Unfortunately, shorts-sales continue to be a growing segment of the real-estate market here in Southern California. Some local real-estate trade ogranizations are projecting that short-sales will make up roughly one-fourth of all single family sale transactions in Los Angeles County in 2011.
People may be forced into a short sale for a range of different reasons. Loss of job, divorce, medical hardship, bankruptcy, or the reset of an adjustable-rate mortgage are all reasons which may cause a home-owner to request a short-sale package from their lender.
If you find yourself having to short-sell you house, you absolutely have to 'HAFA'.
The Home Affordable Foreclosure Alternatives Program, or HAFA, is a combinations of available government programs designed to keep home-owners in their home.
The final step of all HAFA programs is a government sponsored short sale process. A HAFA short-sale is less damaging to both the bank and the home-owner. Currently most major lenders in America have signed on with the government and are participating in the HAFA short sale program. However, the program must be specifically requested by the home-owner at the time of originating the short-sale process.
Some of the benefits of completing a HAFA short-sale are as follows:
- Participating banks cannot file a deficiency judgement against the short-seller
- 2nd mortgage note holders can receive an additional $6,000 in payoffs directly from the government
- Participating banks will forego the foreclosure process while a HAFA short-sale is being processed
- Sellers may be eligible for up to $3,000 in government funded relocation assistance
- Reduced damage to the home-owners credit score upon completion of the short-sale
- Ability to more quickly re-establish credit and become a home-owner again after three years
Like anything the government does, correctly executing a HAFA short-sale is a little more difficult than completing a traditional short-sale. However, the benefits are definitely worth the extra paperwork.