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SHORT
SALE |
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Short
Sale is a sale in which the proceeds from
the sale is less than the mortgage balance. The lender
agrees to discount a loan balance due to financial
hardship on the part of the borrower. Homeowners can
request their lenders for a regular
Short Sale, or apply for a HAFA
Short Sale (Home Affordable Foreclosure Alternatives)
if their lenders participate
in this program.
The
Home Affordable Foreclosure Alternatives (HAFA)
Program provides alternative way to avoid costly
foreclosures and offers incentives to borrowers
and lenders in a Short Sale
or Deed-In-Lieu (transfer title to the current lender).HAFA
simplifies and streamlines the short sale process
by providing a standard process flow, minimum performance
timeframes and standard documentation.
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HAFA
Short Sale .vs. Regular Short Sale
Because
of the incentives and liability protection, HAFA
becomes a preferred program for homeowners who want
to sell their home as a "short sale".
Below is a comparasion table. |
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HAFA
SHORT SALE |
REGULAR
SHORT SALE |
| Cash
to homeowners |
$3000
for homeowner relocation assistance |
No cash allowed |
| Cash
to assist Short Sale Process |
$1500
for processing cost |
None |
| Homeowner
Cash Contribution to the Short Sale requested
by your lender |
Not
allowed |
Up
to thousand dollars |
| Cash
to pay your subordinate loan |
Up
to a $2000 match for the 1st lender. |
Your
first lender is the only source to pay. |
| Deficiency
Judgment |
Fully released from future liability for all
mortgage debt |
Must
negotiate to get liability release. |
| Credit
Report |
Settled
for less than full payment |
Depend
on negotiation |
| Tax |
You
may have to report the forgiven amount as income.
Certain exceptions apply such as bankruptcy,
insolvency, non-recourse loans, qualified principal
resident indebtedness |
You
may have to report the forgiven amount as income.
Certain exceptions apply such as bankruptcy,
insolvency, non-recourse loans, qualified principal
resident indebtedness. |
| Time
Line and Forms |
Regulated
by HAFA |
Lender
control |
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HAFA Eligibility
- Your
mortgage lenders participate in the HAFA program
- Your
property must be the homeowner's primary resident
- The
first loan on the home must be before January
1, 2009
- Home
Owner must provide finacially hardship document
- The
current loan balance may be not more than $729,750
(1 unit dwelling)
- The
total monthly payment must exceed 31% of gross
income
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HAFA
Application
- Your
lenders must participate in Home Affordable
Modification Program (HAMP). Check
here
- Apply
for HAMP program. Once your application for HAMP
is declined, you are automatically switched to
HAFA
- After
being approved with HAFA, you can start your short
sale process
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Real
Estate & Insurance Services 
