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Hi folks. Good news for folks that qualify for a HAFA Short Sale. As of February 1, 2015 the relocation incentive available to the occupant/borrower is increasing from $3,000 to $10,000!!

That’s right we may be able to get you $10,000 to assist you with moving from your property once the HAFA Short Sale is completed. These funds are paid to the OCCUPANT of the property even if they are not the owner/borrower.

My advice is don’t move!! Stay in your property while we go through the HAFA Short Sale process. The lender will compensate you for doing so. They want you there to maintain the property.

You may be eligible for a HAFA Short Sale if you meet all of the following criteria:

• You have a documented financial hardship.

• You have not purchased a new house within the last 12 months.

• Your first mortgage is less than $729,750.

• You obtained your mortgage on or before January 1, 2009.

• You must not have been convicted within the last 10 years of felony larceny, theft, fraud, forgery, money laundering or tax evasion in connection with a mortgage or real estate transaction.

*Eligibility criteria are for guidance only. Contact your Orlando Short Sale Specialist to see if you qualify for HAFA.

HAFA offers benefits that make the transition as favorable as possible:

• You can get free advice from HUD-approved housing counselors and licensed real estate professionals.

• Unlike conventional short sales, a HAFA short sale completely releases you from your mortgage debt after selling the property. This means you will no longer be responsible for the amount that falls "short" of the amount you still owe. The deficiency is guaranteed to be waived by the servicer.

• In a HAFA short sale, your mortgage company works with you to determine an acceptable sale price.

• HAFA has a less negative effect on your credit score than foreclosure or conventional short sales.

• When you close, HAFA may provide $10,000 in relocation assistance.

So folks, if you are experiencing difficulties making your mortgage payment then give me a call. As your Orlando Short Sale Specialist I will be able to guide you through the entire process.

Together we can devise a plan to get you out from under your hardship with the least impact to you and yours.

 Please feel free to reach out to me if I can be of any assistance.

Too often, many homeowners doing a short sale read up on the internet and speak to friends, coworkers, relatives and anyone else whose done a short sale, about how they received $3000 relocation assistance by doing a HAFA short sale.

Sadly...this is NOT always the case. Simply going into the HAFA short sale program here in CA does NOT guarantee you will walk away with money.

Case in point.....First your realtor needs to determine if your servicer(the one you normally make or made your mortgage payments to for your 1st lien)participates in the HAFA program. Many servicers DO NOT!.

Also, even if your servicer(1st mortgage lienholder) participates in HAFA, the INVESTOR who is above your servicer and has final say so...may NOT be a HAFA participant.

Many 1st mortgage liens are SOLD to a private investor or group of investors that DO NOT belong to HAFA, nor do they have to abide by HAFA's guidelines and rules. 

OK, so let's say your 1st lien holder and their investor DO participate in HAFA and allow you to do a HAFA short sale.

If you have a 2nd lien, you need to also find out if THEY participate in HAFA...for if they DON'T...then guess what may happen when you go to close? Your 2nd lien holder could see the $3000 monies awarded to the seller(YOU) by the 1st lienholder and decide to GRAB or TAKE any monies on the table. Thereby preventing YOU, the homeowner from getting ANY MONIES awarded to you. Don't say NO...because I've seen it done.

Also...here's the kicker....and even better than the above. Let's say..Mr and Mrs Seller had a 1st and a 2nd on their home, and the 1st even agrees to a HAFA short sale, and so does their investor.And let's say your 2nd lien servicer WAS a participant in HAFA and agreed to participate. *  If your 2nd in this process gets SOLD OFF or CHARGED OFF during this process to a collection co. for x amount of months of NON PAYMENT on your part, then that COLLECTION co is NOT HELD to HAFA's rules and can collect the relocation monies at funding. The collection companies ARE NOT SERVICERS...and therefore they DO NOT belong or partipate in HAFA's rules or programs...so  since they are a collection company..they can TAKE the monies left on the table. Remember people...they are a COLLECTION company...they don't call them a collection company for nothing!!!!

Remember the 2nd lien holder, whether it be a servicer or now a collection co...has begrudgingly accepted what the 1st will give them, and they are NOT happy.

Please make sure when doing a short sale that you interview an agent who has done them extensively and has much experience in negotiating short sales. Please don't assume EVER that because an agent has these CDPE or SFR designations...that they KNOW or are VERSED in NEGOTIATING short sales. These companies handing out designations are PRIVATE COMPANIES charging realtors a $500 or more fee to take a 1 day or sometimes just a several hour course in short sales. THIS DOES NOT mean your realtor knows in the slightest how to navigate and negotiate the slippery slope of short sales. Many of these realtors who have gotten their licenses not that long ago or get these designations because they know that 50% of the market is upside down and if they want ANY business, they better get with the program and start handling short sales.

