Effective today, there are some pretty major changes to the short sale program, HAFA (Home Affordable Foreclosure Alternative). This program has evolved and now it’s gotten even better. Here are some of the ways you’ll find even more reasons to apply for a HAFA short sale.
Many people are starting to think a little harder at a short sale as an option as the end of the year looms near. This is because as of this date, both the state and federal income tax protections for owner occupant short selling borrowers will expire. We hope it will be extended, and we continue to keep watch.
Below you’ll find the current directive and then information on the past information:
HAFA short sale program is extended through December 31, 2013
Was only through December 31, 2012
Occupancy Requirements have been expanded to include second homes, and rentals/investment homes (but owner can not have purchased a property in the previous 12 months).
HAFA required the property to be occupied as a primary residence during the prior 12 month period.
Relocation Allowance is still $3,000 to the owner OR the tenant if the property is tenant occupied.
There was no previous help for owners of investment property or help for tenants – this is all new – good news!
Junior lienholders may receive up to $8,500.
Currently, junior lienholders were capped out at $6,000 (or 6% of balance whichever was less).
Income requirements can now exceed 31% of income. The borrower may stay current on their loan (subject to investor guidelines).
HAFA guidelines had stated mortgage payments should not exceed 31% of gross monthly income.
Credit reporting may show a “paid or closed account/zero balance,” or “paid in full/foreclosure started” whichever is applicable. (will likely still note “paid less than full balance)
This was a very grey area and no guidelines or consistency across the board was seen.
For more information about HAFA Short Sales in Contra Costa or your Walnut Creek, Concord, Clayton or Pleasant Hill short sale, call Catherine Myers. You can also find more information at the government sponsored site Making Home Affordable – Exit Gracefully
For those that want it ALL, here is the HAMP Administration Directive 12-03 describing the above: HAMP Admin Directive
Walnut Creek short sales | Concord short sales | Pleasant Hill short sales | Clayton short sales | Martinez short sales
Real Estate Broker
Short Sale Specialist (SFR)