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HAFA – Important Facts for HomeOwners

1. If your  mortgage lender tries to make contact to notify you of your eligibility to conduct a Short Sale under HAFA program and you fail to contact them within 14 calendar days of receiving the notification, your mortgage lender has no further obligation to extend the HAFA Short Sale Agreement (SSA) to you.

2. You cannot participate in a HAMP Trial Loan Modification and agree to a HAFA SS simultaneously.

3. You may be required to make partial mortgage payments until your houme is sold and title is transferred.

4. You must maintain the home and have it available to show.

5. You must pay your association dues and assessments.

6. You must list the property with a real estate agent.

7. You cannot sell your home to anyone related to you or with whom you have a close personal or business relationship with.  Neither you nor the buyer can receive any proceeds from the sale.

8. If you are a real estate agent, you cannot list your own property or receive a commission or any proceeds related to the sale of your property.

9. The buyer of your property must agree not to sell the home w/in 90 calendar days of the date it is sold by you.

10. A 1099C will be sent to the IRS as debt forgiveness.  In some cases, this can be counted as income and be taxed as such.  You should contact the IRS or your tax preparer to determine if you have any tax liability.

11. You are responsible for taking steps to clear all other subordinate liens on the property such as home equity lines of credit and second mortgages.  Your first mortgage lien holder will only allow up to 6% of the unpaid principal balance of each subordinate lien, in order of priority, not to exceed $6000 for ALL liens.

12. The sale of your home may be contingent on mortgage insurer/guarantor approval then you may have to negotiate terms with them as well.

13. Your mortgage will be reported as “Settled for less then full amount” on your credit report.

14. Your mortgage lenders have agreed NOT to pursue you for any deficiency, please make sure you receive that agreement in writing.

15. You will receive an incentive payment at closing in the amount of $3000 for a completed Short Sale under the HAFA program.