Short Sales More Likely to Speed Up Bank Losses

The new HAFA Program

HAFA, the Home Affordable Foreclosure Alternatives will start in April. This new effort is a response to the limited successes of the HAMP program otherwise known as the Home Affordable Modification Program.

"The administration wouldn't want to categorize it this way, but HAFA is an acknowledgement that a lot of loans won't meet the criteria for a HAMP modification -- even a trial one," said Rick Sharga, senior vice president at RealtyTrac, which compiles data on foreclosures.

According to RealtyTrac, foreclosure filings are expected to hit up to 3.5 million homes in 2010. There were a record 2.8 million homes with at least one foreclosure filing in 2009, the firm recently reported. Foreclosure activity will likely remain high until at least the end of 2012.

"HAMP hasn't worked," Nancy Bush, president of bank industry research firm NAB Research, said. "It's just a massive expense of time and money". In a recent meeting with Wells Fargo, Bush noted that Wells Fargo has 15,000 people working on HAMP. She asked executives at Wells Fargo when they thought the program may end.

"They just shrugged their shoulders and said maybe never," Bush said. "The expense of that is huge. HAMP may turn out to be the most expensive thing the banking industry has ever done."

The HAFA Program

Under the HAFA program, if a homeowner doesn't qualify for the HAMP modification program, they must be offered a short sale. Homeowners can also be offered a deed-in-lieu of foreclosure. Borrowers will receive $1500.00 to help them move to a new home.

If you would like more detailed information on this program and how it can benefit you as a buyer or homeowner, please visit this area of our blogsite.

http://www.charlotterealestateforeclosures.com/0052BF