Replies to This Discussion

Permalink Reply by Carmine R Biello Jr on July 17, 2012 at 7:46am

Hi Joan, the HAFA  incentive is reduced from the net proceeds to the lender. It is on the closing statement and part of the closing costs.

 

Congratulations and Best of Luck!

 

Carmine

Permalink Reply by Joan Vaca on July 17, 2012 at 8:13am

so if the hafa approval states 9% for total closing costs, that incentive is not part of the 9%, right?

My negotiator was trying to tell me to include it in the 9% closing costs, which doesn't make sense to because it is an incentive.

Permalink Reply by joe beauchamp on July 17, 2012 at 8:50am

You are correct. To me, closing costs are the costs of the ...uh.. closing. But normal bank terminology has a separate line for commission and prorated taxes, etc. The HAFA $ go up there in "not expenses", too. The closing officer needs to know this stuff, not the negotiator, so the negotiator is probably just reaching the logical conclusion - and doing the sometimes thing from bank employees of talking through his hat.

Permalink Reply by Joan Vaca on July 17, 2012 at 9:04am

well this negotiator is trying to tell me that I include the 3,000 in the 9% and I think she is incorrect.SSA states that it is an incentive that is payable from the net proceeds at closing.  This is a freddie mac hafa with Chase.  She also tells me that they won't allow an FHA sellers contribution because that is part of the closing costs....I don't think she knows what she is talking about.

Permalink Reply by joe beauchamp on July 17, 2012 at 9:42am

Maybe Chase escalations can help? 877-496-9025 - I haven't done a Chase deal in a while. Freddie Mac can make crazy demands and I just had them try to screw over a buyer (before he walked) by only allowing 0.6% sellers contrib - no, not 6% - 0.6%. And, FHLMC HAFA is not HAFA, neither is FNMA - they are HAFA-like programs with the same name. So, you are limited to Freddie help from Freddie 1-800-FREDDIE [email protected] (good luck with that) for HAFA and their own rules and getting to someone at Chase who knows what he is talking about and wants to help you. Sorry..

Permalink Reply by Joan Vaca on July 19, 2012 at 6:18am

thanks Joe.  I still can't get my negotiator to understand the the real estate prorations for the taxes dues in nov 2012 are not part of the closing costs but a reduction in amount due to seller; she says its a closing cost and has to be included....what a nightmare  I have gone to Chase escallations and they think the negotiator has a mistake in her hud but she is standing firm.  Waiting on a call from her manager so we will see.

Permalink Reply by joe beauchamp on July 20, 2012 at 2:50am

Does Chase use a closing officer after you get the approval? Several times, when the negotiator at BofA had his brain hooked up to the coffee grinder in a similar fashion, I would just fix up the HUD to please the imbecile then when I got the approval, explain to the closing officer that I cannot work with 2+2=7 and he, having an IQ way up there ..  above 100, would fix things. HAFA complicates things and I don't know if you have the same structure over at Chase.  Maybe that helps? (Oh, and my apologies to imbeciles for putting them into the same class as some of these negotiators..)

Permalink Reply by Joan Vaca on July 20, 2012 at 12:29pm

I don't think believe that their is a closing officer like boa at Chase.  The last one I did with Chase had the final hud going to the negotiator...I thought of fixing the hud to get it approved but that won't work if the same negotiator will approve the final....back to trying to talk to someone above her so we'll.  Thanks Joe

Permalink Reply by Ute Ferdig on August 21, 2012 at 5:35pm

It may be too late for your HAFA short sale, but I thought I share what I just read in the official Freddie Mac HAFA guidelines.  I was reviewing the HAFA guidelines as Freddie Mac announced today that the program will be retired at the end of 2012.  So here is what I found in regards to allowable transaction cost:

"Minimum acceptable net proceeds The Servicer must document the minimum acceptable net proceeds from the sale of the Mortgaged Premises in the Mortgage file prior to preparing and offering an SSA to the Borrower. The minimum acceptable net proceeds for a HAFA Short Sale are the 90 day "as is" marketing value as determined by the Broker's Price Opinion (BPO) or appraisal minus (1) the Allowable Transaction Costs as determined below, (2) the maximum amount payable to subordinate lien holders under Section D65.7(b), and (3) the Borrower relocation incentive paid under Section D65.8(a). For example, if the 90 day "as is" marketing valuation of the Mortgaged Premises is $100,000, then the minimum acceptable net proceeds will be $82,000:

$100,000		(gross sales price)
- $9,000		(maximum Allowable Transaction Costs)
- $6,000		(maximum aggregate payment to subordinate lien holders)
- $3,000   $82,000		(Borrower relocation incentive)   (minimum acceptable net proceeds)

 

Allowable Transaction Costs Freddie Mac will pay up to a total of 9% of the final sales price towards (1) reasonable closing costs customarily paid by a seller in the jurisdiction where the Mortgaged Premises are located of up to 3% of the final sales price, and (2) real estate brokerage commissions of up to 6% of the final sales price. Any closing costs or commissions that exceed these percentages will not be paid by
Freddie Mac."

 

Based on the above, the negotiator is clearly wrong.  You may want to point the negotiator to D65.5 of the Freddie Mac HAFA servicer guidelines effective 6/15/2012.

Permalink Reply by Joan Vaca on July 19, 2012 at 6:19am

I settled the hafa issue but now, negotiator telling me the reductions in amount due to seller are part of the closing costs!  It never ends.....

Permalink Reply by Joan Vaca on July 19, 2012 at 6:22am

thanks Carmine.  Do you know if HAFA considers the real estate prorations for taxes due Nov 2012 are part of the closing costs...thats what I am being told by the negotiator and have to include it in my 9% allowable closing costs. This is a HAFA Chase/Freddie mac  loan.

Permalink Reply by Ute Ferdig on August 11, 2012 at 5:49am

I closed a Chase HAFA deal just a few weeks ago.  We had a 11% closing cost cap because it was not a Freddie Mac loan, but the relo assistance and property tax proration were indeed part of the closing cost.  So was the payoff to the junior.  I have always thought that Freddie Mac's 9% cap was a problem, particularly when you have a junior lien payoff and 6% commission because that only leaves 3% for non-commission closing cost which many times is not enough.

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