The Federal Government Programs enacted in the last 18 months are having minimal impact on the overall Las Vegas Foreclosure market as well as nationally. The programs are just not gaining traction in the market and the impact is just not significant when you take a hard look at the numbers.
Case in point, the $75 Billion (yes that’s “Billion”) foreclosure prevention program has only helped slightly over 100K homeowners in 2009 – which is a drop in the proverbial bucket.
However the good news is the HAFA Program is kicking in April 5, 2010 - HAFA stands for “Home Affordable Foreclosure Alternative” and we do think this program will help homeowners here in Las Vegas. Here are some details:
- Uses borrower financial and hardship information already collected in connection with consideration of a loan modification.
- Allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).
- Prohibits the servicers from requiring a reduction in the real estate commission agreed upon in the listing agreement (up to 6 percent).
- Requires borrowers to be fully released from future liability for the first mortgage debt (no cash contribution, promissory note, or deficiency judgment is allowed).
- Uses standard processes, documents, and time frames/deadlines.
- Provides financial incentives: $1,500 for borrower relocation assistance; $1,000 for servicers to cover administrative and processing costs; and up to $1,000 for investors for allowing a total of up to $3,000 in short sale proceeds to be distributed to subordinate lien holders (on a one-for-three matching basis).
We want to underscore one point, this is a brand new program and won’t be active until the first week in April. But, we believe this will finally have some real impact on our local and national real estate markets.
