Yesterday the Treasury along with the President released the details on a program I wrote about earlier dealing with the time issue of short sales, but it doesn’t stop there. They not only dealt the time issue a blow but also addressed the loan shortfall issue of sold price vs mortgage amount by implementing no cash contribution, promissory note, or deficiency judgment is allowed for the difference.
More great news is this program is also focused at non Fannie or Freddie loans which are the bulk of the loans with problems that had nowhere to turn as past programs didn’t include them.
Remember, the first step in a short sale is to get the property listed and show price adjustments, this along with your hardship will get the bank attention and the process done and get your family back on track quicker.
Contact me for more information, Broker Dave 407-330-0060
Fed housing program encourages short sales
WASHINGTON – Dec. 1, 2009 – The Obama Administration, through the Treasury Department, announced new housing guidelines yesterday. While a series of announcements highlighted different programs, the National Association of Realtors (NAR) focused on changes that will make it easier for real estate associates to deal with short sales and “deeds in lieu of foreclosure.”
The program’s official name is the Home Affordable Foreclosure Alternatives Program (HAFA), and it’s part of an existing initiative, the Home Affordable Modification Program (HAMP). HAFA applies to loans not owned or guaranteed by Fannie Mae or Freddie Mac, which cover over half of all U.S. mortgages; however, Fannie and Freddie will issue their own versions of HAFA in coming weeks.
While HAFA’s goal is simple – increase the number of short sales and “deeds in lieu of foreclosure” by simplifying the process – the rules are complex, and it comes with 43 pages of guidelines and forms. Among other things, HAFA:
- Allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).
- Prohibits servicers from requiring a reduction in the real estate commission agreed upon in the listing agreement (up to 6 percent).
- Requires borrowers to be fully released from future liability for the first mortgage debt (no cash contribution, promissory note, or deficiency judgment is allowed.).
- Provides financial incentives: $1,500 for borrower relocation assistance; $1,000 for servicers to cover administrative and processing costs; and up to $1,000 for investors.
The program does not take effect until April 5, 2010, but servicers may implement it before then if they meet certain requirements. The program sunsets on Dec. 31, 2012.
For more information or to discuss your needs email use at orlando@orlandohomestore.com