Replies to This Discussion

Permalink Reply by Jason Opland on April 18, 2010 at 2:26pm

According to the HAFA Program Directive, Seller's do not need to first attempt a Loan Modifcation throughr HAMP if they have been relocated, or if they've lost their jobs and are relocating to find a new job. Sellers can move straight to HAFA and a short sale if they meet these qualifications.

Jason Opland
Obvious Choice Realty || The Opland Group
614.408.8078 o
[email protected]



Dave Dayton said:

Steele...

You are the first person or place I have heard this from- thanks.... I have a client who I think might qualify for HAFA because his payment exceeds 31% of income. However, everything I have read says he will need to qualify for HAMP first. Can you tell me how you started? I mean did you go to the lender before listing the property? Did you just have your client call and ask 'how do i participate in HAFA?" any help greatly appreciated...

Thanks

Steele V. Propp said:

Actually your WF person was wrong on HAFA qualifications. One does not have to go through HAMP. A seller can request a short sale right off the bat. Review the HAFA guidelines and you will see this in addition to the other items.

Personally if you have a short sale in process it makes no sense to switch to HAFA (IMHO). Between investor and seconday lien fallout it would probably not come together anyway.

Permalink Reply by Tina Maldonado on April 19, 2010 at 1:18pm

I agree with you on the forth missing item as I read that too. I also agree with others that it ultimately is up to how the servicer interprets the regulations. If a servicer requires your clients to run through HAMP first, most servicers allow your client to give their financials over the phone. If your client turns in their numbers as being even a little in the negative per month, they will be denied for HAMP and you can move to the next step of a short sale. I hope this helps. By the way, even BOA is taking numbers over the phone now.

Steele V. Propp said:

What is missing from the NAR quote is the fourth item for consideration:

"Requests a short sale or DIL."

This is from page 4 of the rivised directive HAFA dated 3/26/2010.

Laurel Starks said:

According to our in-house attorney and from what we've read from NAR, it appears that the borrower must be considered for HAMP prior to being considered for HAFA. If a borrower requests HAFA off the bat, the servicer must first run them through HAMP - even if the borrower doesn't want to keep the house. They must offer them the modification if they qualify for it. NAR's publications states as follows:

Servicers must consider HAMP-eligible borrowers for HAFA within 30 days after the borrower does at least one of the following:
o Does not qualify for a HAMP trial period plan.
o Does not successfully complete a HAMP trial period plan.
o Is delinquent on a HAMP modification (misses at least 2 consecutive payments).

I do agree that there is a lot of confusion on HAFA - and in my office, we have all come to the conclusion that we can interpret the guidelines all we want to, but ultimately the servicers are going to have their own interpretation and implement accordingly. In sum, it is going to be a trial and error kind of thing, as is just about everything in real estate.

And I do agree - the investor and the second would likely ruin my sellers' chances anyway. Fortunately, my seller thinks so too and we are carrying on with our "traditional" short sale.

Permalink Reply by kathleen shaffer on April 19, 2010 at 1:54pm

Correct me if I am wrong, but HAFA only covers the first loan. Any HELOC or non-purchase second will not be free from deficiency judgment.


Tina Maldonado said:

I agree with you on the forth missing item as I read that too. I also agree with others that it ultimately is up to how the servicer interprets the regulations. If a servicer requires your clients to run through HAMP first, most servicers allow your client to give their financials over the phone. If your client turns in their numbers as being even a little in the negative per month, they will be denied for HAMP and you can move to the next step of a short sale. I hope this helps. By the way, even BOA is taking numbers over the phone now.

Steele V. Propp said:

What is missing from the NAR quote is the fourth item for consideration:

"Requests a short sale or DIL."

This is from page 4 of the rivised directive HAFA dated 3/26/2010.

Laurel Starks said:

According to our in-house attorney and from what we've read from NAR, it appears that the borrower must be considered for HAMP prior to being considered for HAFA. If a borrower requests HAFA off the bat, the servicer must first run them through HAMP - even if the borrower doesn't want to keep the house. They must offer them the modification if they qualify for it. NAR's publications states as follows:

Servicers must consider HAMP-eligible borrowers for HAFA within 30 days after the borrower does at least one of the following:
o Does not qualify for a HAMP trial period plan.
o Does not successfully complete a HAMP trial period plan.
o Is delinquent on a HAMP modification (misses at least 2 consecutive payments).

I do agree that there is a lot of confusion on HAFA - and in my office, we have all come to the conclusion that we can interpret the guidelines all we want to, but ultimately the servicers are going to have their own interpretation and implement accordingly. In sum, it is going to be a trial and error kind of thing, as is just about everything in real estate.

And I do agree - the investor and the second would likely ruin my sellers' chances anyway. Fortunately, my seller thinks so too and we are carrying on with our "traditional" short sale.

Permalink Reply by Thomas F on May 1, 2010 at 2:35pm

Just wanted to note as others mentioned, if the seller (borrower) already has a buyer for a shortsale, they should submit an Alternative RASS. I have a case where the borrower is trying this, but I think the lender (Well's Fargo) is trying to go through the process of approving an SSA (Short Sale Agreement), but this would seem to be wasting valuable time since there is already a fully executed sales contract and an Alternative RASS would allow for immediate submission of the offer and if approved the short sale would still get the benefits of HAFA.

