There has been a lot of talk about HAFA, Home Affordable Foreclosure Alternatives Program (HAFA). For those who don't know, HAFA, is a government program touting to reform short sales, making them more streamline and doable. In truth it is government Koolaid at its finest.
Personally, I had high hopes for this bit of policy until the reality of it came to light. It is so full of loopholes, opt-outs and poor thinking that it would be funny if it didn't give false hope to so many who need the real thing. Let's look at some of the BIg Problems as I see them.
- The guidelines are simply that, guidelines. It is not law, only a suggestion on how banks and loan servicers should handle short sale applications. Since it is not law, there is no requirement to play. Gutless and non enforceable language is how I see it.
- Homeowners have to attempt a loan modification and be denied before the guidelines can kick in. This is a real BIG problem as loan mods are expensive, time consuming, frustrating and seldom granted. According to one expert, most people can't afford a loan modification and when denied are days or weeks away from foreclosure.
- The guidelines have little if any upside to the banks, lenders and investors. Since it is an opt-in program, they have little motivation to participate. I don't know about you, but I haven't seen too many articles touting the compassionate nature of the banking industry. To the contrary, they are generally bottom liners and the HAFA guidelines do not favor their bottom line.
Our advise, as short sale knowledgeable real estate guys, is to work with an attorney who really knows short sales and a realtor with a lot of knowledge. We believe you should have your attorney help you submit your short sale package to the lender and handle all conversations. NOTE: Make sure the firm you hire has a dedicated short sale division and a strong track record. Short sales are not for the inexperienced or weak at heart. They demand a lot of knowledge and skill sets many do not possess.
If you want to learn more about short sales, we have a web site dedicated to short sales, www.short-sale-phoenix.com, that includes a FAQ section, numerous articles and referrals to qualified legal counsel who can help negotiate your short sale.
That concludes this rant about short sales. Hope it helps and please, please don't drink the government koolaid on this one. It may help some senators and congress people get votes, but it is unlikely to help get your short sale done.
Gene Urban
The Urban Team at Realty Executives
602-234-5777
www.UrbanTeamAZ.com
www.Short-Sale-Phoenix.com
www.UrbanConnectionRealty.com