| What is a Short Sale?REO/Foreclosure on a home can be very traumatic on a family, the community, the housing market, and the economy. However, the option for a short sale provides a way for homeowners who are in trouble to prevent foreclosure and many of its repercussions.
What is a Short Sale? A short sale is an agreement in where your mortgage lender agrees to accept a payoff on the loan for less than the balance of the home. Lenders may agree to a short sale because they receive more of the loan balance in comparison to the amount they would get from selling the property following a foreclosure. This process also help the community maintain its property values and helps the homeowner maintain a better level of credit compared to going into foreclosure. Most of the time, homeowners considering a doing a short sale must meet strict guidelines to qualify: you must be behind in your mortgage payments, provide evidence of economic hardship, and have little or no equity in the property. A short sale is not a normal real estate transaction. A typical real estate transaction involves the seller of the home and their real estate agent, the buyer of the home and their lender, and their real estate agent. During a short sale situation, all of those parties in addition to the seller’s loan servicer, a housing counselor, any junior lien holders, mortgage investors, and insurers may be involved too. Because there are so many parties involved in a short sale, the process can be confusing to complete without a Realtor to help you. You will want to get the advise and knowledge of a Realtor who has your wellbeing in mind and will accelerate the short sale transaction. It is very important to have a Realtor who won’t miss a detail that could holdup closing the transaction in a timely manner and to the needs required by all parties involved. A qualified Realtor with experience and familiarity in a short sale will also be able to find a qualified buyer to complete the transaction successfully. Homeowners agreeing to a short sale will also be able to consult a tax expert and attain the services of a attorney to help protect themselves from any future claims by the lender. |
HAFA: Home Affordable Foreclosure Alternatives
The Home Affordable Foreclosure Alternatives (HAFA) Program is a government-sponsored initiative overseen by the US Treasury Department and administered by Fannie Mae assisting all Home Affordable Modification Program (HAMP)-eligible homeowners in avoiding foreclosure, specifically through short sales or deeds-in-lieu of foreclosure. HAFA was announced on November 30, 2009 in a HAMP Update titled Introducing the Home Affordable Foreclosure Alternatives Program.
HAFA directs lenders to assist eligible homeowners in quickly and effectively implementing short sales or deeds-in-lieu by providing financial incentives to lenders that carry out foreclosure alternatives through the program’s guidelines set forth in Supplemental Directive 09-09 Revised (revised March 26, 2010). The program was introduced in part with the intent to remove the stigma from short sales and help keep communities from being destroyed through massive foreclosures. HAFA in its current state is only applicable to conventional-type, non-Governmental Serviced Enterprises (non-GSE) mortgages and therefore does not apply to loans owned or guaranteed by Fannie Mae or Freddie Mac.4 These organizations may have plans to release their own versions of HAFA.
If you’re a homeowner looking for answers, if you would like to determine if you qualify for HAFA, or if you need an experienced realtor call First Service Group Real Estate at 208-343-9393 or fill out the form below and we will call you. We are locally owned and operated in the Boise, Area.
