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Category Archives: Short Sale Info
HAFA Who? The Year of the Short Sale
On Thursday, I listened in on Distressed Property Institute co-founder Alex Charfen’s monthly phone call with his CDPE (Certified Distressed Property Expert) constituency. The topic of conversation: HAFA (Home Affordable Foreclosure Alternative), the Obama Administration’s latest housing-related initiative, which is set to launch on April 5.
One comment that caught my attention right off the bat: Charfen said 2010 is being hailed as “the year of the short sale.” Not just because of the extensive short-sale inventory currently on the market all across the country. And not just because distressed properties will continue to be a significant segment of the real estate market for the foreseeable future.
What should 2010 apart is that it is the year in which short sales got easier.
Let’s hope so.
Because, for many people who have experienced a short-sale firsthand during this recession — whether as a buyer, seller, real estate agent or mortgage broker — it has been a challenging, often infuriating, even impossible, process. Without an industry-wide standard for handling these complex transactions, lenders have been left to deal with the onslaught of requested short-sale approvals however they see fit. Some have been more successful than others at working their way through their short-sale inventory. Many have failed miserably.
Enter HAFA. An extension of HAMP (the underwhelming Home Affordable Modification Program), HAFA was designed to simplify and streamline the short-sale process. Unfortunately, the “streamlining” took the form of 43 pages of governmental guidelines (sigh). Basically, most homeowners struggling to pay the mortgage on a principal residence purchased before Jan. 1, 2009, are eligible, including borrowers who were eligible for HAMP but weren’t successful in securing a loan modification (i.e., just about everyone who applied).
HAFA is far from perfect. It’s voluntary, for one thing, and it applies only to non-Government Sponsored Enterprise mortgages, which means it doesn’t apply to loans owned or guaranteed with Fannie Mae or Freddie Mac — i.e., the majority of home loans today. Plus, participating mortgage servicers and investors write their own guidelines based on the Federal requirements and determine themselves how to implement the program. Continue reading
Posted in For Buyers, For Sellers, Homeowner Tips, Short Sale Info
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Brain on Overload: Classes, Classes and More Classes (guess the topic)
In the past couple of weeks, I’ve attended several really good classes, two of which addressed different aspects of the foreclosure market.
At the first class, Jim Long, Bend’s Affordable Housing Manager, discussed a new loan program available in Central Oregon for residents with moderate income who purchase bank-owned homes.
As part of phase two of HUD’s Neighborhood Stabilization Program (also know as NSP-2), qualified buyers may receive a zero-interest, deferred-payment loan of up to 20 percent of the purchase price (or a maximum of $35,000). Those funds can be used to help with a down payment, mortgage buy-down or closing costs, or may go toward completion of an unfinished home. Only owner-occupied purchases are eligible. Bend has been allocated $2.1 million in funding (not all of which will be available to residents.)
Long said the funds are expected to be available by the end of April, and will be distributed throughout Deschutes, Crook and Jefferson counties on a first-come/first-served basis. Another important caveat, he added: if you’re considering seeking these funds, you must fill out the application before an offer is written. One other thing to keep in mind: It’s a federal program, with the requisite red tape involved, so patience and persistence are recommended. So, for example, the closing might take longer and there are a few additional hoops to jump through (a HUD-designated home inspector, for example).
But what a great coup for Central Oregon! (By the way, Oregon’s application to receive the NSP-2 grant money was one of only 56 of the 480 applications that were approved — and the only award in the Northwest United States.)
To find out more about the program or to request an application, contact Jim Long at 541-312-4915 or jlong@ci.bend.or.us.
ANOTHER INFORMATIVE SESSION
The second foreclosure-related class addressed the legal, tax and credit implications of short sales and foreclosures. For that one, several hundred agents filled the Westside Church in Bend to hear panel members Larry Wallace (of True North Mortgage), attorney Tami MacLeod (of Karnopp Peterson) and CPA Stephen Greer (of Greer Mahr & Associates).
Hosted by Western Title, the class was a rousing two hours packed with info (actually, the Q&A ran long after the appointed cut-off time). Among the topics: recent legislative changes to Oregon’s anti-deficiency laws, new rules regarding tenant’s rights on foreclosed homes, and the impact of mortgage insurance on distressed-property sales.
Best of all, the whole thing was videotaped and will be posted on the Western Title’s website in the near future. A great resource for consumers and agents alike.
The First-time Home Buyer-Distressed Property Paradox
Lately, I’ve been thinking a lot about first-time homebuyers. (What with all the industry and media attention focused on the impending deadline of the First time Homebuyer Tax Credit, it’s hard not to.) First-time buyers are the ones who, even … Continue reading
