| St Louis Finance Professionals Say Short Sales Being Encouraged By HAFA |
| Articles - Mortgage |
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Not a day goes by where we don't read of new programs being instituted to help rid our economy of foreclosures and distressed properties.
Not a day goes by where we don't read of new programs being instituted to help rid our economy of foreclosures and distressed properties. Much to the chagrin of banks, short sales are getting more and more publicity and the financial blessings of being used to avoid foreclosure altogether. A short sale enables the homeowner to leave their home while not getting the devastating hit on their credit report compared to a foreclosure entry. Plus, the short sale can do much for the bank by helping them save money rather than going the more expensive route of foreclosure. Now this may seem to be a more preferable choice for bankers to readily embrace but the opposite has been true to the dismay of the St Louis lending community. There are a few perceived negative factors built into current short sales. First, they generally take longer to complete; that being on average two months longer. Another problem banks and lenders run into is that in many cases, there are other liens being held on a property which again can be costly. So, to counter this unwilling attitude, the National Association of Realtors have been lobbying the U.S. Treasury to do something that would create a catalyst of sort for encouraging more short sales. So, a new program came into existence on April 5, 2010 which came to be known as HAFA or the Home Affordable Foreclosures Alternatives. There are four main aspects to HAFA's terms for short sales: I. By holding parties to strict deadlines for various parts of the process II. Financial inducements - Incentives will include $3000 assistance for moving costs for homeowners; $1500 for mortgage servicers; and up to $2000 for mortgage security investors who give up to $6000 of the selling proceeds to other lien holders III. Allow current loan holders pre-approval for short sale terms before listing of any said properties IV. By requiring that homeowners be fully released from future liability for the first mortgage debt Under HAFA's new arrangement, banks and mortgage lenders must give a final decision on whether to accept or decline this short sale process within 10 business days At this moment, there are over 1.1 million homes that have been foreclosed upon according to housing statistics. And there are those who already predicted that both foreclosures and short sales will continue to rise. The Mortgage Bankers Association (MBA) said more than 9 percent of homeowners were behind at least one payment on their home loan in the fourth quarter of 2009. Other mortgage industry data companies place the figure closer to 4.8 million that are delinquent or may already be in the early stages of the foreclosure process. The sad thing is, HAFA will in no way be able to help such a staggering number of people who are now facing eventual foreclosure. All St Louis home mortgage companies who participated in the federal bailout program known as the Home Affordable Modification Program or HAMP must also make this new program available to consumers too. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Visit this website to learn more about a St Louis mortgage. Stop by Floyd J. Tapia's site where you can find out all about St Louis finance and what it can do for you. We invite you to call us at 877-334-0210 or 314-334-0210. |