I am not knocking these designations....there are agents who have them and legally have experience and know how to handle short sales... the main thing is to check for experience in how many short sales they have done...and if they have DONE it themselves. Farming it out to 3rd party negotiators or attorneys, does NOT guarantee success.

Please ask many questions about the short sale process and scenarios. There is no magic wand that anyone can wave to make sure your short sale goes smoothly, for many things occur as roadblocks to navigate along the way. But with a strong negotiating agent who is familiar with all the ins and outs and possible scenarios that the banks, lenders, servicers, investors,and collection agencies throw our way....hopefully having this extensive knowledge and experience can help you obtain a successful outcome.

Improvements and more improvements have been the recurring case for the government sponsored enterprises Freddie Mac and Fannie Mae. Although these GSE’s (Government Sponsored Enterprise) had a slow start in finding the right solutions for the housing crisis we are facing, the momentum for improvements via federal guidelines have picked up speed. The Goal: Get through distressed properties quickly to catalyze the housing recovery. How? Streamline their short sales. Let’s explore new and improved federal guidelines these GSE’s will implement on November 1^st.

Click the links below to see if your mortgages are backed by Freddie Mac or Fannie Mae:
Freddie Mac or Fannie Mae

Please read this concise document from FHFA.GOV HERE for the new Fannie and Freddie Guidelines and eligibility requirements.

Notes on new FHFH Guidelines:

• A significant change for starters is homeowners being eligible for a short sale without being in default or at risk of imminent default. If the homeowner is able to show hardship and back it up with proper documents, a short sale is now possible. Note that it is not only for those who are relocating due to current or new employment (this may be confusing).
• The right to pursue deficiency waiver for monetary exchange or promissory note applies to those who have sufficient income or assets. Even then, if you have a solid negotiator and/or short sale team, you can walk away from the property with little liability.
• For those who are in serious financial distress (missed several payments and have low credit scores), a short sale will be more streamlined as documents required to show hardship has been reduced or eliminated.

In the past, the GSE’s guideline alterations were not received well by many professionals in the real estate community. However, these new changes presented by the FHFA were well received by U.S. Realtors and an international credit rating agency. This includes the National Association of Realtors who said, “Making the short sale process go more smoothly will help avoid foreclosure and keep homes occupied.”

www.seattleshortsaleblog.com

Peter

HOME AFFORDABLE FORECLOSURE ALTERNATIVES (HAFA)

UPDATES AND EXTENSION: EFFECTIVE JUNE 1, 2012

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. In my last blog, I gave a brief explanation of what (HAFA) is and this blog is to let you know of the recent changes to this wonderfull government program.

This program was made to give homeowners just like you options to Avoid Foreclosure.

To learn more about if you are eligible for this program or if a Phoenix Short Sale is right for you...Clickhere for your...

 If you feel that you are headed toward Foreclosure, and need Foreclosure Solutions, or if you are avoiding facing that fact, the sooner you reach out for help, the better your options.  The impact of Foreclosure in Phoenix, Arizona is huge and the sad fact is that it’s often avoidable with other options and many cases it's usually a Short Sale.  The good news is that there are Foreclosure Solutions!

Arthur Wainio

www.shortsalewitharthur.com

 What if you didn't have to fight foreclosure alone?

 Truth is, you don't.  There is a government program, Home Affordable Foreclosure Alternatives (HAFA), which has been put in place to provide you with better solutions, including more efficient short sales or deeds-in-lieu of foreclosure.

 Short sales and deeds-in-lieu can help to settle your mortgage debt, clear your mind of stress, and save you and your family from the financial challenges of foreclosure.  The government also offers a $3000 homeowner incentive to help with getting relocated and moving on with your life.

 So What in the World is HAFA....

This program was made to give homeowners just like you options to Avoid Foreclosure.   To find out if you are eligible for this program or if a Phoenix Short Sale is right for you...Clickhere for your...

If you feel that you are headed toward Foreclosure, and need Foreclosure Solutions, or if you are avoiding facing that fact, the sooner you reach out for help, the better your options.  The impact of Foreclosure in Phoenix, Arizona is huge and the sad fact is that it’s often avoidable with other options and many cases it's usually a Short Sale.  The good news is that there are Foreclosure Solutions!

Arthur Wainio

www.shortsalewitharthur.com

Another HAFA Short Sale approved!  Indian Creek Villas, South Palm Desert.  This was a Bank of America, only one loan.  Hardship was death in the family and the emotional toll it took on the homeowner.  Listed and approved in approximately 60 days..we have 45 days..until 12/1 to close it.  Cute Condo that sold at the peak for over $200,000...approved at $58,500.  Hard to believe!  The owners will be primary residents so lucky for them..happy Buyers, relieved Seller with $3,000 to help her relocate. 

