Sellers and Buyers of Short Sale Properties - The short sale process is about to be adding choices in streamlining the process where applicable. On November 30th, 2009 the Treasury Department released a new form and guideline and gave it the acronym of HAFA. HAFA is component of the Home Affordable Modification Program (HAMP). Because of the many problems with short sales, the (NAR) National Association of Realtors, has urged the Obama Administration to take action now.
The HAFA program will provide incentives in connection with a short sale or a deed-in-lieu of foreclosure (DIL) used to avoid foreclosure of a loan eligible for modification under the HAMP program. These loans cannot be owned or guaranteed by Fannie Mae or Freddie Mac, and according to the report, both Fannie and Freddie will be issuing their own versions of HAFA in coming weeks.
Many problem issues will be addressed in the program including: pre-approval sales terms before listing the property, prohibiting servicers from requiring reductions in real estate commissions that do not exceed the 6 percent, paying incentives, releasing borrowers from future liability for the unpaid portion of the first mortgage debt, and lastly imposing deadlines at each stage.
This is definitely a step in the right direction for both the real estate industry and buyers and sellers in the short sale process.
The program does not take effect until April 5, 2010, but servicers may implement it before then if they meet certain requirements. The program ends on December 31, 2012.
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