HAFA short sales are difficult..but what Short Sales are not?? The Government backed Short Sale program nicknamed “HAFA” is an arm of the Loan Modification program. Most HAFA spprovals come AFTER a homeowner has already applied for (and been turned down for), a loan modification. Most Loan Mods are either denied by the Lenders or turned down by the Borrowers once they see the terms.
HAFA is an alternative. It is for primary residences. The program no longer uses an income % to qualify Borrowers, but you do need a true Hardship. This can be Lower Income, Loss of Job, Relocation due to job search, Death in the Family, Divorce, Hospital Bills..many things qualify as hardship.
Think about it..if your life has become harder due to a calamity that has occured, that will probably qualify you. The incentive in the HAFA program is that the Lenders receive a small payout to accept the Short Sale, and the secondary lienholders are guaranteed a % to release their lien..up to $6,000. BOTH lienholders release their right to pursue the Borrower for deficiencies. In California, that now matches what happens when a Borrower Forecloses.
For Borrowers..HAFA provides $3,000 to them upon the Close of Escrow as a “relocation fee’..and that is exactly what it usually is used for. In this situation, my Listing was a Condo in the lovely Indian Creek Villas of South Palm Desert. Great development with low HOA’s, located just up Hwy 74 from our beautiful El Paseo shopping district and beautifully maintained.
Loan Value: Approx. $193,000 Approved Sale Price: $58,500. Hard to believe! The Buyers are moving in with a conventional loan, so NOT investors, which helps with a HAFA approval.
HAFA short sales can be approved..once again, it is all about the experience of your Listing Agent. Choose wisely!