Certain Banks are now eligible to provide HAFA short sale plans to borrowers. Essentially this is an attempt by the Feds to make short sales a more organized and fair process for the primary homeowner who, for whatever reason, finds themselves having to sell in a short sale scenario.
In order to qualify you must meet these guidelines:
The property is the borrower’s principal residence;
The mortgage loan is a first lien mortgage originated on or before January 1, 2009;
The mortgage is delinquent or default is reasonably foreseeable;
The current unpaid principal balance is equal to or less than $729,7501;
The borrower’s total monthly mortgage payment (as defined in Supplemental Directive 09-01) exceeds 31 percent of the borrower’s gross income.
You will be hearing lots about this new program and confusion is bound to exist as the program get up and running and Realtors, lenders and the general public start to digest the complexities of the program.
Two advantages I see right away are the release of liability on the forgivben debt. In other words no tax bill coming on the difference between what you borrow ed and what the bank was paid off.
And homeowners who move throught he program will then be eligible for up to $3,000 relocation money.
A disadvantage I see is that you have to try a loan modification first through the HAMPA plan. This is another Federal program designed to try and modify your loan and keep you in the home. The biggest problem with these is that the debt is just shifted around and not forgiven or removed. This does not solve the issues for most homeowners.