HELOC declined HAFA
We (the sellers) were approved for HAFA by Chase with no issues, but we were declined by Regions Bank. Would not accept the 6% of 7800.00 HELOC. We are going to go the traditional short sale route. My quesiton is do we have to start from scratch? Chase has all our paperwork, the BOP is done. We have THREE offers in the wings at or near the BOP. There will be a 30,000 deficiency on the first and 7800.00 on the HELOC before negotiations.
Already been through the ringer, can't take it much longer!
Replies to This Discussion
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Permalink Reply by Miriam on
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Forgot to add. Freddie is the investor, thus the offers had not yet be signed.
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Permalink Reply by Smitty on
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Why aren't the offers signed? Your agent should have an executed contract with at least one of the buyers. You need at least ONE executed contract before submitting to Freddie/Chase.
What did Regions Bank want for a payoff? I am currently working a Chase loan. They said if I didn't pursue HAFA they were going to ask for money at closing from my clients or retain their rights for deficiency. Your agent should have told you that second lien holders are not required to participate in HAFA and you may be required to bring $$ to closing.
I'm not a fan of HAFA by any means, but if by unenrolling in HAFA and going the traditional route Chase retains their right to pursue a deficiency or asks you for money at closing, it may have been worth paying off the second or working out a deal.
Sorry. Chase is my least favorite lender these days. What happened with Regions??
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Freddie Mac guidelines specifically state that no contract can be signed until AFTER approval and the BOP has been set. Chase had been very efficient with getting their portion completed and approved. We were very much aware that the Regions HELOC would be the kink and it was. We have no other choice than to go the traditional route or foreclose. Our realtor will be submitting the offer today, but was interested to see if those with experience with this can tell me if we now have to start from scratch or can Chase just pick up where we left off?
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Permalink Reply by Jeff Payne on
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What? Miriam, that is the first that I have heard of this Freddie Guideline. Is it new? Most likely Regions is going to have to settle for $3000 and be lucky to get that. Regions may ask you to contribute or sign a promissory note.
One other question, why did you choose to go HAFA instead of a traditional short sale in the beginning?
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The guideline is not new. The information is located on their website. Here is the direct link.(section 5)
http://www.freddiemac.com/singlefamily/service/docs/hafa_servicer_q...
Its also mentioned on the below link under HAFA solicitation.
http://www.freddiemac.com/singlefamily/service/hafa.html
Our realtor has confirmed this with both Chase and Freddie.
Their guidelines are somewhat different than traditional. The recent changes to the non Freddie/Fannie HAFA do not apply.Also, Freddie does still only allows 6% to the second with a max of 6,000 whereas the traditional lifted the 6% cap. In our case that is a whopping $474.00
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Well it is a guideline that they do not follow, I can tell you that I have closed 2 HAFA sales, one with Freddie and one with Fannie and we had had a signed contract BEFORE submitting anything. Keep in mind that if you have an offer that is not signed, no matter what Freddie says, you do not have a legal and binding contract, you have an offer.
I just glanced thru this but did not see anywhere that said you should not sign an offer? Where does it say that?
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Miriam, none of the links you provided state offers are to be submitted unsigned. Can you provide an acutal link to the guideline?
I would be VERY CAREFUL if this is what your Realtor has told you to do. I've worked many short sales and if by chance there was a missing signature, it was either rejected or I got a call from the negotiator.
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Let me clarify and clear up some confusion. Not sure where the impression that we were turning in unsigned documents came from. We have 3 offers in the wings. We could not sign until approved by Chase/Freddie for HAFA. As far as they are concerned, they do not know we have potential buyers. Once the BOP is set, then we would sign the contracts and turn them in as an offer. You cannot have a signed contract before being approved for a Freddie HAFA.Basically, we told our the potential buyers that if they were willing to wait, once HAFA was approved we could negotiate the contract. There was never any intention of turning in unsigned documents.
Now that we have been declined for HAFA, we have all just signed our parts accepting the offer this morning, and
they are on their way to Chase.
I am now on the road, and am not able to pull up the Freddie PDF's but here is a link to a discussion similar to our own.
http://www.theshortsaleguide.com/forum/topics/freddie-mac-hafa-loop...
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Please tell me that you only signed one of the three offers! I recently closed a Freddie HAFA that we submitted the signed contract before we had any approval.....
HAFA is a joke, all is does is drag out the approval times..
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Yes,only one was signed. It was the first we received. All the offers were for asking.
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Good :) Work that one til the end!
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Permalink Reply by Kimberley Kelly on
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This is goofy. HAFA, from what I understand states that there is no longer a 6% amount paid to 2nd, but the $6000 cap is still there. For your HELOC, I cannot see why they wouldn't take that and go. This is a very small deficiency on the first note and your HELOC. Something not right here. HAFA is a pain, but CHASE is worse..whether HAFA or standard SS. I just got one of theirs approved, but it was painful..always are with them.
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