Everyone understands that we are in the midst of a difficult recession and struggling economy and it is effecting people all over the country. The unemployment rate is steadily on the rise and has an astounding effect on the real estate market.
Thousands of home owners are feeling the pinch and struggling to make their monthly mortgage and many owe more than their home is worth. A home owner in this situation usually finds that their best option is to do a “short sale,” in which their lender agrees to accept less than a full payoff to release the mortgage. Short sales is a solid option to foreclosure, it alleviates financial and emotional strain for all involved
There are programs designed to help, HAFA is a Federally sponsored program that provides incentives to lenders that agree to short sales. Because short sales typically are a lengthy process, HAFA is hoping to streamline and standardize the short sale process. Unfortunately not all home owners will be eligible and not all lenders that participate in the program.
Recently both Fannie Mae and Freddie Mac announced they will implement their own type of HAFA Program and will be very similar to the original HAFA program. Their programs will work like this: distressed homeowners will need to apply for a mortgage modification under the federal HAMP program and the programs will then offer incentives to homeowners and lenders to complete a short sale such as $3,000 in “relocation assistance” offered to homeowners for completing a short sale.