Only time will tell..well the first part of the Making Home Affordable Short Sale Program was rolled out in April 2010. The HAFA program was initially thought to streamline the Short Sale Process while offering some substantial benefits to the homeowners, namely waiving the deficiency obligation to the homeowners. That benefit will eliminate most of the homeowners exposure and risk associated with completing a short sale….and that is really great news! This program will also give homeowners $3000 at Close of Escrow for Relocation Expenses. To streamline the process, the lien holder will, in advance of an offer, determine the Fair Market Value of the home. This enables the home to be marketed as a Pre-Approved Short Sale–shortening this lengthy process.
But…what is the catch, you ask. Well the program has very defined terms and conditions that Realtors and Borrowers must follow. Once a Value is determined, the bank will hold you to that number NO MATTER WHAT HAPPENS IN THE REAL ESTATE MARKET! They will also give you a FINAL NET AMOUNT, that the bank MUST receive.
Well at the end of the day while waiting for a buyer and a buyer who will stick it out, the market changes, the closing costs increase, taxes become due and the net to the bank changes. It then becomes almost impossible to give the bank the numbers they need to close. They will not deviate one cent from that number and someone is going to be forced to pay the difference.
At the end of the day, I am finding that this program is, like any other government program, bogged down in inefficiencies and paperwork. These transactions require some level of flexibility but the HAFA program does not afford us that. Is it really helping? No matter how many Gold Nuggets are dangled in front of a homeowner, if the Short Sale does not close, is it really a valuable program. The government and the banks are more concerned with making sure the paperwork is perfect, and the pennies add up and NOT concerned with actually helping the homeowners or working with the Realtors. I am in the trenches with this one…I will let you know how it plays out in the end.
PLEASE Share with me Your Personal Experiences.
Elise Fay, Realtor
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I would have to say that these government programs (HAFA/HAMP) are largely ineffective in helping home owners stay in their homes long term. HAMP’s numbers are horrific.
It’s too bad that with all the great intentions this program is like most government programs – a bust! If the government would just stay out of things and let us professionals in the trenches do our job while actually helping the homeowners that are in trouble, we would all be better off. Until then we are forced to muddle through this program – explaining and educating our clients and let them make the decision. To me it’s a no brainer – get and keep the government out of Real Estate. Let us do our job without their “help”! Thanks Elise.
This HAFA program is another waste of taxpayers time and money. If we all remember the first program to help solve the mortgage crisis was Oct 2008 with ex-President Bush signing in the FHA secure program to help refinance people that were behind in their mortage payments due to a hardship which has fallen way short, then HAMP, which is a joke, which has also fallen short now HAFA!?!?! I agree, if the inexperienced government workers would just stay out of the experienced real estate pros’ way we would be able to do our job instead of them trying to control too much of the process.