HAFA Short Sale Program

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HAFA Short Sale Program

This is a group to discuss the HAFA (Home Affordable Foreclosure Alternatives) Program, which is to streamline the short sale process.

Members: 584
Latest Activity: Jun 16

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There seems to be ALOT of discussion on the site about the new HAFA short sale streamlining program that went into effect on April 5th. I figure at least we can try to keep some of the discussion together on here! The HAFA or Home Affordable Foreclosure Alternatives program is part of HAMP (Home Affordable Modification Program) and is an attempt to streamline the short sale process that went into effect April 5th 2010. Below we have also posted a general breakdown and information on the HAFA Short Sale Program Guidelines.

CLICK HERE for the complete version. Here is the "condensed" version we made up of the program, we now have a printable version of this breakdown along with a list of participating servicers and lenders on the preferred partners site!

***Program Update - Fannie Mae recently joined the HAFA program for short sales, follow this link for their specific docs and more information: https://www.efanniemae.com/sf/servicing/hafa/

 

12/18/10 Home Affordable Foreclosure Alternatives Policy Update- There were many new changes to the HAFA short sale program that just went into effect with this new supplement.  We will update all general HAFA program guidelines shortly for our agents.  There were some important improvements to the program -

1.) Verification of income is no longer required.  In other words, borrowers do NOT need to prove that their payment is greater than 31% of their income.  This is essentially a "stated income short sale"

2.) Property does not need to be occupied

3.) 2nd position lien holders WERE capped out to receive a maximum of $6,000 OR6% as a contribution from the 1st (whichever is less).  They now removed the "6%" from the guidelines completely.  (in other words, a $60K 2nd loan could NOW recieve up to $6,000 from 1st, where before the maximum allowed would have been $3,600).

 

Home Affordable Foreclosure Alternatives documents:

HAFA Short Sale Agreement (SSA)

HAFA Request for Approval of Short Sale (RASS)

HAFA Alternative Request for Approval of Short Sale

HAFA Deed in Lieu for Foreclosure Agreement

HAFA Data Dictionary

HAFA Form 4506-T Request for Transcript of Tax Return

HAFA Hardship Affidavit

HAFA Request for Modification and Affidavit (RMA)

 

Below is our basic breakdown of the HAFA government short sale program.  For a complete HAFA training portal, including Fannie Mae and Freddie Mac HAFA guidelines as well as training on the HAP Military short sale program, see the CSSG Certified Short Sale Guide short sale training course.

 

This is copyrighted content.  Please DO NOT COPY or reuse this content in ANY way!

 

HAFA - Home Affordable Foreclosure Alternatives

  • HAFA (Home Affordable Foreclosure Alternatives) is not the law. It is a set of guidelines servicers can elect to follow.
  • Went into effect April 5, 2010.
  • Does not apply to FHA or VA loans.
  • Applies to 1stlien holders (non GSE mortgages).
    • Fannie Mae and Freddie Mac have their own set of guidelines listed below.
  • Offers incentives to borrowers, servicers and investors.
    • Borrowers receive $3,000 to help with relocation expenses.
    • Servicers receive $1,500 to cover administrative and processing costs.
    • Investors receive up to $2,000 for allowing a portion of the sale proceeds to be distributed to subordinate lien holders.
  • Limits the amount of time a lender is given to respond to the short sale offer.
  • Requires that the lender waive their right to pursue a deficiency judgment.
  • The servicer cannot charge the borrower for processing fees of any kind and is required to pay all out of pocket expenses.
  • Limits the claims made by subordinate lien holders.
  • Does NOT require that a borrower’s financial information is verified.
  • Subordinate lien holders will receive some form of payment.
  • Includes alternative deed-in-lieu programs.
  • The transaction must be considered at arm’s length.
  • The buyer may not resell the property for at least 90 days.
  • Expires on December 31, 2012.

In order to qualify:

  • The loan must be the first mortgage.
  • The loan must have originated before January 1, 2009.
  • The unpaid balance must be less than or equal to $729,750.
    • The amount may be exceeded in some cases for two- to four-unit dwellings.
  • The property must be, or recently was, the borrower’s primary residence.
  • The property must be listed with a licensed real estate professional.
    • The real estate commission cannot exceed 6%.
    • The servicer may not require that the real estate commission should be reduced as a condition of the sale. However, in disputes between 1st and 2nd position lien holders, an agent contribution may still be required.

Timeline:

  • Possible HAMP eligible borrowers must be considered by servicers for HAFA within 30 days of the date the borrower:
    • Cannot qualify for a trial loan modification.
    • Did not successfully complete the trial loan modification.
    • Missed two or more payments consecutively during the trial modification process.
    • Requested a short sale or deed-in-lieu of foreclosure.
  • The servicer issues two documents which can be sent proactively or at the request of the borrower.
    • Short Sale Agreement (SSA)
    • Request for Approval of Short Sale (RASS)

Approval

Within 10 business days of receiving the RASS and all required attachments, the servicer must approve or deny the request and inform the buyer. If the request is disapproved, a statement of reasoning must be given.

