Posts Tagged ‘HAFA’

Looks like I am going to have to eat my words from the blog I wrote back in April; & I am very happy to do so! http://integrityallstars.com/hafa-hafa-hafa-what-the-heck-is-hafa/

Reason being, the Government just recently announced that both Fannie Mae and Freddie Mac will be participating in this program which was the main reason I and so many other professionals in my industry felt it was off target when it started back in April- looks like the government was listening however it may be too soon to see since it doesn’t start officially until August 1.  See https://www.efanniemae.com/sf/servicing/hafa/index.jsp for more information straight from their website.

Give me a call at 480-243-4242 if you want to find out if you will qualify for this Government program.

What is the default process?  I’m going to try to explain what the information on this chart means but… it is when someone starts getting behind on their mortgage payments and they are usually at least 3 months behind before the following occurs:

Basically, there are only 4 results that can happen when a person isn’t able to stay current on their mortgage payments:

• NOTS= NOTICE OF TRUSTEE SALE is sent to the homeowner.  This notice gives them 90 days to do something otherwise the bank will try to sell them home at a Trustee Sale. (Please see resource tab of website for more information and a slide show re: what happens at Trustee Sales) Most lenders will either issue a postponement or a cancelation of the Trustee Sale (aka Foreclosure Proceeding) as long as someone contacts them and tries to work out an alternative solution.  Unfortunately the majority of homeowners facing this do nothing and put their heads in the proverbial sand and ultimately do lose their homes, which only adds to this crisis.
• REINSTATEMENT OF LOAN= This means that the Lender will allow the borrower to add the missed payments to the end of the loan and allow them to become current under the original loan terms.  In this situation one normally needs to show that it was a one time problem that caused them being late.  It’s also commonly called a Forbearance.  For most this isn’t an option. 
• LOAN ADJUSTMENT= By proving a hardship, one can request what is called a loan modification in hopes of getting the payments reduced to where they are affordable.  Financial information must be sent to the Lender with an application to be considered.  The government has stepped in and have some programs (HAMP and HAFA) intended to help those in need but in my opinion, they aren’t enough.  This process can be tedious and time consuming and many give up.  In some opinions, these are just temporary Band-Aids because to get principal reductions to what the current value is has not happened with anyone I have met or heard of .  The recent stats are that 58% that do get approved for these loan modifications end up in default again as well.  I had one client recently that fought with her Lender for a year and they extended her loan to 40 yrs and reduced her interest rate but changed the loan from an interest only and in the end it only reduced her payment $100, which wasn’t the help she had asked for.  Typically the Trustee sale is either cancelled or put on hold by the Lender during this process.
• SHORT SALE= Default process is over because the borrower sells the home short with the Lender(s) approval.

 SHORT SALE VS FORECLOSURE GUIDELINES (Published by CDPE February 2010)

There is another option called “Deed in Lieu” which is basically the homeowner giving the house back and is considered a Foreclosure without having to go thru the legal proceeding of a Trustee Sale.  If the home doesn’t sell to a private 3rd party (many investors pick up great bargains) at a Trustee Sale (aka Auction), then title goes back to the bank and they have to remarket the home.  That’s where the term REO (Real Estate Owned) comes from, sometimes called a Lender or Bank Owned Home.  Those homes get marketed normally on the MLS, here’s a link to the Bank Owned Homes in our area.

If you have any further questions about this process, feel free to call us at 480-243-4242 or go to our Get Started Tab and enter in your information so we can see if we can help you or someone you know who is in DEFAULT on their Mortgage payment(s). We do everything we can here to help those that need it!

Jeff Underwood is asking whether this family should stay in their home and he has a poll on his website http://theuglytruthaboutmoney.com/ .  Last I checked, 75% had voted to move forward with a short sale.  In my humble opinion, this family needs to stop throwing in bad money after bad money and I voted to do a short sell right away. 

What I have found with my experience with all of the clients we’ve helped short sell their homes is that most people go through the 5 stages of loss when they are looking at their options with regards to their home. 

I did myself when I had 6 properties I was upside down on and needed to do something with- with 18k of monthly mortgage obligations and my 401k being eaten up, I finally accepted the fact that I was never going to recoup my money and to continue to drain my future retirement was insane.  I no longer own any of them and have started myself on the road to recovery and have a clean financial slate which feels really good to have all of them behind me now.

The 5 stages of Loss are:

1. Denial- It’s going to get better, right?  This can’t be happening to me!  My house has got to be worth more than what they say.

2. Anger- I can’t believe the neighbor just sold their house for half of what I paid for mine!?  How could they screw us like that?

3. Bargaining- If only the bank would let us do a loan modification and reduce our principle balance to what it’s worth; then our payment would be something we could afford….

4. Depression- The sadness and regret hit and this is when most aren’t making their payments because they just can’t any longer.

5. Acceptance- This is usually when we are able to successfully complete a short sale for one of our clients because they’ve realized that it’s in their best interest and are happy we are able to help.

Here at Integrity All Star Realty, we really do understand first hand the emotional roller coaster our clients experience with this process and if you would like to see if we can help you or someone you know, please complete the questionaire on our website and we will be in touch with you right away.