If your home loan is stil under water despite the massive price appreciation, then it might be wise to consider a Short Sale.
As part of a Bank of America (BofA) Short Sale on your San Jose Home, the bank will insist on a HAFA Affidavit which is signed by both buyers and sellers which is intended to prevent Short Sale fraud.
This HAFA Affidavit is given by the Seller(s) and Buyer(s) to the Servicer of the mortgage loan secured by the Property (“Mortgage”) as part of the Short Sale that to the best of each signatory’s knowledge and belief the following information is true: as follows:
(1) The sale of the home is an “arm’s length” transaction, between Buyer(s) & Seller who are unrelated and unaffiliated by family, marriage, or commercial enterprise;
(2) Neither the Sellers(s) nor the Buyer(s) will receive any funds or commissions from the sale of the Property except to the extent the Seller(s) receive a relocation assistance payment approved by the Servicer and reflected on the HUD-1 Settlement Statement;
(3) There are no agreements, understandings, contracts, or offers relating to the current sale or subsequent sale of the Property that have not been disclosed to the Servicer;
(4) Except as disclosed to the Servicer, there are no agreements, understandings, or contracts between the Seller(s) and Buyer(s) that the Seller(s) will remain in the Property as a tenant or later obtain title or ownership of the Property.
(5) All amounts to be paid to any person or entity, including holders of other liens on the Property, in connection with the short sale have been disclosed to and approved by the Servicer and will be reflected on the HUD-1 Settlement Statement;
(6) Any person receiving relocation assistance is required to vacate the property as a condition of the sale. Further, the Seller(s) represent that all persons receiving relocation assistance (i) occupied the property as a principal residence on the date the Seller(s) submitted the request for short sale assistance to the Servicer, and (ii) are either the Seller(s), a tenant, or a legal dependent, parent of grandparent of the Seller that occupied the property rent-free.
By signing this HAFA Affidavit, both parties to the sale agree that all representations, warranties and statements made herein will survive the closing of the short sale transaction. Also, both parties agree that they represent that the information provided herein is true and accurate and authorize the Servicer to disclose such information to the U.S. Department of the Treasury or other government agency, Fannie Mae and/or Freddie Mac, and any of their respective agents, in connection with the Making Home Affordable program.
Contact us if you have any questions about BofA