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A nonprofit advised distressed homeowners to beware of misleading claims concerning short sale programs that guarantee owners they can stay in their home and buy it back later at a discounted price.
[IMAGE]The ""Heartland Coalition"":http://programheart.com/, which offers the HEART program, said that such short sale programs have a very small likelihood of receiving approval.
According to HEART program administrator Alan Cassell, programs that claim to guarantee homeowners can stay in their home or buy it at a discount after a short sale to a nonprofit are ""very misleading.""
The short sale programs rely on a special exemption offered by the government's Home Affordable Foreclosure Alternatives (HAFA) program.
[COLUMN_BREAK]Through HAFA, an exemption can be made to the arm's length rule for short sales. While most transactions must be between parties who do not have a relationship, HAFA allows nonprofits to buy a home via short sale and then lease or sell the property back to the homeowner if the bank approves and all HAFA guidelines are met.
According to Heartland, this exemption is granted in 2 to 5 percent of cases where the bank did not restrict the transaction. In most cases, the nonprofit says homeowners actually end up moving out of the house and the nonprofit sells the home to someone else.
When homeowners seek solutions for their mortgage program, Cassell offered simple, straightforward advice, stating, ""It should be free and with no guarantee... (since there is no guarantee) ... and if asked to pay, you should walk away.""
The nonprofit also promoted its own free solution known as the HEART Program.
The program offers counseling and classes to help homeowners identify needs and resources and teaches them to become more financially literate and savvy about investments.
HEART also offer affordable rental opportunities to program participants that lost their home through a short sale in Clark County, Nevada.
