• A short sale is when the lender agrees to accept less than the amount owed on the mortgage instead of foreclosing.  Many homeowners and REALTORS® have expressed their frustrations in the short-sale process, criticizing lenders for the amount of time it takes to process and approve a short sale. 

• The HAFA program simplifies and encourages short sales and deeds in lieu of foreclosure.  It will permit pre-approved short sale terms before a property is listed; release borrowers from future liability for the debt; provide financial incentives to borrowers, servicers, and investors; and prevent servicers from attempting to reduce real estate commissions established in the listing agreement as a condition for short sale approval.?

• Under terms of the program, the borrower and/or listing broker have three business days to submit an executed purchase offer and the servicer has 10 business days to respond

• The servicer also will determine the minimum net proceeds for a short sale.  If an offer presented to the servicer by the borrower or listing broker meets the net proceeds requirement, then the servicer must accept it.?This could be a sticking point! An offer is the current market value, but many banks dont see it that way!

The program currently is available only for non-Fannie Mae- or Freddie Mac-owned loans up to $729,750 and is scheduled to take effect April 5, 2010.  However, C.A.R. expects that many lenders will choose to implement it before the deadline