US Treasury Plan to Streamline and Simplify Short Sales

 

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RE/MAX and the New HAFA Short Sale Plan

RE/MAX CEO Margaret Kelly explains how homeowners can avoid foreclosure with the newly announced government Short Sale plan, HAFA, that went into effect April 5, 2010. New guidelines include $3,000 for moving expenses to homeowners who complete a Short Sale or agree to turn over the deed of the property to the lender. HAFA is designed for homeowners who are in financial trouble but don't qualify for the Administration's loan modification program.

 

The U.S. Treasury plan to help homeowners avoid foreclosure is many-faceted. The plan was announced in November 2009 and officially went into effect in April 2010:

Incentives to Borrowers
Under the plan, borrowers who complete a Short Sale are released from their primary mortgage debt. Additionally, they receive $3,000 for moving expenses.

Incentives for Lenders
The plan provides for payments of $1,500 to mortgage servicers and investors for completing a Short Sale - or a deed-in-lieu transaction, in which the deed is simply turned over to the lender.

Standardized Documentation
The program has published streamlined and standardized documentation for Short Sales, including a Short Sale Agreement and Offer Acceptance Letter. Creating one standard set of documents minimizes the complexity of Short Sales, which should significantly increase use of the option.

Payments Capped to Subordinate Lien-Holders
In the past, some holders of second mortgages have blocked Short Sales by seeking steep payment in exchange for releasing their claim. Under the new plan, participating subordinate lien-holders as a group can receive no more than $6,000 from proceeds of the sale.

Time Limits for Short Sales
Lenders have only 10 days to approve or reject a Short Sale - a significant step, since the process often takes so long to complete that numerous transaction fall through. Borrowers are allowed at least 90 days to market and sell their home, with the possibility of additional time based on local market conditions. Marketing can run at the same time as the foreclosure process, but no foreclosure can take place during the marketing period as long as the borrower is acting in good faith to sell the proper.

RE/MAX has been training its agents to help homeowners avoid foreclosure by offering courses on Short Sales. More than 15,000 RE/MAX Affiliates hold either the Certified Distressed Properties Expert or Short Sales & Foreclosure Resource designations. Many other RE/MAX Associates have extensive experience with foreclosures and pre-foreclosures.

If you've fallen behind on your mortgage payments or received a pre-foreclosure letter from your lender, a RE/MAX Allegiance Associate can help.

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