Every short sale investor has a specialty – that particular type of deal that they do better than any other. In many cases, the success of a deal can hinge on how familiar you are with the type of negotiations that go along with it. If you are just getting started in the short sale business, you may want to focus on a type of property or transaction that is easy to find right now, in today’s market, in order to maximize your ability to find and do deals.
One way to maximize your opportunities is to familiarize yourself with the HAFA process. HAFA stands for Home Affordable Foreclosure Alternatives, and it is the federal program that the government has designed to help homeowners who cannot keep their homes avoid foreclosures. This program is mandatory in many cases – particularly if a home is owner-occupied – so being familiar with the process, which is still relatively new, can give you a huge advantage in the short sale process.
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There are millions of homeowners facing the possibility of foreclosure. Some meet the numerous requirements to qualify for assistance under the Obama Mortgage Modification Plan. But many others are forced to go through the foreclosure process.
Homeowners have several strategies for avoiding foreclosure at their disposal. But it is essential that they first understand the foreclosure process and the laws governing it. Foreclosure laws vary from state to state.
The process is different for each homeowner, based on factors like state of residence, lender, and mortgage type, among others. Although these different factors can help a homeowner extend the foreclosure deadline by varying degrees, the basic steps apply to everyone. To help you better understand how the foreclosure process works, I have listed the following basic steps:
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The number of US homes lost to foreclosure could pass the one million mark, if the pace of the first six months of the year is any indication. Just under 528,000 homeowners fell victim to foreclosure through June, a pace that is well ahead of the foreclosure record of just over 900,000 set just last year. Indicative of the worst US housing crisis in history, the numbers dwarf the usual average of foreclosures per year: just over 100,000.
The pace of homeowners receiving foreclosure notices has slowed in the last several months as banks offer leniency to delinquent homeowners in an effort to stem the tide of foreclosed properties on the market. But lenders have also picked up the pace of repossessions in an effort to decrease their backlogs of distressed properties on their books.
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The US Treasury Department created the Home Affordable Foreclosure Alternatives (HAFA) Program on April 5, 2010 to give homeowners and lenders an alternative to foreclosure on a property. Through HAFA, both homeowners and lenders are given a financial incentive to sell the property in question via a short sale or deed-in-lieu of foreclosure instead of foreclosing on it.
A short sale happens when the mortgage company agrees to allow the sale of a home for less than the amount owed. Typically, a short sale is more advantageous for a homeowner because they cannot make the payments on the mortgage and a short sale doesn’t affect their credit like a foreclosure does. A lender usually agrees to a short sale because they believe that selling the home for a slight loss is better than having to pay high foreclosure fees and go through the time and money it takes to sell it on the open market again.
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Due to the recession, there has been a long period of unemployment, which has caused many families to live in fear of losing their homes. There are many other factors that can also lead to financial distress. Many Americans have been put in a situation where they can not make their mortgage payments.
What many people do not realize, is that the $75 Billion that was released from Congress can also help to keep you from foreclosure. This created a program call the Obama mortgage plan that began to give incentives to banks to help you keep your home from foreclosure.
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It seems everyone is feeling the pinch these days, some of us more than others. If you are one of the countless Americans who are behind on their mortgage payments or even in foreclosure, then President Obama’s Home Affordable Modification Program (HAMP) will provide you with the immediate assistance you need to stay in your home.
The Making Home Affordable Program is part of the president’s comprehensive and unique strategy to get the US housing market back into gear. The program provides relief to the stressed American homeowner and gives back to the consumer the ability to keep their home by creating a monthly payment plan that they can afford. The Home Affordable Modification Program (HAMP) and the Second Lien Modification Program (2MP) assist lenders with modifying first and second mortgages/mortgage loans to a target range of 38% of the borrower’s gross monthly, 31% of which is paid by the borrower and 7% will be provided by Federal assistance.
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