Debbie Tuttle,ABR,CRS,GRI

-  the U.S. Treasury is trying to help homeowners get their Short Sales completed

 The new program that is supposed to help is called “Home Affordable Foreclosure Alternatives Program” or “HAFA”. Many homeowners and buyers have been plagued for waiting months for short sale approvals.  Us realtors are at their wits end.  Lenders are overwhelmed with requests.  Waiting 5-6 months for a short sale approval is becoming the norm; sometimes longer!! 

What Treasury is trying to do is help streamline the short sale process by suggesting guidelines to the participating lenders.  That’s “suggestions” and “guidelines”.  That does not equal “requirements” in the way I read it.

Here is a summary of the proposed short sale changes, who is eligible, and what you might expect to change if you do qualify for the HAFA program. There are many details, requirements and forms that make up this new program.

 ARE YOU ELIGIBLE?

You might be eligible for HAFA if your lender participates in the Home Affordable Modification Program (HAMP), and your mortgage is not underwritten by Fannie Mae or Freddie Mac.  HAMP offers you the opportunity for assistance by lowering your payments or delaying payments to keep you in your home.  You must meet the HAMP requirements as follows, to be part of HAFA, whether or not you choose a modification.  These qualifications are:

1) You have missed payments or are about to default

2) The home is your primary residence

3) You got your primary mortgage before Jan. 1, 2009 and your balance is less than $729,750

4) Your monthly mortgage payment is greater than 31% of your gross income

The HAFA Supplemental Directive states that the servicers (your lenders) have the “option to determine the extent to which short sales or deeds-in-lieu will be offered”.