebody would qualify for that old loan today. More often then not... it's a no since previous lending standards were extremely lax.
If all of the following conditions above exist for you and you do not want to keep your home, fill out the contact form below and I will provide you with paperwork that needs to be filled out and turn it into your lender for review.
HAMP Eligible Borrowers - Servicers MUST consider Homeowners for the HAFA program within 30 Days IF ONE of the following occurs:
- Does not Qualify for a Trial Period Plan under HAMP. (Loan Modification Program) or;
- Does not successfully complete a HAMP trial period plan. or;
- Is delinquent on a HAMP modification. (Misses at least two consecutive payments.) or;
- The Home Owner REQUESTS a Short Sale or Deed-in-lieu of Foreclosure.
Borrower and Lender (Loan Servicer) Basic Requirements for a HAFA Short Sale
- Requires that the property be listed with a licensed real estate professional who is regularly doing business in the city where the property is located.
- The borrower must sign and return the Short Sale Agreement within 14 calendar days from its Effective Date along with a copy of the real estate broker listing agreement and information regarding any subordinate liens.
More Requirements during the HAFA Short Sale Process
Fill out the following information and I'll help in determining if you qualify for the HAFA short sale program.
(Fields marked with * are required.)