Tuesday, August 2, 2011

Debt Forgiveness on Short Sales in California

HAFA (Home Affordable Foreclosure Alternative) is a national short sale program adopted by major lenders and servicers that requires subordinate liens to fully forgive borrowers of their debt along with other requirements. Full debt forgiveness is now also required under SB458
for lenders of one-to-four residential unit properties doing short sales in California (unless an exception applies).

"The signing of this bill is a victory for California homeowners who have been forced to short sell their home only to find that the lender will pursue them after the short sale closes, and demand an additional payment subsidize the difference," said C.A.R. President Beth L. Peerce.

Just as in the HAFA guidelines, SB 458 brings closure and certainty to
the Short Sale process and ensures that once a lender has agreed to accept a short sale payment on a property, all lienholders - those in first and in junior positions - will consider the outstanding balance as paid in
full and the homeowner will not be held responsible for any additional payments on the property. HAFA is also the only short sale that helps
the homeowner with moving assistance funds.

Good luck and as always - Keep the faith!

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