HAFA is an alternative to Foreclosure

What you dont know could hurt you

Are you in jeopardy of foreclosure? Or are you considering a short sale of your home and looking at your options? If so, you may want to learn about the Home Affordable Foreclosure Alternative (HAFA) program. This program is not for everyone, but it is worth exploring to see if you qualify because HAFA may be a viable alternative to foreclosure.

Never heard of HAFA? Well you are not alone. Most sellers and many real estate agents are not aware of the benefits of this program or that it even exists. The HAFA program is sponsored by the United States Treasury and has the goal of helping borrowers find alternative ways to avoid foreclosure. This program is available at no cost to borrowers. It is not necessary to pay someone a fee to process your HAFA application. However, this is not something that you should try to take on yourself; it is recommended you seek professional assistance.

There are many advantages of a HAFA short sale. One major difference between a traditional short sale and a HAFA short sale is the deficiency on the first lien. Just recently, there has been much discussion about lenders looking to borrowers for the deficiency of what they owed and what their home sold for in the short sale. This is avoided in a HAFA short sale; the deficiencies are forgiven on the first lien, possibly the second, and there are no promissory notes. This is a real benefit to the HAFA Seller.

Another big difference between a traditional short sale and a HAFA short sale is how the price is established on a home. In a traditional short sale, the homeowners and their Realtor® will establish a selling price for the home based upon market conditions. In most cases, this price has not been approved by the lender, which could mean excessive delays when the buyer makes an offer on the home. Often times the lender will want more because they are looking at market conditions through a different set of eyes.

The HAFA short sale process is much different. The home is not placed on the market until the seller is approved for the HAFA program. Once the seller is approved, the lender will establish the selling price of the home based on real-time market conditions. Once this price is established, the home is marketed at the pre-determined listing price. If the home is sold at this price, the lender will generally accept the offer within thirty days.

The HAFA program also offers other provisions and incentives for the service providers and the homeowner, such as a relocation incentive up to $3,000 for the buyers. While participation in HAFA cannot prevent the homeowners from losing their property, it can eliminate the effects of a foreclosure on the homeowner’s credit.

Again it is recommended you obtain professional assistance. You can get assistance without paying a fee by using a HAFA Certified Realtor®. The Realtor® will earn a listing fee and this fee, in most cases, is set by the lender handling the HAFA short sale. The brokerage fees are paid from the proceeds of the sale and not from the homeowner's pocket. In a HAFA sales transaction, all proceeds will be used to pay the fees, closing costs, and pay off the debt on the home.

Be sure you find a HAFA Certified Realtor® with experience in HAFA short sales and have him or her represent you in the HAFA process. Ask your Realtor® if they know about the HAFA program and if they are HAFA certified. Furthermore, you should ask your Realtor® how they handle the paperwork and communicate with the bank. It is extremely important that you have a qualified representative working on your behalf and aggressively communicating with the lender.

With any short sale, you should always consult your tax advisor and attorney to determine what options will meet your specific needs. Not all banks participate in the HAFA short sale; however, many banks are starting to streamline their short sale process to get more short sales completed and closed. These programs are called cooperative short sale programs, and some have benefits similar to HAFA. Cathy Mann-Seiple is a HAFA Certified Specialist and works for Fidelity National Title. Cathy has had the opportunity to see the results of short sales firsthand and noted, "The cooperative short sale approach minimizes many of the challenges experienced in a traditional short sale, and like HAFA, may provide for relocation assistance for the owner. I continue to see success with these short sale programs. These programs are designed to speed up the short sale process and help distressed homeowners in these trying times. If you are considering a short sale, it is critical that you work with a Realtor® that is well versed in short sales and is HAFA certified. The Shane ‘Waterfront’ Wilson Team at Real Living Cypress Realty does an exceptional job representing short sale clients."

The Shane “Waterfront” Wilson Team has made the commitment to stay informed about the HAFA program. Their team of Shane Wilson, Jerry Webb, Linda Davis, and Carrie Friedel all are HAFA certified. They get weekly updates on the HAFA program and work hard as an advocate for their clients. They focus on the needs of the sellers. They take the time to explain the options of a short sale and the process to determine whether a seller qualifies for a HAFA short sale. Their team assists sellers with completion of all the necessary forms and answers their questions. The Shane Wilson Team submits all the paperwork to the lender and communicates with the lender on the seller's behalf with the seller’s written permission.

Client Care Manager, Carrie Friedel, is a HAFA Certified Realtor®. Carrie works daily with various lenders on behalf of short sale clients. This hands-on involvement with the lenders has afforded many sellers success with closing HAFA short sale transactions. Carrie is on the phone
four to six hours a day with lenders acting as an advocate for sellers and is successful at what she does. The Shane "Waterfront" Wilson Team's number one priority is their client's best interest. Many lenders do not understand the rules of the HAFA program nor do the sellers. This is where it is extremely important to have someone who understands the HAFA process acting on your behalf. The Shane “Waterfront” Wilson team gets results. As testament to this, it had 100% of its HAFA short sales approved in 2011.

Owing more on your home than it is worth is difficult for any homeowner. Trying to make a decision on what to do can be even more trying. "Do you try a traditional short sale? Could you qualify for HAFA? Or, do you just let the bank foreclose?" These are questions many homeowners are asking themselves every day and are questions that you cannot and should not answer alone. You need professional assistance, and you need someone that is well versed in the HAFA short sale process. None of these choices is a great option for a homeowner, but the HAFA program may be the best of the three and will do the least damage to your credit.

The information in this article was submitted by Jerry Webb, Realtor® who works with the Shane "Waterfront" Wilson Team at Real Living Cypress Realty.

Jerry Webb, Realtor®

Real Living Cypress Realty 7270-4 College Parkway Fort Myers, Florida 33907

Cell: (239) 240-5400           Work: (239) 275-3321        Fax: (239) 275-4912

E-Mail: jwebb@cypressrealty.com

www.jerrywaterfrontwebb.com