New Government Short-Sale Guidelines (HAFA) - Don’t Believe the Hype
February 4, 2010 by Danilo Bogdanovic
Filed under Lending/Mortgages, Short-Sales and Distressed Properties
The Treasury Department released a 43-page document in November 2009 that outlines a proposal for streamlining short-sales across the banking industry. It’s supposed to go into effect April 5, 2010. This document is being talked about as if it were the answer to all of America’s short-sale problems. The National Association of REALTORS(R) has been celebrating since the announcement and REALTORS(R) all over are being trained that this document will solve all of our problems and that the banks will be so much more pleasant to deal with.
Well, that sounds all nice and dandy…but is it more hype than help?
Rather than me breaking down and analyzing the document and its true effect on short-sales and the real estate market, I’m going to point you over to a series of excellent blog posts on this topic that have already been written by a fellow REALTOR(R) and friend of mine.
As Sarah Stelmok puts it so eloquently,
REALTORS(R) all over are being trained that this document will be the savior of the real estate market and that the banks are going to start playing nice, and rainbows and kittens will fall from the sky, and we will all reap riches from the bounty of this document. I hate to be a Debbie-Downer, but when’s the last time our government proposed guidelines that were actually effective when it came to the banking industry. Ahhhh, that’s right, after the S&L scandals. Didn’t that take years to recover from? Well, it will take years to recover from predatory lending and a pretty little 43-page document can not fix 7 years of bad lending decisions.
So, let’s dissect the document so that a layman can understand what it says…
Sarah’s three-part series on this topic is excellent and funny and you should definitely take the time to check it out whether you’re a home owner considering a short-sale or a REALTOR(R) (if you’re a home owner considering a short-sale, click here to contact me so we can discuss your specific situation and options).
- Part One - Proposed Short-Sale Guidelines (HAFA)
- Part Two - Proposed Short-Sale Guidelines (HAFA)
- Part Three - Proposed Short-Sale Guidelines (HAFA)
If you would like more information about the proposed guidelines or are thinking about doing a short-sale yourself and are located in Northern Virginia, click here to email me or call me on my cell - 703.582.6900. If you’re located in the Fredericksburg, VA area, click here to contact Sarah Stelmok, REALTOR(R), Coldwell Banker Elite.
P.S. If you can name the most popular person in the group pictured in the photo at the top of this post and the year the song came out, you get a prize!
I think this program is worth a try. As a 17yr REO agent, the current program is not working. My listings are siting vacant and being vandalized -not to mention hurting the neighborhood. What I didnt like about the Short Sale process in the past is the lack of communication from the lender, all the paper work and then to top it off they try to take our commission at the last minute. With HAFA home owners can stay in there property while it is up for sale. They may also get up to $1500 at closing to help them with moving costs. I think homeowners are going to benefit from this program - I just hope the Lenders/servicers can be efficeint with the short sale process.
Lori - HAFA may make things better a little better, but it’s still far from what really needs to happen to solve the issues we’re having. Getting the short-sale pre-approved before it goes on the market is what is necessary. Only one bank/servicer has taken this route - I wish they all would for the sake of everyone.