“Here’s some good news for homeowners fed up with the home short sale process: new rules are expected to
make it faster, easier, and more efficient for both buyers and sellers. The Home Affordable Foreclosure
Alternatives (HAFA) program, a follow-up to the Home Affordable Modification Program (HAMP), aims to help
homeowners by simplifying home short sale procedures and encouraging more banks to participate. Read on
to learn more about the HAFA home short sale and how it can help you.
What’s New?
HAFA is offered to borrowers who have previously applied to HAMP, but either did not meet the requirements
or failed to benefit from it. The Home Affordable Foreclosure Alternative (HAFA) program put into effect a
new short sale rule in which borrowers must be approved for short sales before putting their home on the
market. This greatly lowers the pressure in most banks, as they often have to deal with borrowers who would
be better off with a loan modification. The reduced pressure allows them to cater more effectively to those
who do qualify for the home short sale process.
Documentation Requirements
Borrowers are now required to present all their documents to the bank upon application. Earlier HAFA rules
allowed them to get the home short sale process started while still gathering their documents. But many were
unable to complete them and ended up going to foreclosure instead. New HAFA regulations avoid this problem
by having sellers provide all the paperwork up front, so the home short sale process can proceed more
smoothly.
Preset Time Frames
Under HAFA, lenders must write a home short sale offer to borrowers who fail or are found ineligible for loan
modification within 30 days. The borrower must then reply within 14 days. Offers must be forwarded to
lenders within three days, and lenders must either approve or reject them within ten days. This ensures that
none of the parties causes unnecessary delays, and forces banks to pursue the home short sale process
instead of going straight to foreclosure.
Pre-Approved Sales
Another thing that makes the HAFA home short sale different is that banks and borrowers now have to agree
on the price before the home is listed. Previously, the home short sale process allowed sellers and their
agents to set their price without informing the lender. But since banks have the last word on Home Short Sale
pricing, it often took a lot of negotiation between banks and buyers. By approving the price before a home
hits the market, the time between offer and closing is much shorter. ”
Tags: Home, Regulations, Rules, sale, short