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Real Estate and Mortgage Market Insight for the Bay Area

HAFA (Home Affordable Foreclosure Alternative) is Coming to Town!

March 21st, 2010 8:02 PM

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As I reported in a recent post, up until now, short sales have had a high rate of failure, leading to frustration by buyers, distressed sellers, real estate agents and escrow officers. HAFA (Home Affordable Foreclosure Alternative) is a new federal program which becomes effective April 10, 2010. The intent of the new guideline is to streamline the process and create incentives for short sale transactions for lenders and borrowers through 12/31/12. Whether you are a homeowner, home buyer or home seller, this program may impact on you!Yes, even if you are a current homeowner that is not experiencing financial distress you may be affected.

Here’s how; as can be seen here, homes that have been foreclosed on and are now bank owned receive a sale price, on average, some 20% below that of a successful short sale. What homes sell for in your neighborhood directly impacts the value of your home. The fact that short sale sellers typically stay in their home until escrow closes limits the negative affect of foreclosed homes that become vacant.

As a homebuyer you are impacted because of the high failure rate and length of time short sales have been experiencing. In the first time buyer price range short sale listings represent the highest percentage of homes for sale, however, most buyers learn quickly to limit their search to bank owned or traditional market listings, thus ignoring half or more of the available homes for sale. The expected outcome of the new guidelines, which become effective April 5, 2010, is to align the short sale process with more traditional sales.

And of course, all this will benefit the seller experiencing financial hardship. Hopefully, the failure rate will go down and the process will become more predictable. So, lenders have until April 5th to implement the HAFA guidelines and if it provides the intended benefit, it’s a win-win for all.For those that are interested, I’ve posted an outline of the new guidelines under Quick Links on our website, www.aboutbayareahomes.com. I am always available to answer your questions or discuss your concerns. Simply text, call (650 325 7877) or email me (russ@brokerruss.com) for a prompt response.

Now, more than ever buyers and sellers will benefit from the advice and guidance that an experienced REALTOR® can provide. If you are in the San Francisco Bay Area, I invite you to take a look at our Resource Center, www.AboutBayAreaHomes.com. There you will find links for active home listings, including bank owned and short sales, home loan information, market activity reports, home seller strategies, staging and decorating, a suite of 19 calculators, plus my book, “Let’s Make a Deal, The Insiders Guide to Buying and Selling Real Estate” and more. Of course I am always available to discuss your real estate or mortgage related questions or concerns, just call, text or email me for a prompt response.

Russ Boyd and his team professionally assist buyers, sellers and homeowners in the Peninsula Communities of the San Francisco Bay Area. They serve clients in San Mateo, San Francisco, Santa Clara, Alameda and Contra Costa counties. Licensed as a Real Estate Broker by the California Department of Real Estate, 01264240.

Posted by Russell Boyd on March 21st, 2010 8:02 PMPost a Comment (0)