Consumers have been bombarded with daily news about what Washington is doing today to save our economy from this sagging real estate market.
Banks have not been strong advocates of the short sale process. But this ideology is changing more and more everyday in an effort to stop this foreclosure mess.
A short sale enables the homeowner to leave their home while not getting the devastating hit on their credit report compared to a foreclosure entry.
This alternative process allows banks and lending companies the opportunity to save money by avoiding the more formal foreclosure avenue.
Most St Louis home loan owners would think that that in itself should make them a bankers preferred option. But surprisingly it is not.
There are a few perceived negative factors built into current short sales. First, they generally take longer to complete; that being on average two months longer.
Another problem banks and lenders run into is that in many cases, there are other liens being held on a property which again can be costly.
Not surprising is the strong push by the National Association of Realtors urging the United States Treasury Department to initiate a new program that would push the use of short sales on a regular basis.
Thus, the new federal program known as HAFA or the Home Affordable Foreclosures Alternatives came to be in existence as of April 2010.
There are four main aspects to HAFA’s terms for short sales:
I. By holding parties to strict deadlines for various parts of the process
II. By providing financial incentives, including $3,000 to help the homeowner relocate; $1,500 for servicers to cover their extra costs; and as much as $2,000 for mortgage security investors who allow as much as $6,000 of sales proceeds to go to other lien holders
III. Before any listing of said property occurs, consumers must be allowed pre-approval status for the short sale process
IV. All liabilities from said first mortgage must be released in favor of current homeowner
Under HAFA’s new arrangement, banks and mortgage lenders must give a final decision on whether to accept or decline this short sale process within 10 business days
There are recent statistics showing that banks already have an immense inventory of close to 1.1 million foreclosed houses.
And there are those who already predicted that both foreclosures and short sales will continue to rise.
The MBA recently said at least nine percent of current homeowners are at least 30 days late on their house payment. And with high unemployment and underwater housing equity, it doesn’t look to get any better any time soon.
A much more pessimistic picture was painted by other mortgage industry analytical companies who put this figure much closer to 5 million consumers who are delinquent or in foreclosure.
The main problem that HAFA is certainly to face is the lack of time or the ability to reach the majority who are facing foreclosure.
St Louis refinance experts also have reported that all banks and lending companies who offered the HAMP or Home Affordable Modification Program must now offer the HAFA federal program to homeowners.
Want to find out more about a St Louis mortgage, then visit Floyd J. Tapia’s site on how to choose the best St Louis loan expert for all of your St Louis lending needs. Or give us a call at 877-334-0210 or 314-334-0210.
categories: st louis mortgage,st louis finance,st louis loan,st louis refinancing,st louis loans,st louis home mortgage,st louis home loan,finance,mortgage,business,real estate,loans,lending,foreclosure
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