Short Sales Just Got a Little Bit Easier

Effective February 1, new guidelines for the government’s HAFA program (a/k/a HAFA II) should make short sales less difficult.  The changes to the program are designed to help expedite the process by removing some of the hurdles that existed.

Among the more notable changes to the program are:

- The time frame for making a decision on a complete short sale offer package has been reduced from 45 days down to 30.

- Resale prohibitions have been relaxed.  Previously, a home sold via short sale couldn't be sold for 90 days.  Now the hold period is only 30 days, or 90 days if the sales price is greater than 120% of the short sale price.  However, deed restrictions are required by many banks to confirm the resale  terms.

- The Government Subsidized Entities (GSEs such as FannieMae, FreddieMac, etc., commonly referred to as mortgage investors), have aligned their programs and formalized a number of items, including the encouragement of pre-approved sales, defined timelines, and the release of liability for borrowers with a hardship and relocation assistance.

-A simple FannieMae form confirming waiver of deficiency will be in place rather than language buried in an approval letter for FNMA backed short sales.

- GSE pre-determined hardship standard (90+ days delinquent and a FICO score below 620) are being adopted across the board, and borrowers with this status can simply sign their hardship affidavit at closing.

These changes and more promise to help accelerate the number of short sales approved in 2013, so make sure you are prepared to participate.  If you have ANY questions, contact Certified Distressed Property Expert- Victoria Clare at shortsales@srt-law.com

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