On April 5, 2010 a new program will go into effect that will change the way short sales have been stigmatized and processed for the past several years. Under the US Treasury’s new HAFA plan (Home Affordable Foreclosure Alternatives) short sales will be more streamlined, less stressful and offer more to the seller in terms of commitment, guarantees and cash. The new program not only offers incentives to the underwater borrower but also to the lender, in an effort to finally reach some level of balance between the two.
If you are a home owner, unable to pay your current mortgage and struggling to find a solution, this may be the solution!
To find out all of the important details of the plan and how it differs from a traditional short sale read below:
|New HAFA Short
|Guaranteed Debt Forgiveness||No||Yes||No|
|Pre-Approved Short sale terms||No||Yes||No|
|Provides up to $3k relocation assistance||No||Yes||No|
|Lender pays ALL servicing fees (0 out of pocket expense to seller)||No||Yes||No|
|Lender pays Realtor commission||Yes||Yes||Yes|
|Minimal damage to Credit score||No||Yes||No (most damaging)|
|Guaranteed Completed in under 5 months||No||Yes||No|
Why is this so HUGE?
In the past the lenders have tried to settle hardships with borrowers by modifying their loan. If the borrower did not qualify for a modification or was still unable to pay after a modification was granted, the home would either be listed as a short sale or eventually go into foreclosure. In these situations the lender is able to come after the borrower for the remaining dollar amount. (For example: a borrower’s mortgage amount is $200,000 the home is sold as a short sale for market value at $135,000. The lender holds the borrower responsible for the $70,000 difference.)
With the new HAFA program, the lender guarantees total debt forgiveness. They promise to NEVER come after you or hold you responsible for the remaining balance.
What’s in it for you?
In addition to the lender guaranteeing total debt forgiveness and pre-approving the short sale terms (so you can move on with your life more quickly and avoid foreclosure!), Cash for Keys is the only program that offers you up to $3,000 cash in relocation assistance. The HAFA program is also probably one of the least credit damaging options available. In a traditional short sale your credit gets hit each month you miss a payment, with the process taking so long it can add up to over a year of missed payments. And the lender can still hold you responsible for the difference.
The new program requires that the entire process take no more than 5 months, there-by minimizing the damage on your credit report and releasing you from future liability.
Find out if you qualify for HAFA today:
Simply fill in the form below or call one of our Certified Distressed Property Experts at 407-340-6458 and find out if you could and should consider this program!
Cash for Keys (or HAFA) is designed for borrowers who are facing a hardship and cannot pay their mortgage. A lender participating in the program must consider borrowers for this new program if they qualify. After filling in the form you will receive all the details about the program via Email and find out if you qualify. For a more immediate response please call one of our CDPEs at 407-340-6458.
How will this affect the real estate market?
Part of the problem currently affecting real estate is the flood of homes on the market. Traditional short sales take up much of this inventory. Because the negotiation process with the lender is so slow, these homes can sit for months after an offer for purchase has been made. The vacant home begins to show neglect and eventually prices in the community drop even further spurring more short sales and prolonging the instability of the market. In addition the prospective buyer may get tired of waiting for a response and finally move on to another property.
With the new Cash for Keys program the lender pre-approves the short sale terms and promises to respond to offers with in 10 days. The simplification of the process and a rapid response to offers helps the market stabilize more quickly and reduces the number of homes available for sale.
What’s the First Step to get started?
If you want to participate in the HAFA or any short sale program your home will have to be listed with a Realtor. Please remember that there will be absolutely NO fees for you – we will be paid by your lender! Our team has been trained in all aspects of successful short sale completion and we are CDPE certified and have attended the HAFA training of the Certified Distressed Property Institute! You can rely on our expertise and professionalism to help you with the successful sale of your home.
Please contact us today at 407-340-6458 (or fill in the contact form on the top left of this page) to schedule a confidential consultation so we can inform you about your options. This is a free service and there is absolutely no obligation!