Are HAFA Short Sales Working? | Short Sale Distressed Property Designation

Submitted by Tim Harris on January 5, 2011 – 12:40 pm

Why are some HAFA Short Sales working…while others aren’t?
Read on….
According to the Congressional Oversight Panel (the Troubled Asset Relief Program watchdog) thus far  only $4.3 million  has been used for  HAFA..resulting in roughly 661 closed HAFA short sales since the program launched.
(Download the latest HAFA forms here)
Thats it…661 short sales have been approved as HAFA Short Sales.
Pathetic results, I am sure you agree.
The Treasury department is changing the HAFA eligibility requirements which may allow for a significant increase in HAFA Short Sales.
Details:
1)  HAFA is now almost..a NO DOC short sale. Servicers are no longer required to verify a borrower’s financial information or determine if the borrower’s total monthly mortgage payment exceeds a 31% debt-to-income ratio. It seems that Treasury has wised up to the fact that it makes no sense to give a hoot about someones income to debt ratios when they are….selling the house.
“While this requirement has set the standard for mortgage affordability under HAMP, it is not as important for homeowners ready to transition out of their home,” a Treasury official said. “Eliminating this requirement further streamlines the process for homeowners applying to the program.”
2) Servicers still must obtain a signed hardship affidavit. So, even though short selling owners no longer have to prove their financial hardship…they must sign an affidavit stating they have a hardship. I am no legal eagle but, doesn’t this hardship affidavit sound utterly pointless?
3) Seconds now receive a max of $6,000. In other words, HAFA pays seconds up to $6000 to accept the short sale. I am assuming that the original HAFA rules still apply that the seconds (and firsts) can’t pursue any recourse if they accept HAFA money.
SIDE NOTE: In a recent interview with a Bank of America executive, I asked him point blank if he knew of ANY investors pursuing deficiency judgements. He said…none. Additionally, he said none of the 500 (ish) investors that BoA servicers NONE are pursuing DJs. Its realistic to believe that DJs will remain a rare event for residential short sales.
4) Borrowers must receive a HAFA Short Sale agreement within 30 days of submitting paperwork.
So, what do you think….will these changes make a difference. Lets be honest…with fewer than 700 approved short sales these changes can only help!
Lisa Ekanger Your Hometown Realtor!

Buying a home now is a no-brainer!

By Ali Velshi, CNN chief business correspondentDecember 13, 2010: 9:26 AM ET

(MONEY Magazine) --

Is now the right time to invest in a house?
Trick question. Actually, it's two questions.

Question No. 1: Is now the time to buy?
Question No. 2: Is buying a house a good investment?

The first answer is easy: With a few exceptions, if you have 20% to put down and good credit, now is a great time to buy. That's been the case all year, and I'd argue that we're probably closer to the end than to the beginning of the really great time. Let me explain.
Back in January home prices had dropped 28% from their peak. More important, interest rates were at historical lows. By locking in a mortgage for 15 or 30 years on a value-priced home, you were getting an incredible deal, even if home prices decreased. (I took my advice and bought a New York City apartment.)

 

Most (and least) affordable cities to buy a home

At the time, I thought that prices and rates were more likely to rise than fall. I was half right: Home values have been inching up since the spring, but mortgage rates, incredibly, dropped further.
By August (the latest numbers available) the median home price had risen 1% over a year ago, but 30-year rates had dropped a half-point to 4.5%. Assuming 20% down and a 30-year mortgage, the total cost of owning a median-priced home is now down $16,000 from a year ago.
Home values may waffle over the coming year, but because Americans take out such large, long mortgages, rates are what really matter. And I am more likely to grow hair than see 30-year mortgage rates drop below 4%. It's far more likely that rates (and the cost of ownership) will rise.
Now for question No. 2: Is a house a good investment?

 

CALCULATOR: How much home can you afford?

First, it depends on what you mean by investment. If your definition is strictly about dollars returned, a house probably won't be a great use of your capital. If you bought the median-priced house today with 20% down, to recoup your total costs (and I'm not including property taxes and maintenance here) over three decades, the home's value would have to rise about 3% a year.
That's likely, but you'll almost certainly (we all hope) do much better than that in the stock market. The fact is, however, that that's the normal case for housing; the booms that began after World War II and in the late 1990s were the exceptions.

Of course, there are places where you might do better. I bought my condo in Manhattan, a small island that, by virtue of the business done on it, has a sustained demand for property. And smaller, energy-efficient housing in cities or inner suburbs around San Francisco or Chicago is likely to be in higher demand than big, outer suburban homes with long commutes to Las Vegas or Atlanta.

According to urban and environmental planning professor William Lucy of the University of Virginia, this move toward urbanization in American housing is the reversal of a trend that's been in place since 1945. Keep it in mind when making your buying decisions.

That said, the key point to remember is this: Buying a fairly priced home at today's rates may be the best deal you will ever get. And who knows? It may even turn out to be a good investment

Lisa Ekanger Your Hometown Realtor!

Everyday Creativity

9 Key Concepts:

~ Creativity is the ability to look at the ordinary and see the extraordinary
~ Every act can be a creative one
~ Creativity is a matter of perspective
~ There's always more than one right answer
~ Reframe problems into opportunities
~ Dont be afraid to make mistakes
~ Break the pattern
~ Train your technique
~ You've got to really care

Lisa Ekanger Your Hometown Realtor!