Consumers have been bombarded with daily news about what Washington is doing today to save our economy from this sagging real estate market.
Banks have not been strong advocates of the short sale process. But this ideology is changing more and more everyday in an effort to stop this foreclosure mess.
A short sale enables the homeowner to leave their home while not getting the devastating hit on their credit report compared to a foreclosure entry.
This alternative process allows banks and lending companies the opportunity to save money by avoiding the more formal foreclosure avenue.
Most St Louis home loan owners would think that that in itself should make them a bankers preferred option. But surprisingly it is not.
This apathetic attitude may be due to the fact that short sales take a longer period of time to be completed with the average taking 60 days or longer.
And if the time frame wasn’t the culprit, they can seem to be a loss cause when other lenders have liens on the distressed house.
With feeling the financial pinch and loss of business, the National Association of Realtors strongly urged the U.S. Treasury Department to come up with a new program designed to primarily encourage the use of short sales.
The new kid on the block came to known as HAFA or the Home Affordable Foreclosures Alternatives which went into effect April 5, 2010.
There are four main aspects to HAFA’s terms for short sales:
I. By holding parties to strict deadlines for various parts of the process
II. Financial incentives; includes $3000 to assist the homeowner to move; $1500 for servicers to cover costs; $2000 for investors who will allocate as much as $6000 of the sales proceeds to go to other lien holders
III. Allow current loan holders pre-approval for short sale terms before listing of any said properties
IV. Consumers upon approval must be released from all future liabilities from their home loan debt
Under HAFA’s new arrangement, banks and mortgage lenders must give a final decision on whether to accept or decline this short sale process within 10 business days
There are recent statistics showing that banks already have an immense inventory of close to 1.1 million foreclosed houses.
There is no surprise that in the economy’s present state, both foreclosures and short sales will be on the rise.
The Mortgage Bankers Association (MBA) said more than 9 percent of homeowners were behind at least one payment on their home loan in the fourth quarter of 2009.
Other mortgage industry data companies place the figure closer to 4.8 million that are delinquent or may already be in the early stages of the foreclosure process.
The sad thing is, HAFA will in no way be able to help such a staggering number of people who are now facing eventual foreclosure.
St Louis refinance experts also have reported that all banks and lending companies who offered the HAMP or Home Affordable Modification Program must now offer the HAFA federal program to homeowners.
Want to find out more about a St Louis mortgage, then visit Floyd J. Tapia’s site on how to choose the best St Louis loan expert for all of your St Louis lending needs. Or give us a call at 877-334-0210 or 314-334-0210.
Tags: business, finance, Foreclosure, Foreclosure/Repossession, General Real Estate Tips, lending, loans, mortgage, st louis finance, st louis home loan, st louis home mortgage, st louis loan, st louis loans, st louis mortgage, st louis refinancing