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GMAC & HAFA...wow

Posted by Cody Lampariello on September 16, 2011 at 8:25am in Short Sale Discussions

Here is a new one:

First things first just so everyone knows GMAC does not automatically review sellers for HAFA qualification like other lenders. So that being said we recieved a counter stating the seller needed to pay 4k and the file would be approved.

My response: Seller has lost his job and this is primary residence why aren't we in HAFA?

Bank response: Seller will have to call in and request.

task completed....two weeks later

Bank response: Please note that the file has been denied for HAFA due to the borrowers have
sufficient cash reserves (greater than $5k). A denial letter was sent to the
borrowers on 09/13/11. The short sale review will continue as a traditional
short sale. Thanks, Lauran Hartman

My Response: There is no spot anywhere in the HAFA guidelines that discusses cash reserves.
I have read them I teach seminars on them and that is not a requirement please
clarify how you came to this decision based on non-existant guidelines

So unless I missed something I am correct here. Any thoughts on this? Do you think the bank negotiator just held the file for two weeks and then sent out a denial letter because he didn't want to deal with it?

 

Any input would be appreciated.

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Replies

  • Dean E Eshelman, CPA, CDPE, IRES September 19, 2011 at 1:41pm
    I hope you guy do as I do when I get these "non-compliant" quirks. I file it in a complaint with the FDIC, the CCC (Controller of the Currency) and my State's Attorney General. The complaints are the same so I create in a word document and copy and paste. If we don't tell anybody what is going on, the powers that be won't know. It is like really have to do this on top of everything else.
  • cesar llanes September 19, 2011 at 1:15pm

     

    There are times that the lender has additional, internal requirements for HAFA. One example from my HAFA application with BofA. The property did not qualify for HAFA because it was 30 days left towards Notice of Trustee Sale. I end up pursuing traditional short-sale.

     

    If you hear some other additional weird HAFA requirements, please inform me.

     

    Thanks and good luck.

  • Dean E Eshelman, CPA, CDPE, IRES September 18, 2011 at 10:35am

    Hmmmm. You are right. There is not cash reserve requirement . Each and every one of these "inappropriate" tactics need to be reported to an enforement arm, but who?

    The mortgage payment, including escrow, can not be less than 31% of gross pay. If that qualification is met, my understanding is you are HAFA.

      My GMAC story. Seller has been working since Dec 2009 to get mod with GMAC. Then Oct 2010 divorce happened and final in Feb 2011.  Then submit for Short Sale. EX - unemployed. Two months ago spouse receives promotion and pay raise, now house payment of $1156 is 26% of spouses gross, with 3 kids and no child support. Here we are two years into this and $80,000 underwater, now GMAC says don't qualify under HAFA Short Sale, and no moving expense of $3,000 under HAFA. What??? Is this the way the servicers try again to take it to the homeowner?  Any suggestions?

    This is an FHA loan with Ginne Mae as the investor.

    • Jeff Payne > Dean E Eshelman, CPA, CDPE, IRES September 19, 2011 at 5:45am
      the moral to the story for me is to avoid HAFA whenever possible.  HAFA is a joke in my opinion.  I have not checked recently but the number of successful HAFA sales is a drop in the bucket compared to the number of HAFA sales initiated.
      • William F Griffin Jr > Jeff Payne September 23, 2011 at 8:50am
        The one successful HAFA short sale I did was interesting.   We had an approval then the HAFA program was introduced and my seller was on the phone with her lender everyday raising cane wanting to go HAFA. It took another 3 months for a new approval and the new net to the lender was exactly $3,000 higher than the net on the original approval.  The seller was on the HUD with the $3,000 incentive.
      • Smitty > Jeff Payne September 19, 2011 at 1:13pm
        I agree 100% with Jeff.  I avoid HAFA like the plague.  Unfortunately, some homeowners are drawn into the $3000 payout and guaranteed release of deficiency.  I'm working a Chase sale where we went in with a traditional sale and everything was halted so the homeowner could fill out paperwork.  ABSOLUTELY blew my mind and I couldn't talk them out of it.   It threw the whole sale off and next thing you know they get a letter they were out of the HAFA program with no reason listed, when the negotiator pushed me because they were "eligible" - It's unbelievable.
  • Kathy Dyer Realtor Rosevillle Ca September 18, 2011 at 6:35am

    Hello Cody,

    Hafa does have some other guidelines if the loan is GSE backed. Fannie and Freddie do have some other guidelines that differ from a non GSE sponsored loans.

    It sounds like you may have a Freddie Mac. Here are some of their guidelines: I have provided a link below.


     

    Servicers must verify that the borrower is occupying the property as a primary residence, and it is not abandoned, condemned, or vacant (without an applicable exception).


    Borrowers must meet the basic eligibility criteria for HAMP, but not qualify for or complete a HAMP modification or other Freddie Mac home retention solutions.

    Borrowers must be more than 60 days delinquent and have cash reserves less than the greater of $5,000 or three times their current monthly mortgage payment.

    Borrowers who may be in foreclosure, in pending litigation involving the mortgage, or who are in active bankruptcy may be eligible for this initiative.

    Borrowers must be able to convey a clear, marketable title to the mortgaged property.


    Freddie Mac Hafa Fact Sheet

     

    Hope this helps. Contact me  if you need some help as I have done 2 Freddie Mac Hafa short sales.

     

    Kathy Dyer

    Kathy@hometeamgirls.com

    • Becky Martin > Kathy Dyer Realtor Rosevillle Ca September 18, 2011 at 8:15am
      Another reason to always first find out who the investor is on your seller's loan first:)
  • Eric Mieles September 16, 2011 at 2:17pm
    hAFA guidelines were changed a while ago not allowing servicers to use borrowers financials as a qualification any longer. I have never seen cash reserves as a disqualification. However with that being said I never assume a lender is just going to enroll clients into HAFA.

    1st I sit down and go over the pros and cons with the borrower of HAFA. Then I check to see if they have MI and if so do they participate. If the client decides then I make sure to submit the additional paperwork required to go through HAFA from the begining.

    Not sure reason why or what lies beneath. It's voluntary and they really don't have to do anything. I have a Chase where we got full approval HAFA arass filled out Huds and all and negotiator goes (only after approval net was little more than our what every HUD and doc showed) HAFA doesn't allow seller concessions!!!
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