Will HAFA help speed up short sales?

It remains to be seem if the new HAFA program for short sales, which started April 5, 2010, will speed up short sales. Short sales were already speeding up a little on their own because lenders finally seemed to realize that with home prices nosediving, out of sheer self-interest, it was best to be less rigid on the prices they accept for a short sale.

Some key points of the new HAFA short sale program:

1. Bad: The short sale seller must first apply for a loan modification under HAMP (that alone may stop many owners from using the new program).

2. Good: If approved for a HAFA short sale, there can be no deficiency claim against the seller.

My prediction is that the HAFA program will do little to speed up short sales due to the fact that short sale sellers will not want to march through the HAMP loan modification swamp first.

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