Tampa Palms, Westchase, Carrollwood and Tampa Bay Real Estate News From Jeanne Prigitano

As I mentioned in last week’s post, I am now a Certified HAFA Specialist. So, what is this thing called HAFA. HAFA stands for Home Affordable Foreclosure Alternatives. Many Tampa Bay area homeowners and homeowners throughout the country may find themselves unable to pay their current mortgage. They may also find that the value of their home is less than what they owe. If they stop paying their mortgage, they may face foreclosure. If they try to sell, they are looking at a Short Sale situation. For a discussion on Short Sales and potential implications, please go to my website www.TampaHouseHunter.com, click on Blog, go to August archives and click on Things You Wanted to know About Short Sales But Were Afraid To Ask.

That post describes some of the concerns and issues surrounding Short Sales. A Short Sale is almost always preferable to foreclosure for many. Nevertheless, they can be a nightmare for all involved. Even if the buyer and seller agree to the sale, it needs to be approved by the lender holding the mortgage because the lender is accepting less than what is owed them. It could take months or even years to get an answer from the lender. Everyone is in limbo and the lender may not even approve it ultimately or may not approve it at the offer price. If approved, the lender may place a deficiency judgment on the Seller for the difference between the purchase price and what is owed and has 5 years in which to do so and another 10 years to collect.

What’s a seller to do? HAFA may be the answer. In order to accomplish a HAFA Short Sale, the lender must participate in this government program (more than 90% of all residential home loans being serviced are participating) and the Seller must qualify (seller’s primary residence and monthly mortgage payment must exceed 31% of seller’s gross income are among the qualifying criteria). There are some major differences with a HAFA Short Sale and a Seller who lists the house for sale for less than what is owed and calls it a short sale.

The major difference is the Seller and Lender agree to sale terms prior to listing the property. Unless a property is a HAFA short sale, there is no such thing as an approved short sale. There are standard processes and timeframes for lender acceptance (how does 10 days sound). The most important aspect for the Seller is that there is no deficiency judgment and the Seller is fully released from future liability of debt. Yes, you heard me correctly. NO DEFICIENCY JUDGMENT AND RELEASE FROM LIABILITY. The Seller even gets $3000 to help them transition.

As always, I cannot provide you financial or legal advice. However, if you are at the point of trying to sell your home for less than what is owed, you may want to look into the HAFA program. Contact me with any questions and I’ll point you in the right direction. As a Certified HAFA Specialist, I can help!