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 Kevin - Greenville, SC on May 9, 2011 at 5:30pm
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Jim,
Here you are -
The borrower is offered, but refuses, a HAMP Trial Period Plan and other Freddie Mac home retention options and requests a short sale or deed-in-lieu of foreclosure.
http://www.freddiemac.com/singlefamily/service/docs/hafa_servicer_q...
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Jim,
If the borrower requests a Short Sale or DIL per the guidelines, they are not required to be considered for HAMP first. I believe this applies to both GSE's and non GSE loans, but would have do double check.
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Comment by Sara Mehrpouyan Los Angeles CDPE on May 9, 2011 at 4:33pm
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Has anyone had a Wells Fargo (1st loan) HAFA allow a contribution from the buyer to satisfy the 2nd loan (not Wells Fargo)? Not fannie/freddie.
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Comment by Michael Schneider on April 23, 2011 at 7:03am
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Jim,
I think this is a gray area, Jim. This is Freddie and Wells, each rather rigid in their interpretation of guidelines.
Here is a quick quote from the Freddie Servicing Guide, Vol 2, Chapter 65, Verse D65.3
Servicers must first consider Borrowers for a HAMP Modification and then for a B65 Modification or other home retention workout options before considering them for foreclosure alternatives under HAFA.
B65 would be the verse from aforementioned scriptures on workout options, followed, as you now can infer, by verse C65 on HAMP Modifications.
It would be a bit Wells-like to interpret "must consider" as "must have applied for".
They are thinking in terms of the hierarchy of alternatives in which modification is preferred to short sale.
I would challenge on the basis that the borrower has consider a modification and would again, but modification is not the right alternative for them, because...
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Comment by Jim Schneider on April 22, 2011 at 9:09am
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I was told today that a client did not qualify for HAFA because, he did not apply for a HAFA modification. This was a Freddie Mac loan serviced by Wells Fargo, and it was Wells I was talking to. Is there any such HAFA requirement? I didn't think there was.
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Comment by Julia Huntsman, 562-896-2609 on April 19, 2011 at 6:46am
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can you say who the servicer was on this particular HAFA? Right now it's supposed AMS dealing with their HAFA packages.
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These statements on "time for review" are a bit misleading IMHO.
Because the HAFA review process seems to contain separate sub-approvals. I have received quite a few "Seller Approved" or "All parties approved" messgaes on HAFA deals that are eventually denied. There seem to be subapprovals for "eligibility", "underwriting" and "MI". Moreover, even after "ultimate, final approval" I waited 26 days for the approval letter.
The only definition of approval, is receipt of the approval/payoff letter.
And, just to penalize the seller for trying, if denied for HAFA, it is a complete start-over at BofA. My denied HAFA client was resolicited for HAFA. And, when I called to explaine the circumstances, the rep said "Well, we still need to talk to the seller to explain HAFA".
Escalation was kind enought to straighten this out. But, the seller still received another HAFA solicitation in the mail.
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Comment by Jim Stewart on April 19, 2011 at 6:00am
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I did. I just don't have confidence in the answer I got. Not that a short sale department would EVER give erroneous information. (yes I'm being sarcastic). I'm looking for real world experiences of other agents.
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Call their Short Sale Dept.
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30 days is what AMS told me too. My concern is this: what happens when I receive my offer before their review is complete? Wells Fargo declined our HAFA request due to receiving an offer before their review was complete but that was last year.
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