28th Jul, 2010

Quicker Short Sales for Fredericksburg TX Real Estate

The short sale process should be a little quicker for buyers of Fredericksburg TX real estate than it was before April 5, 2010.  HAFA allows many distressed owners of real estate in Gillespie County (Fredericksburg homes and ranches) and other Texas homes to opt for a short sale or deed-in-lieu of foreclosure if they meet certain qualifications.  Foreclosures may be suspended if any HAFA program borrower applies and is awaiting responses.

By passing the Home Affordable Foreclosure (HAA) program, the federal government set guidelines for standardizing short sales.  Participating lenders are required to offer HAFA options to borrowers in writing.  Loan servicers must also go through some hoops to be sure that the borrowers meet eligibility requirements.  Servicers must also notify borrowers in writing if they are eligible or not for the HAFA program.  If the borrowers are not eligible for a HAFA short sale or DIL, then the loan servicer must tell them why.  At times, the loan servicer may also assist with negotiations on subordinate lien holders.

A short sale is comes about when a homeowner has insufficient equity or money to pay off their debt at closing.  The lender permits the borrower to list and sell the property if the net proceeds from the sale are less than the total amount due on the mortgage.  Hence, the lender is shorted during a short sale.

The other choice is a deed-in-lieu of foreclosure (DIL).  A DIL occurs when “the borrower voluntarily transfers ownership of the mortgaged property to the servicer in full satisfaction of the total amount due on the first mortgage.”  If a serious attempt to list and market a property fails and a DIL occurs, the borrower vacates the property and is eligible for $3,000 relocation assistance.

The HAFA legislation only affects the first lien mortgages not connected with Fannie Mae or Freddie Mac.  The property must be a principal residence.  The loan must be a first mortgage dated before January 2, 2009.  To be eligible, the Texas property owners must be able to qualify for a loan modification.  However, they must be unable to come up with the money to stay in their homes.  The homeowners total monthly mortgage payment must exceed 31 percent of their gross income.

The HAFA legislation creates timelines and mandates that should quicken the process.  For example, if investors execute the short sale or DIL before January 1, 2013, then the Treasury Department offers reimbursements and incentives.  Other timelines in the HAFA wording should speed up the processes.

For more information about relocating, finding country homes with great schools, vacation home investment or a second home, click here to contact Dale Cook or call 830-997-1035.

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