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Tuesday, April 20, 2010

Home Affordable Alternatives (HAFA) Program Provides Short Sale Prospects Another Way Out…

In 2009, the Treasury Department introduced the Home Affordable Foreclosures Alternatives (HAFA) program to provide an option for homeowners unable to keep their homes through the existing Home Affordable Modification Program (HAMP).

This new HAFA program went into effect on April 5, 2010.  Here is a summary provided by Shawn Fortenberry, Marketing Manager with Prestige Title of Brevard LLC in Melbourne, Florida. 

Under this new program real estate agents will need to provide a form to their short sale listing clients at the time the listing is taken.  This new completed form will be submitted to the lender (Prestige Title will submit it for me if I list your house) with the short sale package.

The lender will begin a pre-qualification of the seller as a short sale prospect. In the process the lender will determine the value of they will accept. the bank will begin to pre qualify the seller for the short sale. 

Sellers will be evaluated for the the HAMP program alternatives before they will be considered for the HAFA program.

Once the lender provides their approval and a value has been established, an offer can be presented to the lender.

As to who qualifies and who does not qualify for the HAFA program, the following is a summary of the criteria for the HAFA program:
  • Property must be a primary residence and the sellers must live or have lived in the property within 90 days of applying for the program.  
  • Mortgage must be first lien. 
  • Mortgage must be delinquent or seller must be able to show clear imminent default.
  • Loan balance must be less than $729,750.
  • Total monthly mortgage payment must exceed 31% of the gross income of current borrowers. 
This is a new program so you must expect revisions, refinements and general delays but hopefully it will speed the short sale process eventually.

If you are considering a short sale in Brevard County Florida, let us help you with this undertaking!

Gary Waters, Century 21 Baytree Realty, Rockledge, Florida, working with buyers and sellers in Brevard County, Florida.

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