Why HAFA is “NOT GOOD” for homeowners
This is a post from a fellow colleague, Garbriel Trujillo @ www.homesolutions.here.ws
It’s a good summary of why HAFA IS NOT GOOD for homeowners versus what it is being touted to be to Real Estate Agents and the general public.
Another colleague, Ted Akers @ www.investorfundingsite.com says:
“it designed to get the homeowner out of the property and back in the banks hands faster. The homeowner is better off not opting-in to HAFA and pursuing standard short sale processing.”
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On April 4, 2010 the United States federal government began implementation of the “Home Affordable Foreclosure Alternatives” (HAFA) program. This was promoted by the Obama Administration as a way to encourage short sales. In reality, it will not be effective and it’s usually worse for a homeowner who is facing a signficant hardship when compared to a traditional short sale. As one sees below, it is more beneficial for the bank than for the homeowner. A few key reasons are:
1. Homeowners who likely were not making payments due to hardship must pay 31% of their gross income to participate in the program or agree to give their property to the bank by a ”deed in lieu” of foreclosure.
2. The bank determines the sales price. Neither the homeowner nor their broker have any control or influence over pricing.
3. The bank can force a deed in lieu if the property does not sell at IT’s price in 120 days, even if the property is not in foreclosure.
4. Even if the program was good, it covers very few loans: not Fannie Mae, Freddie Mac, FHA and VA loans.
5. It only affect a first mortgage/deed of trust. The homeowner is responsible for negotiation of their own junior liens (if any) for a maximum payment of $3,000 for ALL liens.
The homeowners’ benefit is a $1,500 incentive payment IF the sale closes. This presumably helps with moving costs.
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If you’d like to discuss your personal situation to learn what options are available to you, give me a call at 702-204-3945 or you can contact me via email kenny@tfmcpartners.com or by leaving a comment below.
Kindest Regards,
Kenny Wagner
The Foreclosure Mitigation Company
P: 702-204-3945
