HAFA - Home Affordable Foreclosure Alternative
Information
Let's get this group going to track how this program is helping homeowners avoid foreclosure.
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Latest Activity: Jul 11, 2017
HAFA Short Sale Information
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HAFA is now an expired program.
The escalation process for HAFA is easy and effective and works with all HAFA participants.
https://www.hmpadmin.com/portal/resources/advisors/escalation.jsp
Email: [email protected]
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Here are some documents that may help you understand the HAFA guidelines.
4506-T.pdf
Quite possibly because HAFA and HAMP have both lagged far behind in expected completions, the Treasury Department recently reviewed and eliminated some of the rules to make eligibility easier.
With the HAFA program being designed, in part, to catch and help those homeowners who fell out of the Home Affordable Modification Program. However, the program has had less than 1,000 short sales since its April 2010 launch.
Among the Treasury’s changes are that servicers are no longer required to verify a borrower’s financial information or determine whether a borrower’s total monthly mortgage exceeds the bar of the 31% debt-to-income ratio.
According to one Treasury spokesperson, “While this requirement has set the standard for mortgage affordability under HAMP, it is not as important for homeowners ready to transition out of their home. Eliminating this requirement further streamlines the process for homeowners applying to the program.”
Servicers are, however, still required to obtain a signed hardship affidavit.
Section 6.2.4.2, Chapter IV of the Handbook is amended to increase from $6,000 to $8,500 the amount a servicer may authorize the settlement agent to pay from gross proceeds to subordinate mortgage holder(s) in exchange for a lien release and full release
of borrower liability. Investors will continue to be reimbursed one dollar for every three dollars of short sale proceeds paid to a subordinate mortgage holder up to $2,000.
All borrowers must now receive a short sale agreement within 30 days of the request.
The best way to assure your short sale is not yanked for the homeowner to go try a loan mod after you are listed it is to .... make sure your borrower seek the HAMP program first, then HAFA. Also, if you run out of time (120 days) ask for an extension.
Discussion Forum
Only Shorting the 2nd Lien Holder-Wells Fargo 1st is CITI and investor is Fannie Mae.
Started by Jimmy Williams. Last reply by Brian Avery Mar 25, 2016. 2 Replies 0 Likes
Hello,1st Lien Holder is serviced by Citi, Fannie Mae is Investor, who has filed a LIs Pendance. 2nd is HELOC with Wells FargoCiti is not short in the sale, but Wells Fargo will be short. Will this…Continue
ONLY SHORTING THE 2nd Lien Holder GMAC- does HAFA APPLY?
Started by Kathy Dyer Realtor Rosevillle Ca. Last reply by Kathy Dyer Realtor Rosevillle Ca Apr 2, 2015. 4 Replies 0 Likes
I have a new short sale in Ca. We are only shorting the 2nd lien holder, GMAC. Can we do Hafa if the first is not being shorted? NON GSE.Continue
OCWEN participates in HAFA, but doesn't pre-approve the short sale???
Started by Jim Schneider. Last reply by Kevin - Greenville, SC Mar 1, 2014. 2 Replies 0 Likes
I just got off the phone with the short sale department at OCWEN, and they are saying that they still participate in hafa, but they don't have to issue a pre-approval letter. I thought that was the…Continue
Investors Turning Down Short Sale Because Their Own Appraisal Is Too Low
Started by Kathleen Sheridan. Last reply by joe beauchamp Oct 2, 2013. 1 Reply 0 Likes
I just had a investor turn down a HAFA short sale because the appraisal that they ordered is too low. It seemed spot on to me. Now they want me to sell the property as a regular short sale for an…Continue
Comment Wall
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Comment by Elise Fay on September 28, 2010 at 12:07pm
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Regarding the IRS and Tax implications I refer my clients to this website. http://www.irs.gov/individuals/article/0,,id=179414,00.html
The Mortgage Forgiveness Debt Relief Act
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Comment by joe beauchamp on September 28, 2010 at 11:12am
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I thought this was about as trivial a question as they come - filling out RASS for seller - need to know where to move various items from the HUD-1 - Been trying to get the info since Friday on this???
Fairly common stuff - no guide and the borrower is supposed to fill this out??
Where do the following go:
title search fee
atty fee
xfer tax
hoa xfer fee
judgments
water escrow
overdue sewer bills (tax)
Seller Assist (I assume "Other)
And, another simple question - these come from the HUD-1 sent in for the short sale - there is now a $3K diff for "relocation" that the HAFA people put in. Am I supposed to make up a new HUD-1 with that $3K in there and what HUD-1 line does that go on?
Now, you'd think from HOPE and even HUD or HAFA or BofA, someone would know how to fill this out?? Still awaiting an "asset manager" to call back from the HAFA place for this.
I had to miss something, right? How can they expect a borrower to know what goes in "Settlement Escrow/Attorney Fees" and what goes in "Seller's Title and Escrow Fees"? Etc?
Thanks for any pointers or help... Can't believe I've spent so much time on this thing.
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Comment by Sean Wilder on September 28, 2010 at 10:49am
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HAFA and the IRS are 2 seperate issues. HAFA does not dictate IRS guidelines. If they close a HAFA short sale where the debt is forgiven, they will have a seperate issue as to whether or not they owe taxes on the forgiven debt.
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Comment by Amy Martin on September 28, 2010 at 10:46am
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Please enlighten me on this HAFA Short Sale...I understand that HAFA relieves seller of their delinquencies/deficiencies. Now, are they also relieved from the short sale tax ramification?
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Comment by Wendy Rulnick on September 28, 2010 at 9:45am
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Bank of America's HAFA department tel is 877-824-0976
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Comment by Kynse L. Agles CDPE on September 28, 2010 at 1:02am
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I have one closing soon. Our approved HUD reads HAFA Seller Incentive on line 1306. Line 603 of the HUD states $3000 cash to seller at closing. Hope this helps. Chase said it is not called a relocation fee but must read HAFA Seller Incentive. The check gets cut at closing! Happy sellers!
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Comment by Laura Marshall on September 27, 2010 at 9:07am
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The net in the short sale approval must INCLUDE the amount to the seller. I just looked at my est HUD and it is on line 1313 and states " HAFA Relocation Fee to Seller pd by 1st Lender". Hope this helps.
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Comment by Debra Enos on September 27, 2010 at 9:00am
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Thanks I'm talking to my Escrow. She hasn't done a HAFA yet. How would you show this on the estimated HUD1 and still come to -0- at the end????
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Thanks guys! Let me tel you, if the lender is not following the timelines escalate the file. Each lender has a HAFA department and my experience was that the file went to a HAFA negotiator and then to the regular approval/denial short sale department. I have another with Aurora that I just started, wish me luck! My Chase file is set to close by the 28th of October! Wendy email me at [email protected] .
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Comment by Michael Schneider on September 26, 2010 at 5:57am
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My general experience is that outside of the majors, program guidelines are sometimes not clearly understood or followed. Not that the Regionals have a monopoly on non-compliance, but I find that the major are more consistent. Each one of these is, I think, a mis-application of an intended guideline.
So:
#1: Must be delinquent or in imminent danger of default. But, I believe there is no consistent criteria for imminent default.
#2: Outreach is encouraged, maybe even required.
#3: Servicer must review for modification prior to HAFA.
In each case, if you twist the guideline by a short-sale resistant Servicer, you kinda get your outcome.
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