Introduction of Home Affordable Foreclosure Alternatives (HAFA)

I would love to share my thought on this new 43 page program. Wonderful the administration has a program approved to help home owners. Great for homeowners not so great for banks. The key word in the documentation is 'elective'. This program is not mandatory for the banks.

There is really no incentive in the new program for the bank. The mere offering of $1000 incentive to the bank to complete the sale won't create a blip on their screen. I truly do not see this having any impact on how we as agents are currently helping our neighbors in need; well except for the fact that we need to educate our home owners on all of this.

The program officially starts in April 2010 and requires the 'participating' bank release the deficiency. In my state of Virginia they do retain the right to collect the deficient balance. I see no reason any bank would waive this right for a $1000 incentive, unless the deficiency value was very low. Add to this anyone with a 2nd lien and forget it. The program only allows for $3000 to them on the HUD and then the $1000 incentive. And they too would have to release the deficiency. Umm, I don't think so. If you are actively negotiating short sales in my market you already know that loans generated from 2006 or newer almost all have mortgage insurance. The second lien would in fact be better off allowing the foreclosure in order to improve their bottom line.

According to the program any bank using the 'Making Home Affordable Program' that is unable to approve the home owner for a loan modification then has 30 days to finalize a listing price for the sale and must follow the new HAFA program. The weak link in all that will be the second lien holder as most often they will not be participating in a loan modification at the time, nor using the Making Home Affordable Program.

Also did everyone conveniently forget about contract law? I am not an attorney but recently I was reminded that all the good intentions of this does not wipe out the contract law the mortgage industry and investors are relying on to back their notes.

So don't panic if you are a Real Estate Agent as it most likely will have little impact for now. As for home owners I hate to say it but it's just a bunch of smoke and mirrors. Sure some will be helped by the new system but the way it is written now it falls short of having any significant incentive to drive the banks to jump on board. Sounds great but unlikely to help us much at all.

Download the 43 page Home Affordable Foreclosure Alternatives (HAFA) document here.

Short Sale Document Downloads

I will add to this page as often as I find resources or samples worthy of your attention. :) Select this article occasionally to see what might be new and download what you like to help you get started or streamline your short sale real estate business.

Please note that some of the PDF downloads are password restricted from printing and copying. This was done to keep the unscrupulous people out there on the Internet from taking these and re-branding the content and selling it to others. You will be able to open and easily read a duplicate what you need. Please note we do provide all of this with no security to the agents we consult with.

* Home Affordable Foreclosure Alternatives (HAFA) - 43 Page document describing the new program for short sales.

* BPO Form 4 Page
This is a 4 page document we use to complete and send in with our short sale packages.

* Short Sale Starter Package (3MB)
When I meet and work with Realtors trying to start their short sale business this package shows the types of forms we use. You can use these to recreate your own for you business.

* Sample Short Sale Package (2.5MB)
This is a sample of what we might submit on a short sale request over to a bank.

* Sample Short Sale Bank Approval Letters (.5 MB)
Here are a few sample bank approval letters we have received. Of course the sensitive data they contained has been covered over. :)