Lisa Cartolano

Obama’s standardized short-sale plan for short sales

The U.S. Dept. of the Treasury recently announced the Home Affordable Foreclosure Alternatives Program (HAFA), which provides instructions for lenders and servicers participating in the Making Home Affordable Program and Home Affordable Modification Program (HAMP). The purpose of HAFA is to create an alternative to foreclosures for homeowners unable to successfully modify their troubled mortgage under HAMP, and to streamline the short-sale process.

KEEP THIS IN MIND

• A short sale is when the lender agrees to accept less than the amount owed on the mortgage instead of foreclosing. Many homeowners and REALTORS® have expressed their frustrations in the short-sale process, criticizing lenders for the amount of time it takes to process and approve a short sale.

• The HAFA program simplifies and encourages short sales and deeds in lieu of foreclosure. It will permit pre-approved short sale terms before a property is listed; release borrowers from future liability for the debt; provide financial incentives to borrowers, servicers, and investors; and prevent servicers from attempting to reduce real estate commissions established in the listing agreement as a condition for short sale approval.

• Under terms of the program, the borrower and/or listing broker have three business days to submit an executed purchase offer and related documents to the servicer on a short sale, and the servicer has 10 business days to respond to an executed purchase offer.

• The servicer also will determine the minimum net proceeds for a short sale. If an offer presented to the servicer by the borrower or listing broker meets the net proceeds requirement, then the servicer must accept it.

• The program currently is available only for non-Fannie Mae- or Freddie Mac-owned loans up to $729,750 and is scheduled to take effect April 5, 2010. However,it is expected that many lenders will choose to implement it before the deadline.

After dealing with many short sales myself with each bank having a different process, having some standardization would be extremeley welcome. It will be interesting to see if the lenders will not only be able to really implement these systems in timely manner and will it really work how it states it should.  I personally am not holding my breath, but it woudl definitely be great to see some standards in place.

To read the full story, please click here: http://www.latimes.com/classified/realestate/news/la-fi-harney13-2009dec13,0,4531315.story

2 Responses to “Obama’s standardized short-sale plan for short sales”

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  JJ says:

  December 20, 2009 at 6:54 pm

  Seems like a win/win and best compromise for all the parties involved-
  troubled homeowner, servicer, buyer, realtor, etc. Will be interesting to see if the servicer can realistically access “market value” on the property.

   

  Reply
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  JJ says:

  December 20, 2009 at 6:55 pm

  Seems like a win/win and best compromise for all the parties involved-
  troubled homeowner, servicer, buyer, realtor, etc. Will be interesting to see if the servicer can realistically access “market value” on the property.

  …can realistically assess “market value” on the property (opps)

   

  Reply