Short sale rules change quickly and quietly. What does that mean? It means that the new directive from the Treasury Department did not make my morning newspaper or was splashed all over CNN. It was sent by email from FNMA, buried in my junk mail. Like always Important News never makes the NEWS.
So here is the News, which is GOOD NEWS!! The Treasury Dept has announced that they have added a new program to HAMP (Home Affordability Modification Program). HAMP is the program that was created so servicers were able to offer loan modifications for people who were facing foreclosures. Well, it has not worked as well as they had hoped. So the new program, HAFA, was created for borrowers who were unable to qualify or keep up with the terms of the trial loan modification, the borrower would then qualify for a Short Sale or Deed-in-lieu.
Now this program is for NON-FNMA and NON-Freddie Mac backed loans. FHA loans have a similar program that has been in place for years. Servicers of private backed loans may participate in the program. Since many of these banks took bailout money, they may be pressured to heed the directive. The Treasury has introduced incentives for servicers who participate in the progam as a carrot.
As many of you know the ramifications of a short sale are better then that of a Foreclosure, but the borrower can still be stuck with deficiencies and/or a promissory notes. Plus the servicers can be unhelpful and hard to work with!! Until now, finally, servicers will reward people who sell their home short instead of walking away from their home. The servicers will also be rewarded for working out the problem instead of closing the door. It is nice to see that doing the right thing has merit again!!! Some program highlights below.
Mike Sher
The HAFA program simplifies and encourages short sale and DIL options by:
- Offering eligible borrowers viable alternatives to avoid foreclosure;
- Providing a standardized process and time frames for handling viable alternatives;
- Allowing pre-approved short sale terms before a property is listed;
- Preventing servicers from attempting to reduce real estate commissions established in the listing agreement as a condition for short sale approval;
- Releasing borrowers from future liability for the debt; and
- Providing financial incentives to borrowers, servicers and investors.
Borrowers should be (or request to be) considered for a Home Affordable Modification Program (HAMP) modification and other retention programs before being considered for HAFA.
Details for servicers of mortgage loans that are not owned or guaranteed by the GSEs are provided in Supplemental Directive 00-09: Introduction of Home Affordable Foreclosure Alternatives -- Short Sale and Deed-in-Lieu of Foreclosure, available on HMPadmin.com, the administrative Web site for servicers. Fannie Mae will provide guidelines for servicers for Fannie Mae loans in the days to com
Mike Sher
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he Mike Realtor Team Blog - Metro Detroit/Oakland County
Servicing in Southeast Oakland County, Auburn Hills, Birmingham, Bloomfield, Berkley, Beverly Hills, Canton, Clawson, Farmington Hills, Ferndale, Huntington Woods, Northville, Novi, Pleasant Ridge, Plymouth, Royal Oak, Rochester Hills, West Bloomfield, Troy, etc. We worked with: Bank of America, Country Wide, HSBC, EverHome, Litton, GMAC, Chase, Wells Fargo, Flagstar, Fifth Third, Charter One, Comerica, Am Trust, US Bank, National City
But, We Can Help!
This is a competitive real estate market. If you have to sell and can not, perhaps it is time to look at a Short Sale. The Mike Realtor Team has performed dozens of Short Sales for professionals who have lost their job, income has declined, medical problems, relocation, retirement, divorce, loss of spouse, unable to make ends meet, or other reasons not listed.
