Replies to This Discussion

Permalink Reply by Sean Wilder on April 19, 2010 at 10:26am

Yes. The HAFA guidelines say the lender can make the seller pay up to 31% of their gross income toward mortgage payments during the program. If they do not pay, they could be discqualified. Which just means you have to do the short sale the old fationed way.

Permalink Reply by CEDRIC MCGREW on April 19, 2010 at 10:31am

wow thanks i missed that part in my cdpe and five star training wow.

Sean Wilder said:

Yes. The HAFA guidelines say the lender can make the seller pay up to 31% of their gross income toward mortgage payments during the program. If they do not pay, they could be discqualified. Which just means you have to do the short sale the old fationed way.

Permalink Reply by Bryant Tutas on April 19, 2010 at 12:12pm

Cedric. Sean is correct that the lenders may require this as part of the SSA (Short Sale Agreement). The reasoning of course is that if the seller is stating they just can't afford the payment then surely they can afford to pay 31%. Now my guess is that if they don't have the ability to pay then they won't be asked to.

Permalink Reply by Darlene Krause on April 20, 2010 at 7:59am

I did not see anywhere in the agreement that the payments would be 31%. It does state that they may be required to make partial mortgage payments during the short sale process. What area says 31%?

Permalink Reply by Dave Halpern on April 22, 2010 at 8:13am

These payments could easily add up to exceed the $3,000 that the borrower may never even get if the HAFA short sale doesn't get approved.

Permalink Reply by Bryant Tutas on April 22, 2010 at 8:26am

Dave, The borrowers also have the option of making full payments, doing a DIL or being foreclosed on. The payments would be outlined in the SSA (Short sale Agreement). the SSA will also let the agent and borrower know the minimum NET, the commission and any allowances for closing costs. It gives the borrower 4 months to fond a buyer under these terms. During this period the lender/servicer MAY require the borrower to make payments not to exceed 31% of their gross monthly income.

So the reality is they would have already been approved for the short sale prior to making any payments. Assuming of course the borrower agrees to the terms and conditions outlined in the SSA.

Short Sales, even with HAFA, have negative consequences. They are not simply just a get out of jail free card. The good thing is that if they do go through the HAFA program the borrower is done at closing. There will be no deficiency judgments hanging over their head nor will they have to sign a note or bring cash to closing. It's not a bad deal if you are having a hardship and foreclosure is imminent.

Dave Halpern said:

These payments could easily add up to exceed the $3,000 that the borrower may never even get if the HAFA short sale doesn't get approved.

Permalink Reply by Dave Halpern on April 22, 2010 at 8:53am

Bryant,
Thanks for the clarification.

Permalink Reply by Paul Francis - Vegas Short Sales on August 7, 2010 at 9:26am

Cedric,

Any updates on how this one turned out for you?