HAFA - Home Affordable Foreclosure Alternative
Information
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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 Jennifer McNitt on August 9, 2010 at 8:08am
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Cami, what are your sellers planning on doing in this situation? Also when you mean imminent, does that mean that they haven't gone behind but are planning to?
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Comment by Cami Pinsak on August 9, 2010 at 8:04am
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I'm in the middle of an approval with current payments. It has to be behind or in "imminent" default.
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Can anyone verify that you have to be behind on payments to be able to qualify for HAFA? Has anyone been able to get approved while still staying current in payments? I'm preapproved for a new mortgage for once the short sale is complete. The preapproval is valid as long as I keep up with our current payments.
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Comment by Michael Schneider on July 31, 2010 at 4:51am
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Colleagues,
I'd like to write an article on "Real Experience with HAFA". Basically, a "this is what's happening in practice" article.
I'd like to interview colleagues who have experience with managing a short sales within HAFA. You would be quoted by name or not, as you choose. And, of course, you would see the copy prior to publication, with the opportunity/right to edit your comments. Just a 30 minute or so phone conversation.
If you would like to be part of this, please write to me at [email protected]. Website: newhavenllc.com.
cheers, michael
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Elise,
I don't think that was intended in the Treasury HAFA guidelines. But, they do grant to the Servicer the responsibility to develop precise prodedures. Who is the Servicer? A major? Or a small player?
HAFA was suppose to simplify the short sale process by standardizing, thereby establishing a consistent process with shorter timeframe.
Ironically, the very act of attemptng to impose "standardization" would seem to be having the opposite effect of increasing the complexing and increasing the timeframe.
In your case (and mine too), the so called "standard process" is too inflexible to meet the needs of the short sale process, which inevitably requires customization. Meaning, each short sale is unique.
Sounds like you may need to consider pulling the file from HAFA, and move it to the "traditional" short sale process.
I think that BPOs are good for about 90 days, then they expire.
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Comment by Elise Fay on July 30, 2010 at 4:15am
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Michael--I have repeatedly asked my negotiator on my HAFA approval if I can submit an offer lower than what they have approved, since with the recent change in the market here in AZ, the approved price is a bit high. She never waivers from her response: If you do not meet the terms and conditions on the approved HUD, then you will have to go thru the traditional short sale route! Now we are just in limbo, hoping to get the approved offer price by Nov. I guess there will come a point in time when my seller will have to make that call. Do you think at some point their BPO will expire and they may do another one in the hopes that we can get another approved price?
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Well, I think I've answered my own post regarding MHA HAFA and a seller concession. Saxon interprets the guidelines as not allowing a seller concession. I interpret the guidlines as allowing the Servicer to establish a seller concession in their Procedures. But, gee, they win...
So, I would recommend: Do not accept a seller concession on a purchase contract that is going under MHA/HAFA.
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Comment by Brigitte Powell on July 27, 2010 at 9:13am
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Great! :-) Thanks for the heads up
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Comment by Jean Beymer on July 27, 2010 at 8:25am
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Sounds like Fannie Mae and Freddie Mac will be participating in a HAFA program starting August 1, 2010. Just read it on efanniemae.com.
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Elise,
Well, I'm not sure about that. You are suppose to get a Minimum Net Proceeds (MNP), which hopefully is along the lines of the FHA PFS program. Meaning, a reasonable percentage of the appraised value.
But, the guideliens say that the Servicer may not increase the MNP. It doesn't say that they can't decrease the MNP. No doubt they would expect you to provide strong justification.
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