On April 5th, eligible buyers will be able to benefit from a new government program– Home Affordable Foreclosure Alternatives (HAFA)– which aims to speed up and standardize the short sale process by providing financial incentives to lenders to do more short sales.
The program will also make it easier for buyers to negotiate a distressed-property bargain.
According to the Wall Street Journal, prior to this new program, a bank would order an appraisal or broker’s price opinion (BPO) when a distressed seller brought a potential buyer offering less than the amount owed on the loan.
Now, with the new federal rules, banks will order a BPO before a property is listed for sale. Banks will also share with sellers the minimum net proceeds they are willing to accept. A lender must accept an offer within 10 days, if the seller has a buyer with an offer equal to or greater than the pre-approved amount.
Despite the fact that sellers are supposed to provide clear title under HAFA, because many distressed properties come with financial burdens, buyers are warned that they must clarify in their contracts that they will not be responsible for any of the seller’s unpaid property taxes, liens or second trusts.
Read the entire Wall Street Journal Article here.Special thanks to Michelle Gregor of Western Title & Escrow for providing this information. 1215 NE Baker, McMinnville, OR 97128, (503) 472-3154, fax (503) 472-8664