The program was outlined at a recent National Association of Realtors conference where the NAR reported that 12% of all recent home buyers purchased their home through a short sale.
"Realtors from across the country are telling us that the current short sales process is time-consuming and cumbersome, discouraging buyers who would otherwise want to purchase a home in a short sale," said NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz. "As the leading advocate for home ownership and housing issues, NAR has been urging lenders and service providers to approve reasonable short sale offers that allow home owners to avoid foreclosure when a family is absolutely unable keep their home."
HAFA includes uniform procedures, standards forms and deadlines, but its success depends on effective service provider implementation and the cooperation of investors and subordinate lien holders, Golder said. Lenders have been criticized for cumbersome and confusing short sale processes.
JK Huey, senior vice president, Wells Fargo Home Mortgage REO and Short Sale, addressed some primary concerns and myths surrounding these transactions.
"There are a number of decision-makers involved in a short sale, and the more parties involved, the more complex the process becomes," said Huey. "It's important to keep in mind that this is not a typical buy-sell transaction. Our Realtor partners' expertise helps us deliver timely solutions to assist customers, minimize losses to investors, and help to rebuild and stabilize our communities."
To address concerns related to the short sales process, Wells Fargo has increased staff resources by 57% over the past 12 months, implemented proactive marketing efforts to provide information and education on short sale workout alternatives to its customers, and worked with legislators and government agencies to help streamline processes.
Laurie Maggiano, director of policy for the U.S. Department of the Treasury's Office of Homeownership Preservation, explained how homeowners in need benefit from HAFA. HAFA provides $3,000 relocation assistance to homeowners after a successful closing and requires that the homeowner be fully released from future liability for the primary mortgage and also any subordinate liens.
"HAFA offers additional foreclosure avoidance options when other home retention options have been exhausted," said Maggiano. "Being proactive can only positively impact the home owner's ability to buy a home in the future. For example, Fannie Mae will allow a home owner to be considered for a home loan within two years of a short sale, whereas a homeowner who goes through a foreclosure will need to wait seven."