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On Monday, April 5, 2010, the Obama Administration and the U.S. Treasury Department officially activated the HAFA (Home Affordable Foreclosure Alternatives) program.  The Program - which took effect April 5^th -  offers financial  incentives to borrowers, servicers and investors who utilize a short sale or deed-in-lieu (DIL) to avoid foreclosures.  

·       Servicers (banks, lenders, etc) are prohibited from requiring a reduction in the real estate commission agreed on, which is up to 6 percent

With either the HAFA Short Sale or Deed-In-Lieu, the servicer may NOT require a cash contribution or promissory note from the borrower and MUST forfeit the ability to pursue a deficiency judgment against the borrower.

Lenders participating in the program must also determine the market values of properties early on and inform the owners of just what price they're willing to accept. Then, if owners come back to the lenders with bona-fide offers, they must render a decision within 10 days.

HAFA simplifies and streamlines the Short Sale and Deed-In-Lieu process by providing a standard process flow, minimum performance timeframes and standard documentation.

In simpler terms, HAFA helps people quickly sell their homes by giving them pre-approved short sales terms before listing the property. They are fully released from future liability for the first mortgage debt, and can receive $1,500 for borrower relocation assistance. Investors and servicers can also receive financial assistance through the program for administrative costs, processing fees, etc. The program sounds simple, but is actually quite complex with many guidelines and rules.

Short Sellers need to be prepared !!   click on this link to go to the HAFA Website

http://www.whatishafa.org/index.html

The EPA (Environmental Protection Agency)has new Renovation, Repair and Painting Rules that takes effect today April 22, 2010. It effects anybody remodeling or renovating a home built prior to 1978 and requires that this work be done by professional contractors who are certified by the EPA to mitigate the potential hazards of lead-based paint.  This means it is going to cost you more money guaranteed unless of course you do it yourself because you are exempt as a private citizen.  Isn't that convenient?  What is the purpose of protecting everything if a pro contractor does the work but if you do it it doesn't matter? 

You might think it isn't a big deal but look at these numbers:  If you renovate, repair or remodel more than 6 (yes that is just 6) square feet inside or 20 square feet outside (that is a 5' x 4' area for the mathematically challenged) then a man in a moon suit has to tent off your home and protect the world from the construction dust. 

You think this won't add to the cost of a project?  A window installer told me that to just change a window in a bedroom means the room has to be sealed off, the exterior of the whole wall on the home must me tented (requires scaffolding) and any dust / debris has to be cleaned using special vacuums; finally the waste must be removed via "hazardous waste disposal".  He estimates it will double labor costs.  "This could add $5,000 to $10,000 of additional expense just to replace the windows in a home".

By the way, if you own rental properties in Boulder, City Council is trying to push through an energy efficiency plan that would require you to replace windows, re-insulate, replace furnaces, hot water heaters and appliances with energy efficiency models.  They estimated the average cost to an owner would be about $3,000.  Guess what?  They didn't account for the additional cost from the new EPA Rule.  My guess is that if you own a rental property in Boulder and this rule goes into effect you could get a demand from the City that might cost you as much as a years worth of rent!

The good news is nobody will die from lead or freeze to death in the winter but it might not matter when you are broke from the governments incessant desire to protect us from ourselves.