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 July 26, 2010 at 12:24pm
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Michael--yeah, that makes sense. I am stuck with a HAFA approved price that worked before but now that the buyer has walked I am hard pressed to get this price especially without any seller contribution. I believe from the guidelines that I have to wait 120 days before the terms can be changed....
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Comment by Michael Schneider on July 26, 2010 at 7:09am
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Elise,
If I recall from the guidelines, the $3000 relocation check must be cut at the table, in total, payable to the seller. So, the intent is to not have this money used for other closing costs. Also, I would think that the Servicer would need to establish this as an "allowable cost" in their guidelines, in order for this to appear on the HUD. So, in short, in your case, it sounds like you could not add this on the HUD.
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Michael...I was wondering if the seller could use some of his $3000 relocation allowance as a credit to the buyer. I have the approval, terms and conditions in hand, just need an offer but things have really slowed down and right now the offer price does not allow any seller contribution. I thought to entice a buyer, we may have the option to use part of his $3000, if the seller should decide. What do you think?
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Are any of the Servicers approving a seller concession closing credit to the buyer under the MHA HAFA program? My quick read of the guidelines is that a seller concession is neither a requirement nor expressely prohibited in HAFA.
It seems that a Servicer could allow the seller concession.
Just wondering what other Servicers are doing.
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Comment by Amy Martin on July 22, 2010 at 12:32pm
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I have a VA buyer. Is it true that with HAFA, lender will not pay for VA closing costs?
HAFA Negotiator said:
"No closing credits will be allowed even with VA loan, I can move forward with removing them. The Home Protection Plan will not be accepted. The T/C Fee will not be accepted as well. Commissions in HAFA can not exceed 6% . The 2nd lien they know this if it is a HAFA deal it is 6% of the unpaid balance up to $6,000. Whichever is lower. I can run my analysis and send off to Quality Assurance department today, so hopefully beginning of next week we can be moving towards the approval."
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IRS will discharge the tax lien. Follow the process outlined in the IRS Pub ??? for discharging tax liens. You do not need "two appraisals" as they state. I provided a CMA and an AVM. I assembled the file (no small job), my attorney submitted it. It took maybe 30 days? Shorter than expected.
Nobody will pay the tax lien, that's my experience.
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Comment by Joan Lorberbaum Moore on July 17, 2010 at 12:10pm
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Re client thinking of going the HAFA route after being turned down for a permanent mod. There's no 2nd but with MI and a federal tax lien is there a chance in hell it would be approved? Or, will the lender decide it best to either do a DIL or should client just start thinking foreclosure. Does the IRS cooperate in removing the lien? Does HAFA view the tax lien as a 2nd & thus agree to a payount of the 6% towards it? Sorry, lots of questions I know.Just trying to piece together the puzzle. Thanks!
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I have HAFA and lender approval on the first, the second has deficiency judgment on the approval letter. I can get them to remove right?
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Comment by Brigitte Powell on July 17, 2010 at 3:07am
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Thanks Tracy :-) wondered how I was going to get educated on this one :-) My seller was with BoA and Freddie was the investor....so no HAFA for her. We closed yesterday after 5 1/2 months. I now have two short sale listings. One VA with Wells Fargo and one USAA/GMAC :-) I hope I survive these two.
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Comment by Jennie Blackburn on July 16, 2010 at 5:05am
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Elise, you had an IndyMac approval on a Fannie Mae loan...did they forgive the debt (waive their deficiency rights)? I have an IndyMac/Fannie Mae and the negotiator is saying Fannie Mae does not forgive debt. For my guy, that's a big 'ole chunk of cash. Brick wall. Did this happen to you, too?
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