REALTORS and loan officers around the country received notices last week that the Federal Government had taken pro-active steps under the “Home Affordable Foreclosures Alternatives”, HAFA, program to help homeowners struggling to sell their homes in a short sale. Short sales are sales in which the lender accepts a sale price of the property for less than the full amount of the loan balance that is owed on the property.
Since market conditions turned down a couple of years ago the process has been complex, lengthy and has mostly ended in failure costing homeowner’s their credit and lenders tens of thousands of dollars on each property that was foreclosed on that should have been handled as a short sale instead.
The new rules that have just been put in place have some very clear eligibility requirements:
• Property must be borrower’s principal residence
• Mortgage must have been originated before January 1, 2009
• Mortgage is owned or guaranteed by Fannie Mae or Freddie Mac
• Homeowner is delinquent or default/delinquency is foreseeable
• Homeowner has experienced genuine hardship i.e. loss or decrease of income
• Borrower’s total payment exceeds 31% of household income
• Unpaid home mortgage balance is less than $729,750
R. H. Thackston & Company REALTORS have become proficient at helping homeowners’ resolve short sales and are one of the few REALTOR companies in our area to have the ability to initiate short sales directly for our client on line. Currently we have direct access to Bank of America and former Countrywide Home Loans and are working on adding other lenders as well. Under the new rules lenders must now respond to short sales within ten days or offer an alternative. The new rules also require that lenders release borrowers from the obligation to repay the difference between the sales price and the loan amount; no deficiency judgments are allowed for a second loan.
If you or anyone you know is thinking of buying or selling a home or needs help with a short sale under the new rules now or in the future call the REALTORS at R.H. Thackston & Company!