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What is a HAFA short sale?

Posted on August 13, 2022 by David Darling

Table of Contents

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  • What is a HAFA short sale?
  • What does Hafa stand for?
  • What are the risks of a short sale?

What is a HAFA short sale?

The Home Affordable Foreclosure Alternatives (HAFA) short sale program was a government-sponsored program designed to ease the process of real estate short sales. It was effective from April 5, 2010 through December 31, 2016. Homeowners seeking relief must now work directly through their lender.

What does Fannie Mae call short sales?

A short sale is the sale of a home for less than the balance remaining on your mortgage. If your mortgage company agrees to a short sale, you can sell your home and pay off all (or a portion of) your mortgage balance with the proceeds and avoid foreclosure.

How long does it take for Fannie Mae to approve a short sale?

The Negotiation Process Respond to the counter offer via the HomePath for Short Sales Portal within five business days. Take note of any requested adjustments to closing costs and contributions. If any additional information or documentation is requested, please respond quickly to avoid delays.

What does Hafa stand for?

Definition. HAFA. Home Affordable Foreclosure Alternatives (real estate program)

What happens after a short sale is approved by the bank?

The lender agrees to accept the sale proceeds and release the lien on the property. The proceeds of the sale pay off a portion of the amount owed. Short sales are one way for borrowers to avoid foreclosure.

What is home affordable foreclosure alternatives?

The Home Affordable Foreclosure Alternatives (HAFA) Program The HAFA program allows borrowers to leave their properties through two possible means, a short sale or a deed in lieu of foreclosure. Short sales require you to sell your house for less than what you still owe on your mortgage.

What are the risks of a short sale?

Learn seven risks of a short sale so you can plan properly and decide if it could be the right investment for you.

  • Long Process.
  • Subject to the Mortgage Lender’s Approval.
  • Lender Could Counter, Reject or Not Respond.
  • Opportunity Cost.
  • Property ‘As Is’
  • Is the Seller Approved?
  • Lenders Prefer All Cash or Large Down Payments.

Why is short sale better than foreclosure?

A short sale transaction occurs when mortgage lenders allow the borrower to sell the house for less than the amount owed on the mortgage. This helps the home seller by allowing them to avoid foreclosure. Short sales are less damaging to a credit report than a foreclosure.

What happens after a short sale is approved?

After the seller accepts the offer, the listing agent will send the listing agreement, the executed purchase offer, the buyer’s pre-approval letter, a copy of the earnest money check, and proof of funds to the bank.

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