Tuesday, January 25, 2011

What the heck is a Short Sale?

I am sure you have heard the term short sale recently. But do you know what it means?

A real estate short sale is when the lender has agreed to accept a payoff of less than what the total mortgage balance is on the property. There are many properties currently on the market in the South Bay that are listed as short sales and their number is increasing monthly.

A short sale can be a better alternative than foreclosure. In a foreclosure the bank takes over the property and basically kicks the owners out. Not good for your credit or morale, among other things.

One of the reasons there are fewer foreclosures on the market and more short sales is because of the HAFA Program. (Home Affordable Foreclosure Alternatives) This is a government subsidized program which is optional for mortgage lenders, and which has over 110 lenders signed up to participate in this program.

This program has benefits for the seller/owner which are not found in regular short sales.

If the lender is signed up with the HAFA Program, the lender has rules they HAVE to abide by such as responding to the potential seller within 30 days of his request to short sale the property, and allowing the seller 4 months to sell his property (possible extensions up to one year). Then, once the offer is received by the lender, the lender has 10 days to approve it or not and must allow 45 days to close the sale.

Here are some additional benefits of short selling your home through the HAFA program.

1) You avoid foreclosure and the uncertainties that go with it.
2) The terms of the short sale agreement are "pre-approved" with the lender.
3) The seller gets $3000 to help with moving costs.
4) If you are mid foreclosure, the lender cannot complete the foreclosure if the seller/borrower is performing his duties under the short sale agreement.
5) This program is possible with some 2nd mortgages as well.

We have the list of over 110 lenders who are signed up to participate in the HAFA program.

If you are heading towards foreclosure and want to see if you qualify for this program, please contact me and let me see if I can help you.

Geoffrey Gault
CA DRE # 01129916 NMLS # 346758

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