There is another new Federal Government program out their designed to reduce the consequences and liability of people trying to avoid foreclosure by selling their homes as short sales, or else voluntarily giving up their homes with a Deed in Lieu of Foreclosure. This program is called the Home Affordable Foreclosure Alternatives Program. Say that five times fast.
This program will be implemented on April 5th. It is supposed to “streamline” the short sale process, and remove the ability for banks to seek a deficiency judgement for the amounts they are actually owed from the borrowers. According to the official HMPadmin website:
The Home Affordable Foreclosure Alternatives (HAFA) Program provides additional options to avoid costly foreclosures and offers incentives to borrowers, servicers and investors who utilize a short sale or deed-in-lieu (DIL) to avoid foreclosures.
With either the HAFA short sale or DIL, the servicer may not require a cash contribution or promissory note from the borrower and must forfeit the ability to pursue a deficiency judgment against the borrower.
HAFA simplifies and streamlines the short sale and DIL process by providing a standard process flow, minimum performance timeframes and standard documentation.
More details are available at this the official site: HMPadmin: Foreclosure Alternatives.
While personally I think it is wrong for Government to relieve individuals of the responsibility of paying back debt they rightfully obtained, this should be a good thing for the housing market and real estate industry. Lengthy short sales are a huge problem with the way real estate works, and if that can somehow be shortened, Utah Real Estate transactions will be far less complicated.