HAFA - Home Affordable Foreclosure Alternative
Information
Let's get this group going to track how this program is helping homeowners avoid foreclosure.
Members: 626
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 Smitty on June 1, 2012 at 7:20am
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I'm not a HAFA expert, but we have an approved HAFA ss with Chase and RBS Citizens closed the second file because homeowner didn't get last two months profit loss to us on time. Resubmitted and escalated to citizens...(need help there too if anyone has contact) - chase is saying that if we don't close now, we can't get extension??? Hafa short sales cannot be extended??? I've never heard of that. Approval was issued 5/1
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Comment by Kevin - Greenville, SC on May 11, 2012 at 8:41am
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This came from NAR. The is not Legal or or Financial Advice.
Kevin, I finally got something substantive from Treasury. Unfortunately, they can’t cite chapter and verse and don’t have anything directly from the IRS. Here it what they wrote to me:
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While I do not have an IRS directive that I can point you too, the Internal Revenue Service has consistently held that governmental payments made under governmental programs for the promotion of the general welfare are not includible in an individual recipient's gross income (general welfare exclusion). This includes borrower incentive payments received under any TARP program including the borrower relocation incentive under HAFA.
However, to the extent that moving expenses are tax deductible, a borrower in a HAFA transaction must reduce the moving expenses by the amount of the relocation incentive before itemizing this expense. In other words they cannot double dip.
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Comment by Kim Martin on May 11, 2012 at 8:16am
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Can someone help me with a question?
I have a HAFA approved client and I want to know if my client will get a 1099 for the HAFA amount on top of a 1099 for the balance of the loan?
I've successfully closed out a previous HAFA file but it's too early to see what happens next.
Thanks!
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Comment by Michael Schneider on May 3, 2012 at 4:40am
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Thanks Sean and Kevin. Got it. Just lucky previously....
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Comment by Sean Wilder on May 3, 2012 at 3:16am
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It's not new but most servicers skip it when you submit for a short sale. Some read the fine print and it causes a problem.
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Michael, No that's not new, it's part of their waterfall process.
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Had this twice now, from Seterus and Nationstar, each case a Fannie loan.
Borrower MUST have been turned down for HAMP in order to be eligible for HAFA.
In each case, the borrower is eligible in all other respects. Is this new? Is the alignment between Freddie/Fannie? Is this not so? Thanks in advance.
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Comment by Jim Stewart on April 25, 2012 at 11:29am
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Starting work on a Fannie HAFA short sale. I know Freddie will decline HAFA if an offer is received prior to HAFA review being completed. Will Fannie do the same or am I safe to go ahead and list the house?
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Comment by Laura Marshall on April 17, 2012 at 6:31am
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I haven't sent in an offer yet, but I do have one. The borrower has not received any paperwork regarding HAFA and it has been almost 30 days. I am now about 70 days from a potential sale date ( I'm in California). I don't want this denied because I am within 60 days of a foreclosure sale.
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Comment by Maria Evans on April 17, 2012 at 6:27am
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Laura, do not send an offer to Wells Fargo until you get the approval for HAFA or your client will not receive the $3000.
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