The first mortgage lien must be released in accordance with local or state laws or regulations. If there are none set in place, the lien should be released within 30 business days from the date the servicer receives payment and satisfies the mortgage.

 

Reasons for Cancellation:

  • Improvement in borrower’s financial situation.
  • Borrower or listing broker does not act in good faith in the listing, marketing, or closing aspect of the sale.
  • Any fraud or misrepresentation in the sale.
  • Substantial change in property’s condition or value.
  • Bankruptcy is filed by borrower.
  • Any litigation that happens (or is in danger of happening) that would affect the title, such as divorce or probate.

Please see the CSSG Online Training Designation for complete HAFA program trainingincluding Fannie Mae and Freddie Mac Guidelines, as well as training for the HAP military program.

 

Please do not copy or reuse this content in ANY way!  This is copyrighted content of First Coast Realty Associates and The Short Sale Specialist Network.


 

How To Short Sale A Home

 

What issues or concerns do you have with the HAFA government short sale program? Lets discuss ANYTHING to do with HAFA on here!

Discussion Forum

HAFA short sale - First Loan does NOT want to give $8500 to Second Loan

Started by Sara Mehrpouyan Los Angeles CDPE. Last reply by Kevin - Greenville, SC Mar 23, 2013. 10 Replies

HAFA approved short sale (1st loan is with Pennymac) - they do not want to give full $8500 to 2nd loan. The first may pay UP TO $8500. Has anyone had a 2nd accept less than $8500 recently with HAFA?…Continue

Tags: sale, 8500, pennymac, citi, short

Once there is a Foreclosure judgement, does it disqualify you from HAFA?

Started by wayne brooks. Last reply by wayne brooks Aug 3, 2012. 5 Replies

Am I correct that if the bank gets the foreclosure Judgement, prior to HAFA approval, that the Owner no longer qualifies for HAFA?Continue

any way around a 2nd mortgage who won't participate in HAFA?

Started by Amie Jensen. Last reply by Joe Beauchamp Jun 27, 2012. 9 Replies

I have a 1st with PNC (Fannie investor) who said my clients were eligible for HAFA.  The 2nd is with Nationstar, a private investor & they will not allow HAFA.  Has anyone had any luck working…Continue

Tags: allow, participate, won't, heloc, pnc

how many times can you apply for a HAFA short sale approval when buyers bail out?

Started by Carmen Chavez. Last reply by Anwar hossain Jun 17, 2012. 4 Replies

need your help...I have a HAFA approved short sale with an offer that was HAFA approved...the Wells Fargo hafa approval expires the end of May...the buyer with the approved HAFA offer is bailing…Continue

HAFA DOCS FOR 2ND LIEN HOLDER QUESTION

Started by Donal J Dowling. Last reply by Joe Beauchamp Jun 1, 2012. 3 Replies

Greetings to AllI have done many, many short sales ,but this is my first HAFA to be actually approved .Wells is the first and I have the approval from them with the 6k for the 2nd which happens to be…Continue

HAFA government short sale program Successes and Failures

Started by Mike Linkenauger. Last reply by Terry L. Osburn, SFR Apr 1, 2012. 7 Replies

We have had the HAFA (Home Affordable Foreclosure Alternatives) government short sale program for just about two years now.  I just wanted to see HOW you guys think the HAFA program has worked so…Continue

Tags: HAFA short sale process, Qualify for HAFA Program, government short sale program, HAFA program, Home Affordable Foreclosure Alternatives

NEW RMA form

Started by Steven Pawera. Last reply by Steven Pawera Mar 23, 2012. 3 Replies

We've all know about the problem with the old RMA, and having to explain to sellers, 'yes it says 'modification' but it's also used for your short sale'.We now have a 'new' form to attempt to address…Continue

HAFA program extended and new guidelines announced

Started by Mike Linkenauger. Last reply by Tamilyn Simard Mar 15, 2012. 10 Replies

The Obama Administration has announced updates to its HAFA Program which will help expand the…Continue

Why doesn't a FHA loan qualify for HAFA?

Started by TJ. Last reply by Connie Martin Jan 6, 2012. 6 Replies

I am in the process of working with Wells fargo to short sale my home. i want to get out immediately but they say I have to have my home on the market for 120 days. I wish I could do the HAFA but but…Continue

BofA HAFA and FNMA Investor

Started by Tamilyn Simard. Last reply by Kevin - Greenville, SC Dec 14, 2011. 7 Replies

I just found out on July 1st that FNMA is now making all of their servicers work their HAFA short sales and BofA had to pull my file from UTLS who has had the file since early April with an offer. I…Continue

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Comment by Joy Baker on January 7, 2013 at 6:09pm

Hi Folks - There seems to be a lot of confusion about the HAFA program and it's various incarnations (Fannie, Freddie and Treasury).  This blog post might help:

http://www.southernnhrealestateandshortsales.com/post/3573084/is-th...

