Hi all,
I read through most posts and even though some get close to my topic, I'd like to take your opinion on this based on your most recent experiance.
When do you suggest listing the property: now versus waiting for a HAFA short sale agreement?
I understand with Freedie Mac as an end investor you have to wait for the HAFA approval first before you can submit an offer if you want to use that program. I read that in Freddie Mac's servicer guidelines.
2nd question: I was just told by a Chase representative to fill out the traditional short sale package (https://www.chase.com/chf/mortgage/hrm_shortsaleinfo/) simultaneously with trying to apply for HAFA.
Any thoughts on the above?
Thank you!
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FYI,
There is a buletin for Realtors published by Freddie Mac for the HAFA program: https://docs.google.com/open?id=0B9Rl99wcn-TVNzJhM2Y4ZGMtMDEzMC00OD...
There is a contact number at the end for Wayne Ferguson who is available to answer questions in regards to the HAFA program with end investor being Freddie. Very helpfull and knowledgeble and answered his phone after one ring.
You can reach him at 571-382-5214
He did confirm that if you submit an offer prior to HAFA short sale agreement, you get disqualified for the program but he also indicated that this is the Dept of Treasury requirement.
As far as borrower continuing making his monthly payment during the HAFA period, per Penny's comment, he indicated that this is part of the requirements, part of the language in the short sale agreement, which the borrower has to sign. I asked what if the borrower cant afford making the payments to which he couldn't (didnt want to) give a straight answer, but implied that you will most likely be able to proceed.
I also always list first - regardles of investor/lender/program. If you allow the lender to set your list price - you'll usually get an outrageous number you can never reach. I always like to be on market and with a listing history by the time the BPO agent sets foot in my listing.
I dont do a lot of HAFA - mostly because my experiences with this program are terrible 90% of the time. Especially with Chase.
Thanks Penny for the feedback and I'm sorry to hear that after so much hard work you werent able to close on those homes.
Marcy, all information points to the fact that Freddie Mac in a position of an end investor requires a HAFA short sale agreement (to include the list price, determined by them) PRIOR to submitting an offer. Otherwise the borrower is disqualified from HAFA participation. My client wanted to do HAFA because of the benefits it includes.
If you look at Joy's comment above...she makes a good point...that most traditional short sales forgive the debt anyways which leaves us with the $3,000 relocation expences given to the seller. Is it worth the price you are paying? Having to fight the listing price the bank determines, only having 4 months to market the property with HAFA, etc...I dont know. I know one thing...my client has a tough choice to make.
Thanks for sharing your thoughts!
My last deal with Wells Fargo went HAFA and we did not get HAFA approval prior to a contract. We submitted the request for HAFA short sale and the contract all at the same time with the short sale package. There was also a 2nd that had been turned in for collections.
WF approved the HAFA route and we had a written approval in just over 30 days. The 2nd also agreed to participate in the HAFA program.
Marcy Spieker
Marcy - Wells was the Servicer but who was the investor? As we discussed, if you accept an offer prior to HAFA approval and the Investor is Freddie you get drop kicked out of the program.
Penny - Did your clients get the BS letter that led them to believe if they participated in the HAFA program and were unsuccessful in selling, they would be offered a deed in lieu?
Hi Joy,
The HAFA Contract stated that after our 4 month marketing period if the property did not short sale seller automatically agreed to a Deed in Lieu and seller would be compensated the $3000.00 for relocation assistance anyway. I canceled the listing prior to our 4 month marketing period because seller refused to vacate property per the contract guidelines and he was becoming difficult for showings. Unfortunately I cannot verify the Deed in Lieu offering of $3000.00.
Martin,
I had a Freddie Mac HAFA via Wells Fargo and a Chase HAFA...both of these HAFA agreements forced a REQUIRED list price that exceeded current market value for the product being offered. My listings were fixer-upper properties that the HAFA program required be sold at top quality prices. I was also informed by the WF HAFA that if I lowered my list price without lender approval my buyer would be kicked out of the HAFA program and the HAFA approval letter required my buyer to make monthly payments until COE (I called my negotiator on that item and was told that it was just a request not a condition of the HAFA contract). My Chase HAFA allowed me to lower price after several months on market with no activity - but by that time it was too late. Both of these HAFA short sales went to foreclosure without us receiving one offer to purchase. I have had a BofA HAFA that processed easily & quickly - but the house was remodeled and in A-1 condition so getting a buyer at the top of the values was not a problem.
Thank you Suzanne, Eric and Joy. Good information...I did suspect most of it and I'm glad I was able to get your feedback based on your experiences. I'm looking forward to helping back you and others on this great forum!
You are correct, Martin. If the seller accepts an offer on their property prior to the SSA being signed by their Servicer, they get drop kicked out of the HAFA program if Freddie is the investor. I will also tell you that the HAFA process with Chase, by all accounts, is slow. So, I guess the question is, why do your clients want HAFA? Are they buying the HAFA hype - that it's going to be "easy, peasy lemon squeezy"? It's not. My experience is they are longer and more difficult.
Do they want the 3 grand that badly? Add it in to the Preliminary HUD on a straight short sale.
Are they looking for the deficiency to be forgiven? I've had no problem at all with that on my straight short sales.
The other thing to consider, particularly with Freddie where you cannot submit an offer prior to the SSA, is that you are allowing the lender to set the listing price. Never a good idea because even when the appraisal/BPO comes in at an accurate figure, the in-house "valuation specialists" (a.k.a. some 22 year old sitting half way across the country looking at Zillow) have been known to add $20 or $30K to the "suggested list price". Then you are faced with an up hill battle, trying to get the value corrected.
Lots of food for thought.
Good luck.
Get the home under agreement. Submit. I would not wait for HAFA approval. The lender/Investor is incentivised to us HAFA. Get the ball rolling. I also suggest at least getting a home inspection and title. Time to close after acceptance is tight.
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