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	Need To Qualify For HAFA?

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 1^stlien 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 1^st and 2^nd 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.

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