What's the difference between a "HAFA approved" and a conventional short sale?
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What's the difference between a "HAFA approved" and a conventional short sale?
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I was informed, by a reliable source, that HAFA APPROVED short sales will require that I hold the property for 90 days before selling. Any experience to this statement?
Any HAFA short sale has a no-resale clause - Can't resell for 90 days.
So the advantage to the homeowner is if they sell thru a HAFA program, they're going to get 3k to move, and there's no deficiency on the 1st mortgage, correct? There's no deficiency on the 1st in my state anyway (NC).
The disadvantage is that they are "pre-approved" for usually a price that's too high, and investors like me can't buy them unless they are willing to wait 90 days to sell them?
If during your discovery you find out it's a GSE and you would have Togo "pre approved HAFA" I agree with Smitty as why set yourself up for value disputes. On the other hand private investors and an arass HAFA is useful at times and has really improved recently. BOA made some internal changes where they handle it in house instead of sending off to a work group.
I am no fan of HAFA at all. To me it's a joke. NON-GSE HAFA = The biggest benefit is the seller can receive $3000 for moving expenses, and a full deficiency release on their FIRST MORTGAGE. You can get those same things in a traditional short sale and not have to go through the hassle. The LENDER sets the sale price and from what I've seen it seems to ALWAYS be grossly overpriced almost dooming your sale from the start.
They will pay out a MAX of $6000 to a second lien holder. Excellent if you have a second that will take 10% of the loan balance and it's under $60,000, but it can kill your deal if you have a second lien holder and possibly $80,000+ in liens. Oh and second lien holders, DON'T have to participate so even though they may release their lien, they MAY retain their deficiency rights..So what's the point of doing HAFA?
The biggest reason that I don't like it is servicers can change ANYTHING they want about the program based on investor requirements, i.e., they can change anything they want and guess what? IT'S ALLOWED!!
HAFA was created by the lenders to protect the lenders...not homeowners.
If it's HAFA approved that means they have already done a BPO and came up with a value for the property. I have to find it but there was a statistic out I think in the fall last year that a little over 8000 HAFA short sales have been granted and mind you that number was mixed in with Deed in Lieus, which I find it fascinating they didn't break out the DIL number from the short sale number. There were WELL OVER 100,000 traditional short sales approved last year.