Aug 10
29
Why you should say NO to HAFA
What You Need To Know About The HAFA Program
The government has designed a new program called HAFA to be put into effect from April 5th 2010 apparently designed to help people avoid foreclosure. It’s perfectly irresistible (not!)You will get a letter from the bank offering help (particularly once a HAMP loan modification program has failed to materialize for you as it has for 96% of applicants!).
They will offer $1,500 in moving costs will guarantee no deficiency. So what’s wrong with that?
1. The bank dictates the price (so there is a good chance no one will be interesting in buying your house).
2. You have to make partial mortgage payments during the short sale process of 31% of your gross monthly income (as opposed to nothing at all on a classic short sale).
3. By agreeing to the HAFA short sale you will automatically be agreeing to ‘deed in lieu’ of foreclosure.
4. You will be given 120 days to sell the house. This can be extended if the bank choses, for up to a year or the bank could just take your house after 90 days.
5. You have to either pay off all other liens on the house or get the release from the lien holders yourself. This includes HOA liens. You can’t offer more than $3,000 from the sales price in order to do this. How good are your negotiating skills??
6. Any buyer of the property will not be able to re-sell the property for 90 days so this excludes a purchase from any investors wishing to buy and sell the house for a profit – seriously limiting your buyer pool especially in Las Vegas.
7. They will report to the credit agencies that the debt was settles for less than the full payment.
8. Oh, and the $1,500 you get back for moving costs (after you’ve paid all those partial mortgages) will be taxed by the IRS as income. So, if you get an offer for a HAFA short sale say NO. Either reply and say no or just do nothing for 14 days.
