Get $3,000 to short sale your home?
A short sale is when a troubled borrower owes more on his home than it is actually worth; therefore, he can’t even sell it, but rather is forced to foreclose. Short sales help the borrower sell the home, once approved by the lender to accept a short payoff. Lenders like this method because it saves them tens of thousands of dollars in most cases to avoid the foreclosure process and sell it while it’s in a better condition.
Tragically, only a small number of homeowners have been approved for a short sale by their lenders, and the small percentage of people who were approved had to wait for a 6-9 month short sale process. In many cases, they lost their homes to foreclosure during this tedious and time straining attempt.
On April 5th, the government enacted the new Home Affordable Foreclosure Alternatives program, known as HAFA. Under this new legislation, borrowers will receive $3,000 to relocate. Short sale servicers will earn $1,500 for handling the transaction. The holders of the mortgages, or investors, will receive $2,000 for participating and helping to share proceeds with any secondary lien holders.
Lenders that participate must make it clear to the homeowners as to what market price they will be willing to accept, and they must approve offers that meet the guidelines within 10 days.
There is no doubt this program will help thousands of people, and speed up the short sale process. In many market areas, it’s been estimated that up to 2/3 of all transactions this year will be from short sales. A foreclosure does twice as much damage to your credit score than a short sale, so homeowners should really consider this option before they just walk away from their homes.
Consult your local agent to discuss your options and alternatives to foreclosure!
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