Not a day goes by where we don't read of new programs being instituted to help rid our economy of foreclosures and frustrated properties.

Much to the chagrin of banks, short sales are getting more and more publicity and the financial blessings of being used to stay away from foreclosure altogether.

One positive aspect of a short sale is that it allows customers to leave their house while eliminating a foreclosure type entry on their credit report.

Plus, the short sale can do much for the bank by aiding them save money rather than going the more expensive procedure of foreclosure.

Most St Louis mortgage owners would think that that in itself should make them a bankers preferred option. But surprisingly it is not.

As a rule of thumb, shorts sales on the average can take 2 months or longer to be accomplished which can become bothersome to both banks and home owners.

Another issue banks and lenders run into is that in many cases, there are other liens being held on a property which again can be expensive.

With feeling the financial pinch and loss of business, the National Association of Realtors strongly urged the Treasury Department to developed with a new program designed to primarily promote the use of short sales.

The new kid on the block came to known as HAFA or the Home Affordable Foreclosures Alternatives which went into effect April 5, 2010.

There are 4 main aspects to HAFA's terms for short sales:

I. Strict deadlines for specific areas of the process

II. Financial inducements - Incentives will include $3000 assistance for moving costs for householders; $1500 for mortgage servicers; and up to $2000 for mortgage security investors who give up to $6000 of the selling proceeds to other lien holders

III. Before any listing of said assets occurs, consumers must be permitted pre-approval status for the short sale process

IV. By requiring that homeowners be totally released from future liability for the first mortgage debt

Banks and lenders have 10 business days to decide whether they'll approve or deny this short sale application process for said consumer based on the St Louis finance review.

There are recent statistics showing that banks already have an immense inventory of near 1100000 million foreclosed houses.

In fact, the numbers heading for foreclosure or the short sale process will be steadily rising.

The Mortgage Bankers Association (MBA) said more than 9% of homeowners were behind at least one payment on their St Louis loan in the 4th quarter of 2009.

This number pales in comparison to what other mortgage statistical providers report. They say the number is actually close to 5 million who are either behind or already in foreclosure.

The issue that HAFA faces is that their financial program can not assist many of those houses facing this dilemma.

St Louis mortgage lenders who have actively participated in the federal government's effort to support mortgage relief for distressed property owners with (HAMP) the Home Affordable Modification Program are also required to participate in the new HAFA program too.

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