The main differences under the HAFA short sale that affect borrowers is the following:
- No Occupancy Requirements – The borrower need not prove that the residence is their “primary residence” as defined under the Making Home Affordable rules. The only restriction is that the borroewer may not have purchased a primary residence in previous 12 months.
- The 31% Ratio No longer Used – Mortgage payments are now permitted to exceed the 31% of gross monthly income if the borrower is current on their mortgage
- Second Mortgage Paid $8,500.00 – Secondary lienholders (depending on investor) must now be paid $8,500.00 from the first lien holder
- Relocation Assistance – Seller/Borrowers must receive relocation incentices up to $3,000.00 (depending on investor and type of loan, and if occupied by the Tenant may receive the incentive $3,000.00
- Credit Bureau Reporting – Short Sale lender will now report the paid off account as account status code “13” which is account paid or close/account zero balance or code “65” account paid in full.foreclosure stated” as applicable.
Rules are also more lenient regarding whether the Short Sale is a result of a divorce, downsizing, as well as requriements regarding income reporting.
Of equal importance, is how the short sale and capital gains are being forgiven in the eyes of the IRS when the 1099-C is reported.
For up to the minute Short Sale information and to have you qualified, call THE LAW OFFICES OF JACQUELINE SALCINES, ESQ.
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