We have had a lot of recent success with our short sales, but we have just now experienced first hand, the drastic changes coming to our profession!

We have a HAFA approval through BofA, which is giving $3k to our seller and $8500 to Ocwen, the junior lender. Since we had already negotiated a $5k payoff to Ocwen, we celebrated with the team and our seller last night, but almost threw-up this morning when we received a note from the Ocwen negotiator saying that they did not participate in HAFA and that we needed to submit a new HUD reflecting no proceeds to the seller. WHAT? Why do they care, they are getting $3500 more than we agreed to? How can they dictate and deny Government help for a seller?

Please tell me that we do NOT have to start over again with a traditional sale? We know the seller is not allowed to contribute to a Jr lien holder under HAFA, so any and all tips, comments or ideas from the group are welcome!

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According to my contact at the Treasury she says VERY few Investors do not participate in HAMP/HAFA.

http://www.nclc.org/images/pdf/foreclosure_mortgage/loan_mod/lmp_wh...

This is what 2MP is -

Second Lien Modification Program (2MP)

If your first mortgage was permanently modified under HAMPSM and you have a second mortgage on the same property, you may be eligible for a modification or principal reduction on your second mortgage as well, through MHA's Second Lien Modification Program (2MP). 2MP works in tandem with HAMP to provide comprehensive solutions for homeowners with second mortgages to increase long-term affordability and sustainability. If the servicer of your second mortgage is participating, they can evaluate you for a second lien modification.

It is my understanding that it is not related to when the 2nd is being request to participate in HAFA and accept what the first is offering.

I'm fairly certain the 2nd doesn't even have to be a HAFA participant if they are receiving funds from the 1st, but I will check into that to clarify.

 My Question to Elizabeth Spring at the Treasury Dept. - 

Does the 2nd have to be a HAFA participant to receive the $8500?

Her answer -

No, the 2nd does not have to participate in HAFA. However our guidance states the subordinate lien holder will receive no more than $8500, at closing, in exchange for the borrowers release from liability.  That's if the 2nd lien is secured by a mortgage on the property.  Not to include tax liens, etc.

I also wanted to mention this is different from the investor incentive on subordinate liens.  Investors will be paid up to $5000 for allowing a portion of the sales proceeds to go to the subordinate lien holder.

Here is a question I posed to her awhile ago -

Would the same hold true with HAFA?  I have a Servicer (Carrington Mortgage Services, LLC) that is telling me the Investor of the Loan doesn't participate.



>
> On Wed, Mar 28, 2012 at 1:03 PM, /span>> wrote:
>
>> No, the list is confidential, as most servicers have non-disclosure
>> agreements with investors.  However, the % of HAMP applications that
>> are denied due to investor not participating is very, very small in
>> the 1% range.  Also, if a borrower is denied for investor not
>> participating, they can escalate the case at one of our call centers.
>> Treasury will then review the investor to determine if the denial was
>> legitimately caused by an investor that is not participating or who
>> has restrictions that make it impossible to do the mod.  If we
>> disagree with the servicer's assessment we overturn the denial.
>>
>> Laurie A. Maggiano
>> Director of Policy
>> Homeownership Preservation
>> Office
>> Department of the Treasury

kevin, I need to speak with someone at Treasury about a HAFA issue with nationstar.  Home appraised for $100k and offer is $100k.  Nationstar is servicing the 1st and 2nd.  By the time the 2nd gets their 6% of OPB, realtor commissions of 6%, property taxes and other customary seller expenses, the offer nets below the $90k that Nationstar says is required.  They say the homeowner isn't eligible for the $3k incentive.  I don't know who the servicers is because Nationstar won't tell on the phone (no one has time to write in!) and MERS is incorrect.  Question is: if we have an offer at appraised value and only paying customary fees, why wouldn't the seller be eligible for the $3k?  Do you have a phone number for the Treasury Dept contact you mentioned above?

Ron, 

You may want to escalate at Wells Fargo and/or Treasury.  According the Making Home Affordable website Wells Fargo is a 2MP participant.

Wells Fargo Bank, NA (includes: Wachovia Bank, NA and Wachovia Mort... 800-678-7986 HAMP Application Documents 
1000 Blue Gentian Road 
Suite 300 X9999-01N 
Eagan MN 55121 

Customer Service Correspondence 
PO Box 10335 
MAC: X2302-017 
Des Moines, IA 50306 
866-359-7363 HAMP
Treasury FHA-HAMP
RD-HAMP
2MP
FHA-2LP

Thanks all! Yes Ron, we finally got the negotiator to explain that they are only servicing this loan. She would not disclose who the investor is, but said this investor does NOT participate, so we started over in Equator this morning. They are going to lose $3500 by declining this file, but hey, they got $ billions so who cares right?

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