RISMEDIA, November 11, 2010—Realtors gleaned inside knowledge on the efforts being made to improve the short sale process through the Home Affordable Foreclosure Alternatives Program at the 2010 REALTORS® Conference & Expo. HAFA was intended to help homeowners who are unable to keep their home under the Making Home Affordable Modification Program avoid foreclosure by streamlining the short sales process and providing incentives to lenders that complete short sales. According to the National Association of Realtors’ most recent Realtors Confidence Index, 12% of all recent home buyers purchased their home through a short sale.
“Realtors from across the country are telling us that the current short sales process is time-consuming and cumbersome, discouraging buyers who would otherwise want to purchase a home in a short sale,” said NAR President Vicki Cox Golder, owner of a real estate company in Tucson, Ariz. “As the leading advocate for home ownership and housing issues, NAR has been urging lenders and servicers to approve reasonable short sale offers that allow homeowners to avoid foreclosure when a family is absolutely unable keep their home.”
HAFA includes uniform procedures, standards forms, and deadlines, but its success depends on effective servicer implementation and the cooperation of investors and subordinate lien holders.
Lenders have been criticized for cumbersome and confusing short sale processes, and JK Huey, senior vice president, Wells Fargo Home Mortgage REO and Short Sale, addressed some primary concerns and myths surrounding these transactions.
“There are a number of decision makers involved in a short sale, and the more parties involved, the more complex the process becomes,” said Huey. “It’s important to keep in mind that this is not a typical buy-sell transaction. Our Realtor partners’ expertise helps us deliver timely solutions to assist customers, minimize losses to investors, and help to rebuild and stabilize our communities.”
To address concerns related to the short sales process, Wells Fargo has increased staff resources by 57% over the past 12 months, implemented proactive marketing efforts to provide information and education on short sale workout alternatives to its customers, and worked with legislators and government agencies to help streamline processes.
Panelist Laurie Maggiano, director of policy for the U.S. Department of the Treasury’s Office of Homeownership Preservation explained how homeowners in need benefit from HAFA. HAFA provides $3,000 relocation assistance to homeowners after a successful closing and requires that the homeowner be fully released from future liability for the primary mortgage and also any subordinate liens.
“HAFA offers additional foreclosure avoidance options when other home retention options have been exhausted,” said Maggiano. “Being proactive can only positively impact the homeowner’s ability to buy a home in the future. For example, Fannie Mae will allow a homeowner to be considered for a home loan within two years of a short sale, whereas a homeowner who goes through a foreclosure will need to wait seven.”
Earlier this year, NAR produced a “Home Affordable Foreclosure Alternatives” brochure to explain the HAFA program to Realtors so they could help their home buyer and seller clients through the process. NAR also offers the SFR certification (Short Sales and Foreclosure Resource) to help Realtors obtain advanced training in managing the complexities of transactions that involve foreclosed homes and short sales.
The Realtors Confidence Index is a key indicator of housing market strength based on a monthly survey of over 50,000 real estate practitioners.
For more information, visit www.realtor.org.