Consumers have been bombarded with daily news about what Washington is doing today to save our economy from this sagging real estate market.
Much to the chagrin of banks, short sales are getting more and more publicity and the financial blessings of being used to avoid foreclosure altogether.
One positive aspect of a short sale is that it allows consumers to leave their house while avoiding a foreclosure type entry on their credit report.
This alternate step also saves money for the bank holding the property compared to taking and selling houses through the foreclosing process.
Although St Louis finance experts would readily agree that banks would welcome this viable option with open arms but nothing could be further from the truth.
This apathetic attitude may be due to the fact that short sales take a longer period of time to be completed with the average taking 60 days or longer.
Another problem banks and lenders run into is that in many cases, there are other liens being held on a property which again can be costly.
With feeling the financial pinch and loss of business, the National Association of Realtors strongly urged the U.S. Treasury Department to come up with a new program designed to primarily encourage the use of short sales.
The new kid on the block came to known as HAFA or the Home Affordable Foreclosures Alternatives which went into effect April 5, 2010.
There are four main aspects to HAFA’s terms for short sales:
I. There are strict deadlines that all parties must meet
II. Financial inducements – Incentives will include $3000 assistance for moving costs for homeowners; $1500 for mortgage servicers; and up to $2000 for mortgage security investors who give up to $6000 of the selling proceeds to other lien holders
III. Allow current loan holders pre-approval for short sale terms before listing of any said properties
IV. By requiring that homeowners be fully released from future liability for the first mortgage debt
Banks and lenders have 10 business days to decide whether they will approve or deny this short sale application process for said consumer according to the St Louis finance review.
At this moment, there are over 1.1 million homes that have been foreclosed upon according to housing statistics.
And there are those who already predicted that both foreclosures and short sales will continue to rise.
The fourth quarter of 2009 also showed grim news. Close to nine percent of homeowners were in default on at least one payment according to the Mortgage Bankers Association.
Other mortgage industry data companies place the figure closer to 4.8 million that are delinquent or may already be in the early stages of the foreclosure process.
The main problem that HAFA is certainly to face is the lack of time or the ability to reach the majority who are facing foreclosure.
St Louis refinance experts also have reported that all banks and lending companies who offered the HAMP or Home Affordable Modification Program must now offer the HAFA federal program to homeowners.
Looking to find the best deal on a St Louis finance loan, then visit www.StLouisRefinancingGroup.com to find the best St Louis home mortgage advice on a St Louis loan for you and your family. Get your questions answered by calling us at 877-334-0210 or 314-334-0210.
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