In my book, the jury is still out on whether or not HAFA short sales are working.
According to the Congressional Oversight Panel, the Troubled Asset Relief Program watchdog, the Treasury has spent $4.3 million through HAFA, inducing roughly 661 short sales since the program launched in April 2010.
The Treasury, in an effort to get more HAFA short sales completed has revised some program requirements that became effective February 1, 2011.
Here is a brief summary:
- A borrower's reason for relocation no longer needs to be connected to employment nor be of a certain distance from the property. Borrowers may have moved up to 12 months before certain dates in the HAFA process but may not have purchased another home.
- Servicers are not required to determine if the borrower's total monthly mortgage payment exceeds 31% of gross income. Borrowers will still be required to show a hardship.
- Servicers are now required to communicate approval, disapproval, or a counter offer no later than 30 calendar days after receiving an (i) executed sales contract, (ii) Alternative Request for Approval of Short Sale, and (iii) a signed Hardship Affidavit.
- If an unsolicited borrower requests HAFA, the servicer has 30 calendar days to determine the borrower's eligibility and, if eligible, send the borrower the Short Sale Agreement.
- HAFA will no longer impose a 6% cap on payments to each subordinate mortgage/lien holder. The $6,000 aggregate limit is still in effect.
The benefits of HAFA for the Seller continue to be:
- No deficiency judgment
- No seller contribution or promissory note
- $3,000 relocation payment to seller
Read the official HAFA Policy Update
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Las Vegas Homeowners and Buyers:
Jan O’Brien is an expert with the Las Vegas short sale process. She is the co-author of the Certified Foreclosure Alternatives Consultant designation course. Call Jan direct at 702-858-9191 to schedule a Foreclosure Alternatives Consultation today.
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