1. HAFA.pdf
2. NAR and HAFA.FAQ
3. NAR and HAFA Cheat Sheet

As you may have heard on the news, the U.S. Treasury is trying to make short sales, well, shorter! Many homeowners and buyers have been plagued for waiting months for short sale approvals. Realtors are at their wits end. Lenders are overloaded with requests. Waiting five months for a short sale approval is becoming the norm. The new program that is supposed to help is called “Home Affordable Foreclosure Alternatives Program” or “HAFA”.

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. Remember, I am condensing here and pointing out what might be important to you, the homeowner, as it relates to short sales. 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”. So this does not look like a slam dunk, guys!

Expanding on that, HAFA states that a participating lender must follow its investor guidelines to create their own policy, with criteria for your eligibility to include: how cooperative and “motivated” you are, the amount of the loss on your mortgage, and local market conditions, among other things. In addition, HAFA states that it is up to the servicer and investor to decide if allowing you to be in this special short sale program is in their best interest. That tells me they have a lot of leeway in deciding if you will benefit from HAFA at all.

THE GOOD NEWS if you get a short sale through this program, there can be no deficiency judgment later! That will help many leery Bank of America short sale sellers, whose approval letters reference the right to seek a deficiency in the future. More good news- your lender may not ask you for a promissory note or a cash contribution if they participate in HAFA and you do a short sale. More “positives”…

POSITIVE: If you are eligible for this program, and your lender participates, you must be given the chance to do a short sale or deed-in-lieu prior to the lender foreclosing.

POSITIVE: The program says you do not have to resubmit your financial paperwork for the short sale (a big pain for many short sale sellers) after you have already provided it for HAMP.

POSITIVE: Your lender will determine the acceptable net from your anticipated short sale prior to you participating in the program. This should save time versus a typical short sale, where the lender determines if a contract is acceptable after it is submitted for consideration. The minimum proceeds will be stated in terms of actual dollar amount, percentage of market value or percentage of your list price.

POSITIVE: Your lender will state what closing costs they will pay for the sale in advance. This will save contracts where the buyer asks for too much in closing costs- no wasted negotiating.

POSITIVE: You will receive $1500 relocation incentive upon closing your short sale.

*** OTHER THINGS you need to know:

You cannot remain in the home as a tenant after closing.

You must not be related to the buyer (arms length).

You cannot earn a real estate commission if you are a licensee and sell the home yourself.

You may be required to make payments deemed “affordable” by HAFA until your property is sold. This is based on a calculation of your income and expenses.

You must maintain the property and pay association dues until it is sold.

The servicer will pay your junior lienholder up to $3000 (or 3% of the junior balance) to complete the short sale, but YOU must take care of other impediments to selling, for example, an IRS tax lien or a judgment which might affect your sale. Your senior lienholder gets a monetary incentive when your junior lienholder waives the right to a future deficiency. This part of the program “may” inspire better terms from your second mortgage holder. NOTE: HAFA does not state this as a requirement, though, so you may still have a responsibility to pay your junior lienholder cash or a promissory note if they agree to the short sale!

If you have mortgage insurance (MI) on your note, the MI company must agree to waive its right to a cash contribution from you or note or you won’t qualify for HAFA.

MORE PROCEDURES: When you receive an offer on your property, you will have three business days, with your Realtor’s assistance, to get a copy of the contract, buyer pre-approval, and junior lien documentation to your lender. If you are using the standard HAFA program with a pre-approved net price (SSA), you should receive an approval or rejection with 10 business days, or about three weeks of receipt. However, if you have not gone through the HAMP modification program and standard SSA (sorry I am throwing in acronyms again), then your approval time will be lengthened. In this situation (alternate RASS), the program requires 14 more days to allow you to decide if you want a modification (well, of course at this point you don’t or you would have already done so, right), and for you to provide all the financial documentation necessary.

Finally, don’t expect to get off the hook with credit reporting or tax obligations from your short sale. Even with HAFA, your short sale will be reported “account paid in full for less than full balance” and you should consult with an accountant to determine any tax liabilities from your cancelled debt, especially from a second mortgage not related to your home purchase.

There is a lot to this new HAFA program, which officially starts on April 5, 2010 (although your lender may participate sooner). How many people it will actually help is questionable. If it does work, it will speed up your short sale. If it does not, there are still many options available to you.

It's Wendy!

Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.

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Call Wendy Rulnick, Destin real estate agent, to list and sell your home or condo or help you buy a home or rental property on the Emerald Coast of Florida in Walton, Okaloosa and Santa Rosa County- Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. Wendy is a short sale and pre-foreclosure specialist and can help you sell or buy a short sale property in and around Destin Florida and the Emerald Coast.