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Arizona Homeowners: How Changes In Short Sale Rules Benefit You.

A short sale of real estate occurs when a property is sold and the lender agrees to accept less than is owed on the property. The lender agrees to release the lien that is secured on the  property upon receipt of less money than is actually owed on the home. Until recently, a short sale usually occurred when a homeowner could not make their payment on the property. Until recently….

Breaking news regarding short sales.

The rules are changing in regards to short sale.  In December, HUD announced that they will now insure FHA loans. If you are able to sell your house while you are current, you will no longer need to wait 2-3 years to purchase a home again. You can purchase immediately. In fact, in some instances, you can purchase a home 1 day after your short sale is completed.

Of course there are some rules

  • Must be current on your mortgage for the previous 12 months
  • Must have a case to move. You cannot take advantage of this program to financially benefit yourself. Acceptable reasons include divorce, job relocation, marriage, birth of a child etc…

Your short sale will in effect become a normal transaction.

More help for struggling homeowners

HAMP and HAFA

Housing Affordable  Modification Program: This  plan involves a straightforward trade-off. The government asks lenders to cut mortgage payments for eligible applicants by lowering their interest rates or extending the life of their loans. In return, the Treasury reimburses lenders for some of their costs. The lender will have to first reduce payments on mortgages to no greater than 38% Front-End Debt-to-Income (DTI) ratio. The treasury will match further reductions in monthly payments dollar-for-dollar with the lender/investor, down to a 31% Front-End DTI ratio for the borrower.

Millions of homeowners who are regular in their mortgage payments, but having difficulty making the payments and the borrowers who have already missed one or more payments may be eligible for loan modification.

Housing Affordable Foreclosure Alternatives

HAFA is part of the Home Affordable Modification Program or HAMP.  The Housing Affordable Foreclosure Alternatives Act or HAFA provides incentives in connection with a short sale or a deed-in-lieu of foreclosure (DIL) used to avoid foreclosure on a loan eligible for modification under the HAMP program.

HAFA provides streamlined short sale rules and incentives for borrowers and lenders to work together to avoid foreclosure. The rules — in effect between April 5, 2010, and Dec. 31, 2012 — will speed up the short sale process.

To be eligible for HAFA, homeowners must first apply for a loan modification through the Home Affordable Modification Program, or HAMP. Owners who do not qualify for a loan modification or miss payments during the initial loan modification period qualify for HAFA.

HAFA requirements include:

  • Property must be a principal residence.
  • Mortgage must be originated before Jan. 1, 2009.
  • Mortgage must be owned or guaranteed by Fannie Mae or Freddie Mac.
  • The borrower is delinquent or default is foreseeable.
  • The Homeowner demonstrates a hardship.
  • The Borrower’s total monthly housing payment must exceed 31 percent of gross income.
  • The unpaid principal balance must not exceed $729,750.

Because I work for a title company, I have the honor of working with some of the best Realtors in Arizona. If you are an Arizona homeowner and are considering a short sale please contact me for a referral to a CDPE (Certified Distressed Property Expert) Realtor that specializes in short sales. Thank you.

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Stephen

Hi I'm Stephen Garner, I'm just a guy in the title industry {in Phoenix} trying to change how real estate agents market themselves and their services. To that end, I teach my clients HOW TO leverage sales technologies like WordPress, Content, Video, Camtasia, Final Cut X, iMovie and indexable IDX solutions to convey value and help your ideal client find you online when they are most interested in learning about you and your services. I work for escrows. Hire me!

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