But how do you get this Alternative Request for Approval of Short Sale (Alternative RASS)?

Also, I may be wrong, but it seems going the Alternative RASS way elminates the Deed in Lieu clause of the SSA (Where the borrower has to give up the home if the timeline isn't met and the short sale is not successful)

Quote from SSA: "By signing this letter, you are agreeing not only to a short sale but also to a deed-in-lieu of foreclosure if a short sale is not successful."

Quote from Alternative RASS: "In the event this transaction is unsuccessful, the Servicer may exercise all remedies under the mortgage, including foreclosure."

I have started a discussion in the HAFA group "Things to Note About HAFA"

Permalink Reply by Jessica Sulliman on May 10, 2010 at 6:43am

Ok, Riddle Me This......If HAMP borrowers MUST have loans that are backed by Fannie or Freddie, and HAFA loans CAN NOT be Fannie or Freddie, how can one work hand in hand with the other???

Permalink Reply by Rosemary Brooks on May 15, 2010 at 10:49am

First things first. This is why it is so important to make sure the homeowner is aware of the loan modification and how HAMP works. I try it a different way. I work with FREE Housing Counseling to get them submitted to the lender requesting HAMP and then I work with them on the other side of that if they are denied, fail or turn down the loan modification offered by their lender. That way they are ready set go to do the short sale.

Doing the short sale first and then having them mood walk back to the loan modification is putting the cart before the horse.

Permalink Reply by Rosemary Brooks on May 15, 2010 at 10:51am

Fannie & Freddie have not come out with their version of HAFA yet --- to my knowledge. Now I am off to their site to see if they finally came up with the HAFA-like guidelines.

Jessica Sulliman said:

Ok, Riddle Me This......If HAMP borrowers MUST have loans that are backed by Fannie or Freddie, and HAFA loans CAN NOT be Fannie or Freddie, how can one work hand in hand with the other???

Permalink Reply by Rosemary Brooks on May 15, 2010 at 10:55am

THis is a great point. One point too is that they say you can ask for an extension if you cannot do the short sale within the 120 days alotted time. I'd try that as well.

Seems to be that they would deny the short sale... and just wait for them to have to do the deed in lieu and save on the foreclosure expense. Sneek attack.

Thomas F said:

Just wanted to note as others mentioned, if the seller (borrower) already has a buyer for a shortsale, they should submit an Alternative RASS. I have a case where the borrower is trying this, but I think the lender (Well's Fargo) is trying to go through the process of approving an SSA (Short Sale Agreement), but this would seem to be wasting valuable time since there is already a fully executed sales contract and an Alternative RASS would allow for immediate submission of the offer and if approved the short sale would still get the benefits of HAFA.

But how do you get this Alternative Request for Approval of Short Sale (Alternative RASS)?

Also, I may be wrong, but it seems going the Alternative RASS way elminates the Deed in Lieu clause of the SSA (Where the borrower has to give up the home if the timeline isn't met and the short sale is not successful)

Quote from SSA: "By signing this letter, you are agreeing not only to a short sale but also to a deed-in-lieu of foreclosure if a short sale is not successful."

Quote from Alternative RASS: "In the event this transaction is unsuccessful, the Servicer may exercise all remedies under the mortgage, including foreclosure."

I have started a discussion in the HAFA group "Things to Note About HAFA"

Permalink Reply by Rosemary Brooks on May 15, 2010 at 10:57am

Jason this is true or at least that is what the guidelines state.
I believe that HAMP >>>> HAFA or DIL have most of the issues covered - as they say its in there in those Directives. It is just taking everyone a while to catch on to the process.

Jason Opland said:

According to the HAFA Program Directive, Seller's do not need to first attempt a Loan Modifcation throughr HAMP if they have been relocated, or if they've lost their jobs and are relocating to find a new job. Sellers can move straight to HAFA and a short sale if they meet these qualifications.

Jason Opland
Obvious Choice Realty || The Opland Group
614.408.8078 o
[email protected]



Dave Dayton said:

Steele...

You are the first person or place I have heard this from- thanks.... I have a client who I think might qualify for HAFA because his payment exceeds 31% of income. However, everything I have read says he will need to qualify for HAMP first. Can you tell me how you started? I mean did you go to the lender before listing the property? Did you just have your client call and ask 'how do i participate in HAFA?" any help greatly appreciated...

Thanks

Steele V. Propp said:

Actually your WF person was wrong on HAFA qualifications. One does not have to go through HAMP. A seller can request a short sale right off the bat. Review the HAFA guidelines and you will see this in addition to the other items.

Personally if you have a short sale in process it makes no sense to switch to HAFA (IMHO). Between investor and seconday lien fallout it would probably not come together anyway.

Permalink Reply by Kevin - Greenville, SC on September 12, 2011 at 7:53am

Fannie Mae Level 2 support says the Borrower must be reviewed for HAMP first even if they are seeking a Short Sale or DIL.

• ‹ Previous
• 1
• 2
• Next ›
• Page