HAFA Short Sale Program Starts on April 5th
On April 5th, the Obama administration will be promoting a new program to help some beleaguered home owners get out from under the debt of their homes instead of defaulting on their mortgages. The program is called the Home Affordable Foreclosure Alternatives Program (HAFA). There are already an estimated 5 million homeowners that are behind on their mortgage payments by a month or more.
The new program will work a lot like a short sale. It will allow homeowners to sell the property for less than the balance of the mortgage on the home. In some cases this will allow homeowners to leave the table with a little money. While this program may not make much since to some, it is being implemented to help prevent these same homeowners from defaulting on their loans outright.
It is being done to help stave off an even worse financial crisis in the lending and real estate industries than they are already experiencing. Under this new program, distressed homeowners can get out from under their mortgages without ruining their credit with a foreclosure and without worry about future legal actions by the lender.
Lenders will benefit from the program in a few ways also. First off, they will certainly stand a better chance earning more on the home when compared to what they would earn on a foreclosure. They will be able to advertise to sell the home and, are more likely to get a reasonable offer in. They may also be able to avoid the all too common practice of displaced homeowners trashing the home. This practice happens far too often and leaves the lender facing the additional task and expense of making the home ready to sell again.
The total benefits of the new plan remain to be seen but it is fair to say that any help that the real estate industry gets to help keep it from slipping is a good idea. Please go to www.tombrewerjr.com for more information.