Short Sales

Due to current economic conditions, the number of short sale properties on the market is rising. The increasing number of short sales on the market presents challenges for REALTORS®. Below you’ll find more information on: short sales and their challenges, the government’s efforts to address these challenges, and tools to help you navigate the short sale process.

Home Affordable Foreclosure Alternatives Program (HAFA)

On November 30, 2009, the Treasury Department released guidelines and forms for its new Home Affordable Foreclosure Alternatives Program (HAFA), part of the Home Affordable Modification Program (HAMP).

• Learn more about HAFA

• Government Forms and Guidelines (PDF: 624K)

• NAR HAFA Program FAQ (PDF: 404K)

What is a short sale?

A short sale is a transaction in which the lender, or lenders, agree to accept less than the mortgage amount owed by the current homeowner. In some cases, the difference is forgiven by the lender, and in others the homeowner must make arrangements with the lender to settle the remainder of the debt.

Why is the number of short sales rising?

Due to the recent economic crisis, including rising unemployment, and drops in home prices in communities across the nation, the number of short sales is increasing. Since a short sale generally costs the lender less than a foreclosure, it can be a viable way for a lender to minimize its losses.

A short sale can also be the best option for a homeowners who are “upside down” on mortgages because a short sale may not hurt their credit history as much as a foreclosure. As a result, homeowners may qualify for another mortgage sooner once they get back on their feet financially.

More Information on Short Sales

• www.hud.gov/foreclosure

• www.irs.gov

• www.makinghomeaffordable.gov

• www.realtor.org

• Lake Arrowhead Weather

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