We are frequently asked, "What is a short sale?" A short sale is when you sell your home if you owe more than its worth and you can't afford to make the payments. If you consider what it was like to qualify for the mortgage loan in the first place, now you have to qualify in reverse... that you cannot afford to continue paying. Many homeowners have found their homes reduce in value to a point where they owe more than it's worth. A short sale can be a possible way to unload it.
Effective yesterday, the short sale process has been simplified under the Home Affordable Foreclosure Alternatives program, or HAFA, which gives $3,000 to borrowers for relocation assistance, $1,500 to servicers for administrative and processing costs, and up to $2,000 to investors who allow up to $6,000 in short sale proceeds to be distributed to subordinate lien holders. The program was created to help stabilize distressed inventory and create an alternative to undervalued homes facing foreclosure.
The National Association or Realtors is offering webpage with information on how HAFA works at: www.realtor.org/shortsales
The U.S. Treasury Department guidelines and forms (updated March 26, 2010): https://www.hmpadmin.com/portal/programs/foreclosure_alternatives.html.
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