As a service professional, I am of the belief that we must always  be learning.  We must not only participate in the required  continuing education courses, but go beyond by obtaining specialized training to differentiate ourselves from the average Real Estate Agent.  Only by becoming better educated, can we serve our clients better by utilizing the latest changes in laws and policies.

Some good news about the effects of HAFA on California Foreclosures.

Homeowners, Foreclosure prevention is serious business; please treat it that way.  In short sales, because the borrowers are suffering some sort of financial hardship, the lender has to pay for the usual closing related costs, including broker fees.   However, this does not mean you, the borrower, should simply hand over the responsibilities to any agent, desperate for business. There are repercussions if the short sale cannot be completed and you are faced with foreclosure; and you may end up spending money needlessly.

I was speaking to a fellow agent yesterday who told me about a horror situation with a bad agent doing a short sale for a client of hers. This particularly inadequate agent told the borrowers they had to vacate the house prior to the listing the house, so these borrowers had to move out to an apartment, believing that was required to do a short sale.   They won’t know how long this short sale will take to be approved, so they are now paying rent for an unspecified amount of time into the future.  This was a completely unnecessary move; and these borrowers did not have the financial wherewithal to make this move.

These borrowers, by not checking into the agent’s background and experience ended up having to spend thousands of dollars they did not have to spend.  A competent agent would not advise the borrower to move out before listing house, especially in this circumstance when there was nothing warranting such a move.

Ask for references. You don’t have to pay for the agent’s fee, so why would you not get the most experienced and qualified representation you can find out there?  This is a no brainer.  If an agent is good, his clients will vouch for him/her; conversely true if the agent is bad.

HAFA, HAFA, HAFA.  What is it exactly and why are so many people talking about it and why is April 5, 2010 an important date?

For those who have been following the foreclosure prevention solutions like  loan modification and short sales, this  a critical program which will impact their lives in a major way.  This is the Federal Government’s effort into stream lining and standardizing the short sale process for those borrowers who do not qualify for loan modifications through the HAMP  program. The Treasury is obviously concerned about the proliferation of distressed properties in the real estate market and how they affect the overall health of the economy.  April 5, 2010 is when HAFA goes online.

Remember, short sales that do not successfully get approved  end up on the auction block and if they are not sold there, turn up as the neighborhood eye sore in the form of an REO (Bank owned) properties.   If you are a homeowner, the last thing you want is for an REO to turn up on your block as it will set the bottom range of your home price.   Both Short Sales and REOs negatively impact your neighborhood prices, but  short sales often fetch higher selling prices because they typically have homeowners living there and taking care of the  property which means they show better and are in better condition than REOs; the latter are vacant and many times have been vandalized by the homeowners.   REOs are like the black sheeps of the  family that no one will invite to the party.   Everyone’s collective goal is to prevent more REOs from hitting the real estate market.

What is HAFA?

The Home Affordable Foreclosure Alternatives (HAFA) Program is a government-sponsored initiative led by the US Treasury Department assisting all Home Affordable Modification Program (HAMP)-eligible homeowners in avoiding foreclosure, specifically through short sales or deeds-in-lieu. First introduced November 30, 2009 in Supplemental Directive 09-09 as part of HAMP, HAFA assists eligible homeowners in quickly and effectively implementing short sales by providing financial incentives to lenders that work in conjunction with HAMP to assist homeowners in need. The program was introduced in part with the intent to remove the stigma from short sales and help keep communities from being destroyed through massive foreclosures. HAFA in its current state is only applicable to conventional-type, non-Governmental Serviced Enterprises (non-GSE) mortgages and therefore does not apply to loans owned or guaranteed with Fannie Mae or Freddie Mac. These organizations may have plans to release their own versions of HAFA.

