Short sales provide better solution for families and communities

The federal Home Affordable Foreclosure Alternative (HAFA) program began several weeks ago and already many REALTORS® are noticing a difference when handling short sales, according to Alex Charfen, co-founder and CEO of the Distressed Property Institute.

HAFA is a government-sponsored initiative overseen by the U.S. Treasury Department and administered by Fannie Mae. It assists all Home Affordable Modification Program (HAMP)-eligible homeowners in avoiding foreclosure, specifically through short sales or deeds-in-lieu of foreclosure.

“This is the first government program that gives incentives for short sales and lays down the process for short sales,” Charfen said. “More importantly, HAFA has brought more attention to short sales and that means banks, REALTORS® and the government are paying attention to short sales.”

REALTORS® should see the benefits of HAFA. “Many times REALTORS® spent time educating the consumer with little or no support. With the government stepping forward on this issue, it puts short sales in the forefront,” he said. “We’re already seeing banks that have added staff to process short sales and they’re stepping up the process so it doesn’t take as long.

“Short sales are so much more beneficial than a foreclosure. Previously we saw seven out of 10 properties in foreclosure were never listed,” Charfen added. “With a short sale, it offers a dignified solution to a family in financial crisis. You see less deterioration in the homes, less property values falling and it helps the overall community. With every foreclosure in a community, we can see property values for surrounding properties decline as much as nine percent.”

“HAFA has been a long time in coming,” he continued. “It’s been a huge collaborative effort with the government and many other organizations. There is no silver bullet to solving the foreclosure crisis and there’s no question that we’re going to continue to see increases in defaults. HAFA offers the real estate market a change to move forward and stop the decline in property values.”

For more information about HAFA visit the National Association of REALTORS® website at realtor.org.