LAS VEGAS, May 29, 2013 (GLOBE NEWSWIRE) -- Heartland Coalition – a 501(c)(3) non-profit organization offering the HEART Program – advises distressed homeowners to beware of misleading advertising that guarantees you can stay in your home and/or buy it back after a short sale.
The HEART Program administrator, Alan Cassell notes, "Today, a number of attorneys and real estate agents advertise short sale programs that guarantee homeowners they can stay in their home after short selling to a non-profit and then rent the house back from the buyer. Further, they assure the seller that they can purchase the property back at a discounted price at a later time."
Cassell states, "This is very misleading," as in reality, it is based on working through a non-profit who then relies on a special exemption offered by the Government's Making Home Affordable Program (MHA) and more specifically, the Home Affordable Foreclosure Alternatives (HAFA) Program.
Under HAFA, borrowers receive pre-approved short sale terms from the lender prior to putting the home on the market; however, the very limited special exemption that attorneys are advertising – that allows non-profits to buy a home under the short-sale program and then lease the property back to the homeowner and later sell it back to them – is only granted in 2 to 5% of cases where the bank did not restrict the transaction.
Instead, over 95% of the short-sale approvals will come with an arms-length affidavit that translates into the homeowner having to move out of the house and the non-profit having to sell the home to someone else.
Thus, if your goal is to simply buy back the same house you live in today for a much cheaper price, chances are less than 5% that you will succeed – unfortunately, you are focusing on a factor that is not in your control, your lawyer's control, your negotiator's control or your agent's control – instead, the vast majority of distressed homeowners who enter into agreements with attorneys offering Stay-in-Place and Buy-Back guarantees will still wind-up having to move – even after paying expensive upfront fees as high as $5,000 to $7,000.
What many of the groups that lead sellers into a short sale/repurchase program do not make very clear is that in most cases, the FHA lending guidelines require you to wait three years after your short sale before you can obtain new FHA financing for a mortgage. While there are lenders that have specific programs for those that are subject to a short sale, you should be keenly aware of the very scrutinizing guidelines that you must follow to qualify for and obtain that mortgage financing in the future. "At a 5% success rate, your chances are far from guaranteed," Cassell notes.
"Fortunately, there are better alternatives," observes Cassell. "We want homeowners to be aware that our HEART Program is free and that we offer options and resources that may be more realistic and attainable."
The HEART Program is administered by the non-profit Heartland Coalition which grew up helping people through disasters. Whether it was homes lost from wildfires, jobs lost from downsizing and the recession, or youth at risk from low self esteem and lack of resources, Heartland Coalition has a long track record of helping people rebuild after suffering setbacks.
Heartland's success rate with the hundreds of people it has helped can be attributed to its focus on building resilient individuals rather than narrowly looking to solve an immediate problem. Cassell observes, "It begins with you, determining what your real priorities are." Additionally, he says, "It is very important that there be an educational component to this program in order to better the chances of successful homeownership in the future."
The HEART Program offers counseling and classes to help people clarify their needs and resources. In addition, they can learn strategies and skills that will help them to bolster their economic awareness and become more savvy about investments, including resources from companies that may secure financing and allow for Second Chance homeownership.
Currently, The HEART Program is one of the only non-profit organization programs that – through its partnerships with other local non-profits – offers HUD approved home ownership educational courses and credit rehabilitation courses.
In addition, HEART has the unique ability to offer affordable rental opportunities to program participants in Clark County, should the bank force them out after a short sale. Through its involvement with numerous community stabilization programs and strong relationships with local real estate firms, HEART's parent, Heartland Sustainable Housing has had access to housing inventory. Says Cassell, "It takes years to establish relationships with companies that have such extensive available inventory and the HEART program is fortunate to have that capacity."
"When a distressed homeowner is looking for solutions," Cassell states, "it is important to know the facts and to verify what is being advertised. Ask questions. Know what programs are available and what they offer. Do your best to learn how they can help you with your specific scenario and your priorities."
"In simple terms," he concludes, "It should be free and with no guarantee... (since there is no guarantee) ... and if asked to pay, you should walk away."
About The HEART Program
The HEART Program stands for "Homeowner Economic Assistance and Revitalization Trust." The goal of the HEART Program is to assist homeowners who have experienced extreme financial hardship by helping them to stay in their homes and neighborhoods and to provide numerous options through counseling and educational partnerships that can assist with a variety of housing needs. For more information about the free HEART Program visit www.programheart.com or call 1-888-461-5741.
The HEART Program is administered by The Heartland Coalition, a 501(c) 3 non-profit organization. Heartland Coalition and its Heartland Sustainable Housing division is a San Diego based non-profit organization that works with private and institutional partners to provide distressed homeowners with foreclosure alternative programs and serves as a community resource to provide aid in regaining self-sufficiency through homeowner counseling events and financial management courses. For more information visit www.heartlandsustainablehousing.org.
The HEART Program logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=18978
CONTACT: Alan Cassell Director of Acquisitions and Asset Management Heartland Sustainable Housing (619) 804-4552 firstname.lastname@example.org
Source:Heartland Sustaninable Housing