Problem Eight

Requirement of Disaster Repair Before Short Sale

Problem

Many lenders, HAMP and HAFA representatives are often unfamiliar with Chinese drywall, sinkholes, and other Disasters

Lenders are not aware of severity and cost of disasters such as Chinese drywall or sinkholes. Most often, lenders instruct homeowners to make costly repairs before a short sale approval will be issued. Most homeowners are unable to pay these costs and may not even be able to continue living in homes that present a health and safety issue. Oftentimes, these homes end up in foreclosure.

Solution

1. Reevaluate lender, HAMP and HAFA criteria of requiring the home to be fixed before a short sale can be approved. 
2. Consider using state Hardest Hit Fund dollars to help underwater homeowners repair Chinese drywall problems, sinkholes and other disaster problems that can be fixed, if homeowner can stay in the home.

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