The Law Offices of Nathan Pinkhasov, PLLC processes and negotiates HAFA and non-HAFA short sales to help homeowners avoid the dangers and long lasting consequences of foreclosure or bankruptcy.

Home Affordable Financial Alternatives Program (HAFA)

In a short sale, the servicer allows the homeowner to list and sell the mortgaged property with the understanding that the net proceeds from the sale may be less than the total amount due on the first mortgage.

To help homeowners who are unable to keep their homes under the Home Affordable Modification Program, the HAFA program may make a short sale or a deed-in-lieu of foreclosure a viable option to help them avoid foreclosure. The HAFA Program, which took effect April 5, 2010, provides servicer, seller and junior lien holder incentives for these transactions and is designed to simplify and streamline use of short sales and deeds-in-lieu of foreclosure.

Under the program, a homeowner can receive $3,000 to help with relocation costs after a successful short sale closing or deed-in-lieu. If there are liens and encumbrances in addition to the first mortgage, the borrower must obtain lien releases from those creditors—under HAFA, homeowners can receive up to $6,000 of assistance to release those liens. The benefit of a HAFA short sale is that you are no longer responsible for the difference between what you owe on your mortgage and the amount that your home sells for.

Eligibility

You may be eligible to apply if you meet all of the following:

• You live in the home or have lived there in the last 12 months.
• You have a documented financial hardship.
• You have not purchased a new house within the last 12 months.
• Your first mortgage is less than $729,750.
• You obtained your mortgage on or before January 1, 2009.
• You must not have been convicted within the last 10 years of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction.

Program Availability

HAFA is available for mortgages that are owned or guaranteed by Fannie Mae and Freddie Mac or serviced by over 100 HAMP participating servicers.

The most common disqualifying circumstance is a second mortgage or additional liens, such as contractors' liens, judgment liens, or municipal liens. Depending on the amount of the lien, the lender may be willing to negotiate with the lien holder to accept a reduced payment. The borrower would be responsible for that payment. The lender has no obligation to negotiate or to pay off lthese iens. In a foreclosure, all liens recorded after the foreclosed mortgage was originally recorded are wiped out; in a short sale transaction, like any other sale of real estate, they must be paid off at closing.

Many non-participating lenders have short sale programs and even participating lenders have programs for borrowers who don't qualify for the HAFA program. However, the terms are not guaranteed to be as favorable as those under HAFA so the borrower must ensure that all further liability ends with the sale or negotiate a specific payment to be delivered at closing.

SHORT SALE CHECKLIST

BORROWER

1. Authorization signed and dated allowing firm to speak to lender
2. Copies of most recent mortgage statement(s) and/or copy of summons and complaint indicating a foreclosure
3. Copy of 2 most recent tax returns with signature on 2nd page of 1040
4. 2 months of pay stubs for all borrowers or Profit & Loss if self-employed
5. 2 utility bills (heat, gas, electric, landline)
6. Letter indicating hardship and why borrower cannot continue to pay loan

BUYER

1. Mortgage Pre-approval letter or proof of funds (if all cash)

REALTOR

1. Listing agreement
2. Offer sheet
3. MLS Listing

WHAT TO EXPECT…

BEFORE SUBMISSION OF PACKAGE:

• Attorney will meet with borrower and explain process of short sale;
• Attorney will get necessary paperwork from Borrower signed and dated;
• Attorney will alert Bank and/or foreclosure attorney of short sale;
• Attorney will meet with realtor to obtain all necessary information including listing agreement and sales data sheet; 
• Attorney will order pay offs; and
• Attorney will prepare package and submit to necessary parties (bank(s) and/or foreclosure attorneys).

AFTER SHORT SALE PACKAGE IS SUBMITTED:

• Attorney will coordinate appointment between borrower and bank appraiser;
• Attorney, if needed, will obtain a second appraisal to counter bank appraisal report; 
• Attorney will negotiate with bank as to sale price; and
• Attorney shall provide end result to both borrower and realtor and discuss amicable resolution and closing date.