My New Blog

I completed a class today that was incredibly informative. We learned the ins and outs of the HAFA program. HAFA - Home Affordable Foreclosure Alternative is a government streamline process for applying for and closing a short sale on a non-VA, non-FHA, eligible loan. Though the class was very helpful, it became clear why I was the only person from our area in the course. Non-VA loans.

Keeping in mind that I don't do loans so I am only using my own experience here, but the area surrounding Ft. Bragg is generally homes bought using a VA loan. Why not, we are heavily populated by military personnel and it is one of the only 100% financing options. So, I would say 85% of our loans are VA. Then the final 15% are greatly FHA so, I was in a course that was designed to help 90% of the US homeowners and about 5% of the homeowners in our area. Ah well, so it wasn't a process I can use each and every day but still great information.

What impressed me is that the HAFA program mandates that the short sale processor keep the foreclosure processor in the loop. On many occasions, the short sale transaction got to the day before or even the day of closing and *zap!* the house has bee foreclosed on and the transaction is either off the table or there is a mad rush to forestall the foreclosure process to get deal closed. Why stress it?!?! HAFA even takes into account that the distressed homeowner is still in need of a roof overhead. This plan will put $3,000 into the hand of the seller as closing to get an apartment or place to stay.

Wow, $3,000? I wouldn't go through this process lightly. It will hurt. Financially, credit-wise and in self-esteem. Financially: If you do have a little equity, kiss it goodbye. If you want to purchase a home in a couple of years when the times are looking up...you will likely pay a higher interest rates. Credit-wise: FICO is pretty black and white, you have a payment that is 120 days late, they take points from your score. They do not take into account the difference between short sale or foreclosure. The difference is calculated at the different credit reporting agencies. The higher your credit score...the bigger the hit. Self-esteem: The pride of buying your first home is potent. The reality of not being able to keep it, devastating!

More on the HAFA process…if you want to get informed visit www.makinghomeaffordable.gov