I need some advice folks.
I have clients that are trying to get into the HAFA program. They have a first and second both with BOFA, and we are moving along, at their pace of course. I have all my docs uploaded to equator and the apprasail has been done over a month ago, and no word. I called ABO (UTLS), and actually got someone very helpful on the phone; after 5 other calls. I still had not made contact with my assigned negotiator after many emails and phone calls. The person I spoke told me that the file said the listing price should not be any less then $375k. This unit happens to be very nice and feel that we can get more for it. Does it make any sense to list it for more then $375k? Will this hurt the deal if it is listed for $425k? Will they look at the listing price and say, "we need to get another appraisal on this property". If I bring them an offer for $415k, will it look more favorable on the HUD, or will it hurt my Seller and the progression of the deal?
Any comments would be fantastic.
2nd question.
At what time should I address the fact that their are two loans? Do I need to wait to have an offer before we can talk about how this is going to be handled or is automatic in the HAFA program?
Any words of wisdom will be much appreciated. I have done short sales, but this is a first using HAFA.
Thank You.
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Replies
Q.
If a Servicer is a HAFA participant and in the 2nd position, do they have any obligation to accept what the first is offering?
A.
There is no legal obligation to do so. However, many of the largest servicers have agreed informally to accept $6,000 as part of a HAFA transaction as long as the borrower has a verified hardship.
L. Maggiano
Director of Policy
Homeownership Preservation Office
Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, DC 20220
Wendi is right. The second lien holder doesn't have to adhere to the HAFA protocol, however where they are both with BOA you should be safe.
You should be doing the happy dance if BOA thinks its worth $375 and you think it's worth $415. You're on your way to a solid sale if that's the case. Do you think they'll cry if you get them more $$ than $375?? No WAY. It's usually the OPPOSITE with HAFA where they THINK it's worth $415 and you have an offer at $375 which is why I can't stand HAFA.
The only thing your seller needs to be concerned with so long as BOTH liens forgive the deficiency is any tax ramifications. Make sure this is not a second home otherwise the seller won't qualify for the mortgage debt forgiveness act. Unless the homeowner is insolvent, they will have to pay taxes on the forgiven debt if it's NOT a primary residence. If it's a primary residence they will qualify ONLY on the first lien. Second liens typically are subject to tax ramifications unless the homeowner is insolvent You should direct them to an accountant.
Quick insight to your second question. We just completed a 2 lien short sale, Green Tree being the jr. They decided they would not participate in HAFA.. They required 10K to approve and no deficiency waiver. By not taking any funds from the first lien holder (who was in the HAFA program) they did not have to participate with HAFA regulations. The borrower had to negotiate with the jr. out of escrow in order to receive an approval. First and, so far, only time I have had to deal with that.