April has a lot of important and semi-important dates in it. The tax deadline, Good Friday and Easter are just a few. What is April 5th, though, and what does it have to do with Southern New Hampshire homes for sale? Well, the biggest news is that the government has stepped into real estate and short sales.
While home sales are up nationally and locally, partially due to the Obama administration’s efforts with the first-time buyer’s tax credit, many homebuyers seem to be waiting for a better interest rate or to see if home prices will drop more once the tax credit expires at the end of this month. Meanwhile, owners with Southern New Hampshire homes for sale are preparing for the spring selling season, without any idea whether they’ll actually be able to sell or not.
Part of the reason for this situation is because of the depreciated housing values. For instance, many potential buyers want to take advantage of the repeat buyer’s tax credit, but can’t. They currently own a home that’s facing foreclosure, are trying to sell that home, but can’t because it’s underwater. This is slowing the recovery of the whole market.
The government’s solution is short sales. There’s always been the option for those facing foreclosure to apply for short sale instead, but (thanks, in part, to the many scams out there) few choose this option. The Obama administration has decided that, if they can’t help with foreclosure, they’ll pay people to accept short sale.
As of April 5, 2010, the government is encouraging delinquent borrowers who can’t be helped through loan modification programs to go through a streamlined short sale process. Many potential short sellers have gotten offers the lenders won’t agree to, which this program called HAFA (Home Affordable Foreclosure Alternatives) is geared towards fixing. Here’s how:
· The servicing bank gets $1,500 for administrative & processing costs.
· The homeowner gets $3,000 in relocation assistance.
· The investor is given up to a $2,000 match for allowing a total of up to $6,000 in short sale proceeds to be distributed to junior lien holders (up to 6 percent of the remaining balance of each junior lien).
Even with this program, lenders are wary of short sales. Depending on the price of the short sale, there’s a possibility that lenders could lose a large amount of money. However, under the new program, real estate agents will be working with participating lenders to determine the value of the home and what the minimum price should be. If the short sale offer meets or exceeds that minimum, the lender has to accept it.
The hope is that this program will slow the tide of foreclosures, free homeowners up to become repeat buyers, sell more homes and, ultimately, improve the flow of the real estate market. The good news about all this is if the program does even a quarter of what the administration plans, there may not be enough Southern New Hampshire homes for sale to go around!
Have questions about the new HAFA program or any other real estate incentive programs? I’m happy to answer your questions. Give me a call now at 603-821-1134 or email me at Dave@DaveHeeter.com.
No comments:
Post a Comment