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Posts Tagged ‘making homes affordable’

The new Federal Program designed to aid distressed home owners went into effect on April 5, 2010. The HAFA Program is designed to assist distressed home owners in selling their home, even if they owe more than the home is worth. The program allows owners to participate in a “short sale” with standardized procedures and expedited timelines. Short sales are traditionally the hardest and longest transactions to complete and involve dozens of hours of phone calls and paperwork and a very high level of expertise. HAFA, it is hoped, will streamline this process.

Homestead has provided some basic information on HAFA in a previous post. Click Here. And, we are always available to answer your short sale or foreclosure questions (relating to Wisconsin properties).

On March 26, the Federal government announced a few changes to HAFA including:

  1. Sellers who are relocating can receive up to $3000 as an incentive to close (the original amount was $1,500).
  2. Changing some of the requirements when a homeowner declares bankruptcy and allows them to apply for HAFA (if you are considering a short sale and bankruptcy, you really need an attorney!)
  3. Allows for certain home owners to apply for the HAFA program even if they have not previously applied for a HAMP loan modification.
  4. Clarifies how third-party vendors (negotiators) may be paid.

Bloomberg news recently reported that this new program could be a “game changer.” Indeed, MoodysEconomy.com predicts that the HAFA program may stave off nearly 1.5 Million foreclosures over the next 2 years. While this may be a positive over the long term, it could mean more short sales over the short term. This has the potential to dampen sales prices in certain markets.

One key provision of HAFA is that it REQUIRES the use of a Realtor. All short sales are difficult and require expertise and the federal government recognizes that licensed Realtors will need to be a part of the transaction. Likewise, it is critical to use a title company with an incredibly high level of expertise and experience. Homestead Title has closed hundreds of distressed properties over the last 3 years and provides guidance and expertise whenever appropriate.

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