Underwater in your home and facing hardship?
Home prices historically have appreciated at a rate of 3%-5%. So if you bought your home for $300,000 and your home value is now $150,000.00, do you know how long it will take for the value of your home to appreciate to the price at which your purchased it? At 5%, it will take about 14 years to reach $296,989.74. At 4%, it will take about 18 years to reach $303,872.48. And at 3% appreciation rate, it will take about 23 years to reach $296,037.98. That’s 23 years just to breakeven!
If you are currently facing financial hardships and can no longer afford to keep your home, there is a way to get out from under your “underwater” home without suffering a long-term hit to your credit.
As a homeowner, you have options.
If you have been trying to do a “loan modification” and have gotten nowhere, you may want to consider a HAFA short sale. HAFA (the Home Affordable Foreclosure Alternatives Program) is a government program that helps homeowners start fresh by giving incentives to lenders as well as homeowners to participate in this foreclosure alternative program.
By participating in a HAFA short sale, there is an automatic stay against any pending foreclosure action against your home. Your home will not be foreclosed upon during the process, you will receive $3000 for relocation expenses, and your lender will not go after you for a deficiency judgment. Your real estate agent has up to 12 months to market your home and if it does not sell during that time, the lender will give you an automatic “deed-in-lieu of foreclosure.”
A HAFA short sale really protects the homeowner. In addition, new guidelines effective as of February 1, 2011, have made it so that more homeowners than ever can qualify for a HAFA short sale. So if you may not have been eligible before, you may be eligible now. And most important of all, there is absolutely no fee to the homeowner to participate in this program.
The program is set to expire by December 31, 2012 – and no one can know for certain right now if it will be extended – so the time to take advantage of the program if you are eligible is NOW.
If you have questions about your eligibility for the HAFA program or about short sales in general, please contact me today at 702-526-7809. I am available to answer your questions, determine your eligibility for the HAFA program and communicate with your lender to get your application started today at no charge to you.
Below is a summary of the HAFA Program from the U.S. Government’s website
http://www.makinghomeaffordable.gov/programs/exit-gracefully/Pages/hafa.aspx
Home Affordable Foreclosure Alternatives (HAFA) Program
If your mortgage payment is unaffordable and you are interested in transitioning to more affordable housing, you may be eligible for a short sale or deed-in-lieu of foreclosure through HAFA. The benefit of a HAFA short sale is that you are no longer responsible for the difference between what you owe on your mortgage and the amount that your home sells for. You will also receive $3,000 in relocation assistance upon successful closing of your short sale. In a short sale, the servicer allows you to list and sell the mortgaged property with the understanding that the net proceeds from the sale may be less than the total amount due on the first mortgage. or deed-in-lieu of foreclosure. With a deed-in-lieu of foreclosure, you voluntarily transfer ownership of your property to the servicer— provided the title is free and clear of mortgages, liens, and encumbrances. Generally, if you make a good faith effort to sell your property but are not successful, a servicer may consider a deed-in-lieu of foreclosure.
Eligibility
You may be eligible to apply if you meet all of the following:
You live in the home or have lived there in the last 12 months.
You have a documented financial hardship.
You have not purchased a new house within the last 12 months.
Your first mortgage is less than $729,750.
You obtained your mortgage on or before January 1, 2009.
You must not have been convicted within the last 10 years of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction.