Can a Bank set their own HAFA Program Guidelines?!!!
Hello,
We have been negotiating a Short Sale that had originally both mortgages with Homeward Residential. Now, the 2nd was transferred to Real Time Resolutions, Inc.
Homeward approved the Short Sale and only pays 10% of the principal balance to the Subordinate Mortgage. The person in charge of the file at Real Time Resolutions, Inc. came back, and refused, after the previous negotiator accepted it the 10%, to issue Short Sale Approval until the 1st give them $ 8500.00 as this Short Sale is under HAFA program.
We came back to Homeward and requested the $ 8500.00 to the 2nd lien and the answer of the negotiator was that Homeward HAFA guidelines was to only pay 10% and they will not reissue their approval.
There is also another silly issue, the buyer is willing to come with the funds to cover the difference between between what has been approved by Homeward and what the 2nd lien holder is asking. Real Time Resolutions, Inc. refused to take it like that and the response was the money had to come from Homeward.
It's a battle of power that it's not making a lot of sense.
Any thoughts on how to deal with this situation. We have contacted HAFA today to get a clarification on the guidelines that to confirm that all of them apply to all banks and banks can't modify the program and its rules.
If someone out there has ever had a situation like this please share your 2 cents and the results.
Thanks for your time!!!
Replies to This Discussion
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Permalink Reply by Wayne Brooks on
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The guideline for HAFA is not a flat $8500 to subordinate mtg.s. It is like 8%, UP TO $8500, which ever is less. 10% is not unreasonable. Usually the second doesn't care where the difference comes from, the first does.
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Thanks Wayne, I can see the 2nd lien holder is trying to get as much as possible. I'm trying to get with the negotiator on the phone and see if we can convince her with what she has. We are so close to make it happen.
Thanks for your pointers, really appreciate you taking the time to respond.
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Permalink Reply by Kevin - Greenville, SC on
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To a certain extent then can.
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3.1 HAFA Policy
Each participating servicer must develop a written policy, consistent with investor guidelines, that
describes the basis on which the servicer will offer HAFA to borrowers (HAFA Policy). A
servicer’s HAFA Policy must: (i) identify the circumstances under which the servicer will require
monthly mortgage payments and how that payment will be determined, in accordance with
applicable laws, rules and regulations; (ii) describe the basis on which the minimum acceptable
net proceeds will be determined; (iii) describe how subordinate lien holders will be paid, whether
by percentage of the UPB of their loan or some other determination;https://www.hmpadmin.com/portal/programs/docs/hamp_servicer/mhahand...
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What I received back from the Treasury Dept. -
The buyer isn't prohibited from contributing toward the second, but the contribution may not exceed $8,500 (please see 6.2.4.2).
6.2.4.2 Subordinate Liens
It is the responsibility of the borrower to deliver clear marketable title to the purchaser or investor
and to work with the listing broker, settlement agent and/or lien holders to clear title impediments.
The servicer may, but is not required to, negotiate with subordinate lien holders on behalf of the
borrower. The servicer, on behalf of the investor, will authorize the settlement agent to allow a
portion of the gross sale proceeds to be used as payment(s) to subordinate mortgage/lien
holder(s) in exchange for a lien release and full release of borrower liability. All subordinate lien
holders will be paid in order of priority. Subordinate mortgage lien holders with subordinate liens
secured by a mortgage on the subject property may be paid no more than an aggregate cap of
$8,500. Such cap does not apply to non-mortgage subordinate lien holders with subordinate
liens not secured by a mortgage on the subject property, such as mechanics’ liens or liens
associated with assessments owing to homeowner’s associations. Payments will be made at
closing from the gross sale proceeds and must be reflected on the HUD-1 Settlement Statement.
Hope this helps,
Erin Quinn
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Great information Kevin
We are looking for a supervisor at Real Time Resolutions and ask for review of the approval.
Thanks a lot!
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Permalink Reply by Patti Lyles on
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Kevin,
Great post and very, no - extremely helpful.
My client was just denied a HAMP Tier 2 Loan Mod on his investment property. The denial letter states "If you do not contact us by 02/06/13 You will lose your one and only opportunity to partcipate in HAFA" I have never known of such a ticking time limit - what do you know?
Having a client make a decision in 7 days is unreasonable PLUS I understood that in California we now have a 30 day appeal option.
Please educate me.
Patti
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Permalink Reply by Short Sale Superstars LLC on
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Jorge,
Real Time Resolution is often very difficult to deal with on the negotiator level. You will need to reach out to go above the negotiators head in attempt to make this transaction work. We get resistant from RTR on almost every transaction with them. With the right escalations they are often possible to get done.
310-564-6389
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Hello Brett,
Any names you contacts that you have tried in the past?
Thanks!
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Permalink Reply by SE Davis on
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I calculate 6% of the unpaid second lien balance and then roll that up to the nearest $3,000, $6,000 or up to $8500 on the first Prelim HUD1 proposal.
I submit this proposal method to the 2nd lien holder "when possible" on the same day that the first lien hardship contract package is submitted so as too start that discussion as early as possible.
Approximately 75% of the time this method slams through approved "as submitted" for both lien holders especially if they both are HAFA participants for their first mortgages.
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