Short sales have flooded the marketplace in Dr. Phillips and Windermere the past few years with real estate transactions characterized by response times for offers taking 6 months or longer. It’s not a surprise that many of these short sale transaction are unsuccessful but there’s a new program called HAFA (Home Affordable Foreclosure Alternatives) implemented by the federal government to relieve some of the short falls of a traditional short sale.
Some of the key benefits include:
- a mandated response time of less than 10 days from financial institutions
- relocation assistance to the homeowner of $3,000
- real estate commission can not be changed from 6%
- waived deficiency-meaning the mortgage debt is settled through the transaction and there can be no legal action taken on the outstanding debt
I know, it all sounds good to me but how do you qualify? You have to be an owner occupant who meets the following criteria:
- behind in mortgage payments for more than 60 days
- have a debt to income ratio higher than 31%
- have an outstanding mortgage of less than $729,750
- purchased property prior to January 2009
- have a Fannie Mae or Freddie Mac loan
The cool thing about this program is that you can initiate the short sale even before you get an offer. With a traditional short sale, home sellers would have to get an offer prior to the bank beginning the short sale process. This new program starts the process right away so they can provide the government mandated 10 day response….. awesome…. finally.
The only catch is the bank is involved with setting the list price and you must initiate the HAFA process prior to listing.
In any case, the HAFA program adds much needed improvements to the short sale process and should result in higher success rates for short sale transactions.
The program was implemented on August 1, 2010. To find out more about this program or you would like to list your home under HAFA, please contact me.