I am in the process of working with Wells fargo to short sale my home. i want to get out immediately but they say I have to have my home on the market for 120 days. I wish I could do the HAFA but but I have a FHA loan.Why doesnt that qualify?

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FHA and VA Loans do not qualify for HAFA.  With an FHA insured loan a FHA Pre-Foreclosure Sale is the route for a Short Sale.

http://www.hud.gov/offices/hsg/sfh/nsc/rep/pfsfact.pdf

 

Kevin M. Lancaster - Willson - Realtor, SFR 

SC License # 31391

Keller Williams Realty

700 Airport Rd.

Greenville, SC 29607

Main Office: (864) 234-7500

Cell: (864) 485-9283 (call or text)

Fax: (864) 968-1779

Kevin@KevinSellsTheUpstate.com

http://www.mlsfinder.com/sc_ggar/kevinwillson/ - Greenville, SC MLS Search

www.KevinSellsTheUpstate.com

http://shortsalesuperstars.com/profile/KevinMWillson

 

Because the FHA has their own short-sale program--the Preforeclosure Sale Program (PFSP).

HAFA was based on PFSP.  Treasury added their own fatal flaws to the already flawed FHA/PFSP, thereby ensuring that HAFA would be even less successful than PFSP.

The FHA PFS Program is actually pretty straightforward IF you get accepted into the Program.  The only real hiccups in my opinion are a Fair Appraisal and any possible Jr. Lien(s) as the amount they will generally only pay towards them out of the NET is $2500, but another party can contribute additional $$ according to HUD.

 

 

Kevin M. Lancaster - Willson - Realtor, SFR 

SC License # 31391

Keller Williams Realty

700 Airport Rd.

Greenville, SC 29607

Main Office: (864) 234-7500

Cell: (864) 485-9283 (call or text)

Fax: (864) 968-1779

Kevin@KevinSellsTheUpstate.com

http://www.mlsfinder.com/sc_ggar/kevinwillson/ - Greenville, SC MLS Search

www.KevinSellsTheUpstate.com

http://shortsalesuperstars.com/profile/KevinMWillson

 

@Kevin  These are two of the flaws in PFSP.  Another major one is that PFSP pretty much removes the incentive for the seller to sell.  After you get the ATP, the financially best strategy for a seller is to delay as long as possible while fulfilling "good faith", then proceed into the endless FHA-DIL process.

The failure rate is too high for PFSP.  Over two years, I think I have 8 or so failures, five being PFSPs, with high appraisals and still in the DIL process.

Eg.  A $131K appraised value, with market value of perhaps $110K, long outside of the marketing period, that has been in DIL-purgatory for over six months.  The sellers have moved out-of-state, with the property going into its second Connecticut winter. 

In my opinion, the FHA should be taken out of the sales and property management business.  They may know how to give money away, but they sure don't know how to get some of it back.

@Mike - I've had different successes with the FHA PFS Program.  I've closed 5 after the issuance of an ATP with no DIL or FC. Challenging yes, but most SS are.  I much prefer them to a VA Compromise Sale or a HAFA SS.

I think someone is not understanding the situation. HAFA usually sends out a Short Sale agreement and the time frame for that is only 120 days. If you sell you home during that time at the agreed on price then you close and move on. You do not have to market it for the entire time. But since FHA and VA are a horse of a different color you need to be specific about the program, for those types of loans.  I would call them back and talk to a different person.

Connie in California

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