Two Unexpected Reasons to do a HAFA Short Sale in Sacramento
HAFA short sales started out on the wrong foot, but over the years, they have improved. Take a Bank of America HAFA short sale. I would have said last year, please, please take it, take it and shove it where the sun doesn’t shine. They were absolutely horrible because Bank of America hired third party negotiators, none of which seemed to have a clue, and these transactions dragged on for months after agonizing months.
But now they are much better. They are so good that some lenders forgot that they do them. Who was it? Oh, yes, Nationstar told me the other day that HAFA short sales expired last December. Hello? No, they have been extended. The HAFA program has been extended to December 31, 2013. The HARP program has been extended to 2015. I would be not be astonished to see HAFA extended even further as well.
When HAFA short sales first began, homeowners wanted to do them because they gave the homeowner a release of liability without a fight. Nowadays, that reason falls to the bottom of the list because sellers are protected under California Civil Code 580. Also, homeowners were eager to do the HAFA because they would get a $3,000 relocation incentive. Today, the homeowner must occupy the home to get that incentive, and many sellers have already moved out.
So why would you want to do a HAFA short sale? For 2 really good reasons. The first is if a Notice of Default has not been filed, your credit report is supposed to reflect Paid in Full. Not Paid in Full for Less Than Agreed but Paid in Full. That’s a huge reason in itself. Notice, I didn’t say you had to be current on your mortgage, you just don’t want the Notice of Default to be filed, which means you started your short sale early enough to get that approval letter before the bank records the Notice of Default. You were proactive. You didn’t wait until the last minute and call up an agent to plead for a postponement of auction. You were smarter than that.
The second reason has to do with whether you have a hard-money loan in a junior position. Those hard-money second loans can be the downfall of your short sale if they are not handled correctly. The lenders know they have recourse through foreclosure so why would they do a short sale? Because for some, money in the hand is worth twice that in the bush. And a HAFA short sale will give them more money than any other kind of short sale. Whereas in an ordinary short sale, those lenders might receive only 6% of the unpaid principal balance, in a HAFA, the first lender can authorize payment of up to $8,500. If the principal balance is, say, $20,000, it comes down to $1,200 vs. $8,500 = no short sale vs. short sale, yes.
If you’re wondering what kind of short sale is right for you, call your Sacramento short sale agent, Elizabeth Weintraub. I’ll be happy to help you to sort through your options and negotiate that short sale for you. All fees are paid from the proceeds of sale, so why not hire the best short sale agent you can find? Call Elizabeth at 916 233 6759.