Details of HAFA

HAFA was introduced to simplify and streamline the short sale process. HAFA accomplishes this in the following ways:

• Compliments HAMP by providing viable alternatives for borrowers who are HAMP-eligible
• Utilizes borrower financial and hardship information collected in conjunction with HAMP, eliminating the need for additional eligibility analysis
• Allows the borrower to receive pre-approved short sale terms prior to the property listing
• Prohibits the servicer from requiring, as a condition of approving the short sale, a reduction in the real estate commission agreed upon in the listing agreement
• Requires that borrowers be fully released from future liability for the debt
• Uses standard processes, documents and timeframes
• Provides financial incentives to borrowers, servicers and investors

HAFA provides financial incentives as follows:

• Financial incentives for lenders participating in the program include up to $6,000 (updated March 26, 2010; was previously $3,000) servicing bonus upon completion of a short sale or deed-in-lieu
• Homeowners qualify for $3,000 (updated March 26, 2010; was previously $1,500) in Borrower Relocation Assistance after a short sale or deed-in-lieu has been executed (may classify as taxable income in some cases
• Lenders pay all servicing fees — homeowners suffer zero out-of-pocket expenses

Part 2 of 3 – Who is eligible for HAFA

Walking Away Is NOT The Answer

You may have heard that a “strategic default” can be an appropriate and even beneficial reaction to an upside-down mortgage or impending foreclosure. While this idea is widespread, the truth is that default is never an easy road to choose, and rarely ever strategic.

Unfortunately, the ramifications of a “strategic default” are rarely explained, leaving many homeowners stranded on an island of misinformation. To assist you, I’ve prepared a free report outlining the myths and misrepresentations of strategic defaults.

Fill out your information below for this free report. Don’t hesitate. Get the facts today!

Got another Short Sale approved today with no promissory note or contribution required from sellers.  It’s was a good day.  Sellers get to walk away from a house that is worth less than what they owe on it and the bank gets to sell for a price higher than the list price and not have to continue to pay for property taxes, HOA dues and other carrying costs and make a clean break.

Feeling good because one less family has to suffer under the burden of  foreclosure and its consequences.

http://www.postlets.com/repb/3031677

“What is your plan?” When I ask this question, the typical response is something in the order of:  “What plan?  I didn’t know you needed one.”

I ask this question of my buyers who want to get that “deal” and I also ask that of my sellers who want to sell quickly with no hassle and get top dollars.   I use the analogy that a real estate related plan is like having a well platted map before going on a long trip (the analogy still works in this day of the GPS).  You may eventually get there, but if you have a well organized plan or a map, you can save tremendous amounts of time, money and heartache and give yourself the opportunity to enjoy the trip rather than wasting time sweating the details on the fly.  In Real Estate, you don’t get that deal or you don’t get that multiple offer scenario by accident; there is always lots of work done beforehand.

Most of us would not consider taking our family to Disneyland or Legoland or wherever our destination is, without having some sort of itinerary.   Yet, in these difficult times, when it is now so common for homeowners to be struggling to make their mortgage payments and who are facing the very real possibility of foreclosures, homeowners try to “wing it” and approach this very long and arduous trip without any sort of planning or assistance.  Almost hoping that foreclosure can be avoided by accident or hoping to talk to someone who will understand and sympathize with their plight and make things stop.  Unfortunately, that rarely happens.

Foreclosure is a process driven activity, which means activities are laid out in sequential order.  In order to successfully fight a foreclosure, you must understand the process and have a plan to fight the lender and stop the sequence so the final step – foreclosure – is not achieved.

Fighting foreclosure is not something I can write about in a few paragraphs in this blog; as you can imagine, it is much more complex and the situations and hardships differ from homeowner to homeowner.  However, I do have a report here which will explain simply and provide information so that the distressed home owner can take action to stop the foreclosure process and learn about the foreclosure prevention options that are available to them.  Some sort of action must take place; inaction will not stop, but in most cases will accelerate the foreclosure process.

Suze Orman does a fantastic job of explaining tax consequences of a short sale.