Short Sale Program (HAFA) Federal Regulated

The current Government Administration along with Fannie Mae and Freddie Mac have been doing all Short Sale Big Idea they can to help homeowners who have fallen behind in their mortgage to stay in their homes with the foreclosure bill. If you have fallen on difficult times and cannot afford your mortgage payment please visit www.makinghomeaffordable.gov and see if you qualify for a home modification loan. It will not take long to find out, and can be done easily by contacting your mortgage servicer. Try not to think of the mortgage company as the “enemy” because they really can help you if you are willing to work with them. Don’t assume that you won’t qualify, because many homeowners are taking advantage of this program to stay in their homes.

What is Home Affordable Modification Program?

Home Affordable Modification Program or (HAMP) is a loan modification process that provides eligible borrowers with sustainable monthly payments for their first lien mortgage loans. Homeowners who are having difficulty keeping up with their mortgage payments have the opportunity to apply for a modification on their loan and possibly reduce their mortgage payment to 31% of their monthly before tax income. If you would like to stay in your current home but cannot afford the payments please call your loan servicer and ask them about the Home Affordable Modification Program and apply for the modification.

What if I am not approved for modification?

If you are "not approved" for the mortgage modification you will have other options available to you. The government is enacting some guidelines for the mortgage companies to follow to help the selling process move quicker than it has in the past when homeowners owe more on the property than it is currently worth. A “short sale” may be done on these properties, where the lender agrees to discount the mortgage loan balance due from the borrower/homeowner. Typically, banks incur less financial loss than with foreclosure and it does less damage to a borrower’s credit than a foreclosure or deed-in-lieu of foreclosure.

What's new about "Short Sales" starting in April 2010?

So what’s new in April 2010 about the short sale process? The homeowner must first apply for a Home Affordable Modification Program, and if they are denied they may then sell the property by doing a “short sale”.

Here are some of the items in the Home Affordable Foreclosure Alternative (HAFA for short) “guidelines” for these short sales which the mortgage servicer must provide:

The property is to be listed with a licensed real estate professional that is regularly doing business in the community where the property is located.

The amount of closing costs or other expenses the servicer will permit to be deducted from the gross sale proceeds such as real estate taxes, attorney fees, real estate commissions, etc.

The amount of the real estate commission that may be paid, not to exceed 6% of the contract sales price, and notification if any portion of the commission must be paid to a contractor of the servicer that has been retained to assist the listing broker with the transaction.

Notice that the sale must represent an arm’s length transaction (a relative cannot buy your property) and that the purchaser may not sell (or “flip”) the property within 90 calendar days of closing.

An agreement that upon successful closing of a short sale acceptable to the servicer, the borrower will be released from all liability for repayment of the first mortgage debt. In other words, the servicer cannot come after the seller for the amount of the deficiency.

An agreement that upon successful closing of a short sale acceptable to the servicer the borrower will be entitled to a relocation incentive of $1,500.00 which will be deducted from the gross sale proceeds at closing. This will help homeowners to relocate and help with costs of moving and security deposits.

Notice that the servicer will allow a portion of gross sale proceeds to be paid to subordinate lien holders in exchange for release and full satisfaction of their liens.

Notice that a short sale may have income tax consequences and/or may have a derogatory impact on the borrower’s credit score and a recommendation that the borrower seek professional advice regarding these matters.

An agreement that so long as the borrower performs in accordance with the terms of the SSA, the servicer will not complete a foreclosure sale.

Each servicer must develop a written guideline to determine the minimum acceptable net that the investor will accept. This policy must be “consistently applied for all loans serviced for that investor”.

New Short Sale approval process

Within ten (10) business days of receipt of the Request for Approval of Short Sale (RASS) and all required attachments, the servicer must indicate its approval or disapproval of the proposed sale. Short Sale Approved The mortgage holder will have a Brokers Price Opinion (BPO) done on the property to determine what the property is worth by using comparable sales in the area. This will help them come up with a minimum amount to accept when agreeing to or approving the short sale.

The servicer must approve a RASS if the net sale proceeds available for payment to the servicer equal or exceed the minimum net determined by the servicer prior to the execution or extension of the SSA and all other sales terms and conditions in the SSA have been met. Additionally, the servicer may not require, as a condition of approving a short sale, a reduction in the real estate commission below the commission stated in the SSA.

Because of these guidelines homeowners who cannot keep up with their mortgage payments will have the opportunity to move on with their life without having to let their house go to foreclosure. If you are ready to start the process of moving on please visit www.makinghomeaffordable.gov and make the first step towards finding out if you qualify for a loan modification.

Many homeowners will qualify for modification

Please don’t assume that you won’t qualify; many homeowners will qualify and can stay in their home, which is the best solution all around. If, however, you do not qualify, please return to our website and request a current market evaluation to see what your property is worth or call our office at 815-669-4944 and speak to one of our agents. We are here to help with all of your housing needs, not just buying and selling.

I applied and I do not qualify for (HAMP) Loan Modification

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Foreclosures

We can also negotiate short sales with your lender and can give you helpful information about the current Home Saver Program the Obama Administration is offering at this time.

If you are looking to purchase foreclosed homes or properties we can assist you in finding that right home or real estate.

Home Buyer Credit

Now is time to buy a home this is a once in a lifetime opportunity to get good interest rate, First Time Home Buyer Credit up $8,000.00 not to mentions home prices are very reasonable at this point in time. It is actually the perfect storm to buy a home. My name is Carolyn Kropp, I am a Real Estate Broker in Johnsburg, IL and I can assist you in all your buying or selling of your home, house, land, and real estate needs in Lake County & Mchenry County, Illinois.

Please give us a call anytime at (815) 669 4944.