This past quarter my most Frequently Asked Questions have been about distressed properties, those that are in the process of being foreclosed or have been foreclosed. I wanted to dedicate the next few post to answering everyones questions. I found this article from Old Republic Home Protections website.
Short Sales Explained
Understanding the Short Sale Transaction
A“short sale” is a real estate transaction in which a home seller’s mortgage lender agrees to accept a payoff that is less than the amount owed on the mortgage. When homeowners find themselves with a serious financial
hardship, and owe more on the mortgage than the home is worth, a short sale may be a way to avoid foreclosure by negotiating a settlement with the lender.
A successful short sale can be a “win” for all parties involved: the seller is relieved of the financial burden of the mortgage, the losses taken by the lender in the short sale can be significantly less than an eventual foreclosure, and the buyer gets a fair deal on the purchase.
Negotiating a short sale is no easy task; therefore, it is highly
suggested that homeowners considering a short sale work with a licensed real estate professional who specializes in short sales. An experienced agent/broker will be well qualified to guide a homeowner through the short sale process, facilitate communication and interaction with the lender, assist with collection of lender-required documents, and bring the transaction to a successful close.
What is a HAFA Short Sale?
HAFA (Home Affordable Foreclosure Alternative) is a federal government program designed for homeowners who can no longer afford their mortgage payments and wish to avoid the negative impacts of foreclosure when home retention is not an option. Under HAFA, a homeowner can exit home ownership gracefully and without the liability associated with their mortgage debt.
The Benefits of a HAFA Short Sale:
• No Deficiency Judgments • No Cash Contributions at Closing • No Promissory Notes • $3,000 to Seller for Relocation Assistance • AdditionalIncentivesforSecondMortgages,upto$6,000moreatclosing
Eligibility Requirements for a HAFA Short Sale:
• Home must be or have been the primary residence in the last 12 months • Seller must have a hardship • First lien mortgage cannot be a government loan • Mortgage originated on or before January 1, 2009
• Mortgage is delinquent or default is foreseeable • Current unpaid principle balance is $729,750 or less
For more information about this program, please call me and I will help you better understand a HAFA short sale.
