Short Sale And Home Loan Modification Assistance: Help is on the way, starting on April 5th
November 30, 2009, the Treasury Department released the guidelines and forms for its Home Affordable Foreclosure Alternatives Program also known as HAFA. HAFA's intention, based on qualifying factors, is to make it easier for homeowners, who do not qualify for a Home Loan Modification, to have the alternative of selling their home as a "Short Sale". This will dramatically speed up the often long and drawn out process of having the lender approve the owner for a short sale. By streamlining the process, HAFA will help to stabilize inventory levels and also home prices. How so? There is an easy answer. The cost/loss of quickly approving a short sale out weighs the cost and markdown of price of placing a home into a foreclosure. Consumers, the banks and the real estate market will win. HAFA works by providing monetary incentives connected with a short sale or a deed-in-lieu of foreclosure (DIL) in order to avoid foreclosure on a loan eligible for modification under the HAMP program. Servicers participating in HAMP are also required to comply with HAFA. In other words, if a client fails to qualify for a home loan modification the bank/ lender will counter the loan modification applicant with an approved Short Sale Agreement with a predetermined price based on the market value. This allows the client to go to market immediately allowing for a motivated buyer to purchase the property quickly without further eroding home values.
A list of servicers participating in HAMP is available at MakingHomeAffordable.gov. HAFA applies to loans not owned or guaranteed by Fannie Mae or Freddie Mac, which will issue their own versions of HAFA in coming weeks.
Learn More about the Home Affordable Foreclosure Alternatives Guidelines
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