I have a few soldiers being relocated for the military. Has anyone experienced this program? Or are there other government programs to assist in the handling of upside homes? How does the process work? Do we submit a normal short sale package to the bank and let them know we're looking for this program approval, like HAFA? I read somewhere the they won't pay for Realtor's commissions? Any information or experience is greatly appreciated! Thank you!
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Jennifer,
Based on my recent experiences with the HAP program (3 in the last 6 months) - I would highly recommend that you not use HAP in conjunction with a short sale. The HAP program is more likely to assist the transferee through their "foreclosure benefit". Our process looks like this at this point. List the property, obtain an offer, submit it for short sale, and if necessary offer a promissory note to close the transaction knowing that HAP will pick up the tab on the prom note.
When I was originally handed these files I thought it was a gift and that the banks would rush the file through because they are getting more than market value for the homes because of the HAP participation. The exact opposite is true, the banks don't have a process to handle more than market value and so the files take even longer because they have to be escalated through the chain of command so many times.
Secondly, HAP is difficult in a short sale because the banks have their delegations and HAP has their delegations and getting the two to line up often means that someone has to defy the operations manual to accomodate the transaction. It isn't impossible to accomplish but is considerably more work and hassle and it will add additional time to the transaction than if you had simply submited the file as a short sale.
Good Luck!!
Cameron Piper
Coldwell Banker Burnet
licensed MN Broker
Jennifer Klein said:
I currently have two HAP short sales underway. Yes short sales.
In the first the seller refinanced a couple of times and rolled in their closing costs. The program only pays the difference between the current sale price and the purchase price. The seller has additional indebtedness because of the refinancing and closing costs but no money to bring to the closing. Enter the short sale.
The second is for a seller who is considerably behind on the mortgage. The HAP guidlines specify that they will not pay late fees or accrued interest on a mortgage. The trick with this one will be getting Wells to understand that they need to forgive late fees and interest owed (in essence shorting the mortgage) to avoid a traditional short sale where they will lose hundreds of thousands more.
Jennifer if you find any of your sellers in a similar situation you may need to work a short sale in conjunction with HAP contributions. Be aware however that they will tell you that the program does not work with short sales and/or sellers who are behind.
Cameron Piper
Coldwell Banker Burnet
I am unsure of any specific programs but I did a Short Sale with Citi handling it through the regular process and nothing was different. They just showed their military orders to relocate as part of the hardship and it closed in a reasonable time with full waiver or liability and all standard fees were paid by the lender such as commission, attorney fees, title etc. At the time we researched various programs but nothing seemed to be very helpful. I still believe the regular Short Sales seems to be the best way in many cases. Once you start giving over control with third parties depending on the programs it tends to complicate it. Just my experience but I have had various types of Short Sales and the standard deals seem to work out the best overall. Can't ignore the programs especially if they have benefits to the seller..
Good to know about HAP moving forward in case I come across the same situation. That is if it is available in that situation. Military clients have been rare in my dealings so far.
Good info though.
I'm not sure about the variations within the program and eligibility, but we closed one about 45 days ago. The real issue for us was the processing time. My understanding is that processing is handled at the state level and not the federal. Here in California the HAP web-site stated that we should expect a wait of up to 60 days for approval. Turned out it was 9 months because their staff was simply slammed with too many files.
It got done but not without a lot of pain on the sellers part because they had to remain current on the property we were selling and had to pay their rent back in NC for a while.
You might want to check with your state HAP office to see what they estimate the processing time to be.
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