The HAFA program has some new guidelines to help streamline the Short Sale Process. Russ DeMott, a Summerville, SC real estate attorney, has an excellent post on the subject. He says “the new federal guidelines seek to eliminate many of the barriers that have often derailed short sales. Banks will have a time limit to approve an offer, the claims of subordinate lenders (2nd mortgage holders) have been capped, and borrowers will be released from the remaining debt—at least on first mortgages.”

The time constraint on the lenders is a welcome change as the process was developing into a cottage industry for skilled negotiators, but well worth their expertise and time.

Short sales are usually considered pre-foreclosure sales and necessary to delay the foreclosure. It is important that the home owner talk to the lender as soon as possible to get the short sale process started. There may also be an alternative to an actual forclosure on a home. Talk to a bankruptcy attorney as soon as possible to see what the options are.

Read more from Russ DeMott on this subject at his site Charleston Real Estate Blog.