Seminole County Short Sale Realtor Tip — HAFA

From your Seminole County foreclosure attorney and Seminole County short sale realtor, HAFA provides a great foreclosure alternative: the short sale. Many Seminole County homeowners in foreclosure have been devastated by the economic upheaval and may feel that they can no longer afford the mortgage payments on their home, but want to avoid foreclosure. Many of these same Seminole County homeowners would benefit from a Seminole County short sale, but are frozen, and don’t know what to do to possibly minimize the negative effects that foreclosure or bankruptcy would have on their credit history. The federal government now offers the Home Affordable Foreclosure Alternatives (HAFA) Program, which offers Seminole County residents FREE Foreclosure help.

HAFA offers Seminole County, Oviedo and Winter Springs homeowners, their mortgage servicers, and investors an incentive to avoid foreclosure and achieve a “win-win” outcome for all involved. HAFA offers these incentives so that mortgage servicers will allow those in foreclosure, or economically distressed homeowners who owe more than their home is worth (or are “underwater”) to escape from these burdensome loans by completing a short sale or deed-in-lieu of foreclosure.

Short Sale

In a short sale, homeowners can avoid foreclosure if the servicer allows the homeowner to list and sell the mortgaged property, knowing that the net proceeds from the sale will not be enough to pay off the mortgage (or mortgages). Thus, the net proceeds of the sale are “short” of the mortgage amount.

Deed-in-Lieu of Foreclosure

With a deed-in-lieu of foreclosure, the borrower can avoid foreclosure by voluntarily transferring ownership of the property to the servicer and is relieved of paying the mortgage, provided the title is free and clear of mortgages, liens, and encumbrances. A servicer will consider a deed in lieu only after a borrower makes a good faith effort to sell the property and is not successful.

HAFA is available to economically distressed homeowners who:

1. Do not qualify for a trial mortgage modification under the Making Home Affordable Program;
2. Do not successfully complete the trial period for their modification;
3. Miss at least two consecutive payments during their modification period; or
4. Request a short sale or deed-in-lieu of foreclosure.

The HAFA Program will hopefully streamline the short sale process to make it easier for a homeowner to avoid foreclosure and achieve a short sale with their servicer. To date, short sales have been “long sales,” given the weeks and months that pass by while short sale purchase offers gather dust with servicers, waiting for approval.

For homeowners who are unable to keep up with their mortgage payments, or are in foreclosure, the HAFA program has awesome potential. The new guidelines should speed up the offer approval process and HAFA offers these distressed homeowners financial incentives to avoid foreclosure or bankruptcy. Both of these options are damaging to the homeowner’s credit rating for several years, and may be completely unnecessary if the homeowner can sell the home, get rid of the mortgage debt they owe, and transition to more affordable housing.

Homeowners eligible for HAFA enjoy the following benefits:
1. Having their mortgage servicer approve a short sale (Sale price is below amount owed on loan),
2. Having their mortgage servicer waive the right to recover the loan amount that is forgiven, and
3. Receiving up to $3,000 for relocation costs.

These are some GREAT incentives. For distressed homeowners who want to avoid foreclosure and need to leave their current home and transition to more affordable housing, the HAFA program is a great possiblity.