(Tax Credit Deadline) Everyone is currently focused on the first deadline to qualify for the tax credit—there must be a fully executed contract by April 30, 2010 (Friday). It is the other deadline that also needs to be emphasized. The actual closing must be completed not later than June 30, 2010. This means that not only does the closing need to occur but the deed has to be recorded by this deadline (June 30 is a Wednesday).
Be sure that everyone involved in the closing knows the transaction needs to comply with the June 30 tax credit deadline. Initially the following suggestions should be considered:
(a) Apply for the loan ASAP
(b) Make sure the lender knows about the deadline and will expedite the loan
(c) Perform all inspections early
(d) Select the settlement attorney immediately ( don’t wait for loan commitment)
There are other suggestions which will be provided in next week’s Tucker’s Tip. Above all, be sure that all the parties in the transaction (lender, realtor, attorney, buyer and seller) continue to communicate with each other to insure that all issues can be addressed and resolved early.
Please contact me if you have any questions.
William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBlaw.com
www.TGBlaw.com
www.TGBlaw.blogspot.com
Apr 30, 2010
Tip 18-2010: Short Sales and HAFA
Short Sales & HAFA) The new Treasury Department guidelines that went into effect on April 5th, 2010 have already been amended. Although it is still too early to determine if HAFA (Home Affordable Foreclosure Alternative) will actually bring some uniformity to the confusing and difficult short sale process, the new changes actually could have a beneficial effect.
The first change increases the amount of relocation expenses the short sale seller can be paid from $1,500 to $3,000. In other words, if the Seller can accomplish a successful HAFA short sale, the short sale lender will pay the Seller $3,000 from the sales proceeds to assist in the Seller’s moving costs. (This $3,000 will be reimbursed to the short sale lender by the Treasury Department)
The second change allows the first lien short sale lender to pay out of the sales proceeds up to $6,000 to the second short sale lender (if applicable) in order for the second to release its lien. The Treasury Department will reimburse the first lender $2,000 ($1 for each $3 paid to the second lien holder).
There are still serious issues with HAFA. For example, the program is voluntary especially for the second lien holder. But if a short sale can be accomplished under HAFA there are significant benefits including that the Seller will be released from all liability for the repayment of the mortgage debt. We recently submitted several HAFA short sale applications and are awaiting the lenders’ responses, including the inevitable lessons learned.
Please contact me if you have any questions.
William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBlaw.com
http://www.tgblaw.com/
http://www.tgblaw.blogspot.com/
The first change increases the amount of relocation expenses the short sale seller can be paid from $1,500 to $3,000. In other words, if the Seller can accomplish a successful HAFA short sale, the short sale lender will pay the Seller $3,000 from the sales proceeds to assist in the Seller’s moving costs. (This $3,000 will be reimbursed to the short sale lender by the Treasury Department)
The second change allows the first lien short sale lender to pay out of the sales proceeds up to $6,000 to the second short sale lender (if applicable) in order for the second to release its lien. The Treasury Department will reimburse the first lender $2,000 ($1 for each $3 paid to the second lien holder).
There are still serious issues with HAFA. For example, the program is voluntary especially for the second lien holder. But if a short sale can be accomplished under HAFA there are significant benefits including that the Seller will be released from all liability for the repayment of the mortgage debt. We recently submitted several HAFA short sale applications and are awaiting the lenders’ responses, including the inevitable lessons learned.
Please contact me if you have any questions.
William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBlaw.com
http://www.tgblaw.com/
http://www.tgblaw.blogspot.com/
Subscribe to:
Posts (Atom)