Wishing you all a happy and successful New Year!!!!

Comment by Rob E. Kirchner on January 7, 2013 at 4:24pm

I know that the tax forgiveness act was expiring (and was renewed) however, this is the first I have heard that the HAFA program had a 2013 expiration date.

 

 

Comment by L. Marvin Bultena on January 7, 2013 at 12:22pm

The HAFA Program was set to expire on Dec 31, 2012.  Has it been extended in the "Fiscal Cliff" or some other new law?  Does anyone know?  Thanks.

Comment by Deborah Weiss on June 18, 2012 at 9:07pm

my client was just HAFA approved but was over appraised. Wells wants 345K list and im getting offer nearer to 290K.  My question, can the homeowner contribute cash on a FREDDIE HAFA?   Or has anyone disputed the appraised value and after how long can you dispute.

Comment by Kevin - Greenville, SC on April 28, 2012 at 2:50am
Comment by Kevin - Greenville, SC on April 28, 2012 at 2:49am

What is the HAFA escalation process?
Issues with the servicer should be addressed by the participating agent, not the homeowner. If you have already worked through your normal channels to contact the servicer and the issue has not been resolved, take the following steps.12 First, you should gather all the necessary information on the homeowner:

  • Homeowner's Name
  • Property Address
  • Servicer Name
  • Servicer Loan Number
  • Foreclosure Date (if applicable)
  • Counselor Name & Organization
  • Counselor's Email
  • Counselor's Phone
  • Counselor's Relationship to Homeowner

Next, if you are an agent, you should contact the HAMP Solution Center for support:

HAMP Solution Center
Phone: 1-866-939-4469 
Fax: 1-240-699-3883
escalations@hmpadmin.com

Comment by Jim Holbrook on April 25, 2012 at 4:01pm

I received an SSA from IndyMac/One West with a preapproved net to the bank, not an approved selling price.  SSA stated reasonable and customary closing costs could not exceed 3%.  We did the termite report and found $3,300 of damage. We submitted the estimated HUD with an offer which gave the lender the SSA approved net.  

Indymac/OWB stated the investor is denying the termite and want their net that was approved on the original SSA to be raised by that amount.  The  HAFA Directive 09-09 Revised  states that termite repairs are considered customary closing costs.  

Does anyone have experience challenging lender decisions that are contrary to HAFA guidelines?  Do you have any contact numbers?

Comment by Donal J Dowling on April 23, 2012 at 10:36am

Greetings to All

I have done many, many short sales ,but this is my first HAFA to be actually approved .Wells is the first and I have the approval from them with the 6k for the 2nd which happens to be GMAC. The bank statements and paystubs used to obtain the approval were all those supplied at the outset ,Dec, 2011, and having received the approval last week from the first,Wells , I asked the 2nd ,GMAC , for their approval .

GMAC are seeking updated information like bank statements and paystubs and are not accepting the ones used to obtain the Wells approval.

Seller has moved to another State and is now working and earning money . He  could not find suitable employment in Florida .

Such requests are common in regular short sales , but I am inquiring from those agents who have been through this if GMAC will try try to get more than their 6k ,even though they got TARP money .

Kindest regards

Donal

Comment by Carmen Chavez on April 19, 2012 at 8:53pm

need your help...I have a HAFA approved short sale with an offer that was HAFA approved...the Wells Fargo hafa approval expires the end of May...the buyer with the approved HAFA offer is bailing out...we are now without a buyer, we will need another buyer/offer...

 

My Questions: does the HAFA ss approval end when current offer is cancelled or on the date the HAFA approval expires? if a new offer is accepted, will we need to re-initiate the HAFA short sale approval application process again? or can the new buyer come in under the current HAFA short sale approval as long as we close before the end of May...if needed, will wells fargo extend the HAFA expiration date? if the HAFA approval dies with the current deal or it will expire before the new offer is scheduled to close the transaction, can we apply again for HAFA approval with the new buyer/offer? how many times can we apply for HAFA approval?

 

your help will be greatly appreciated...

Comment by Joy Baker on April 2, 2012 at 10:29pm

Yes it is available for Fannie and Freddie, Aileen, but the guidelines are different.  All the lovely "make it easier" guideline changes that Treasury keeps spouting are only for non-GSE loans AND if you read the fine print you realize that it says that they (non GSE investors) don't actually have to abide by any of the guidelines.  They can make their decision on a loan by loan basis...LOL.  It's all smoke and mirrors folks.

 

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Discussion Forum

HAFA short sale - First Loan does NOT want to give $8500 to Second Loan

Started by Sara Mehrpouyan Los Angeles CDPE. Last reply by Kevin - Greenville, SC Mar 23, 2013. 10 Replies

HAFA DOCS FOR 2ND LIEN HOLDER QUESTION

Started by Donal J Dowling. Last reply by Joe Beauchamp Jun 1, 2012. 3 Replies

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