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: 586
Latest Activity: Dec 20, 2016

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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

Comment Wall

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You need to be a member of HAFA Short Sale Program to add comments!

Comment by Kevin - Greenville, SC on March 3, 2012 at 7:17pm
Comment by Dawn Maloney on March 3, 2012 at 7:14pm

That is good, Kevin. Thank you. Does anyone know what happens if someone is approved in the HAFA program but has to drop out, due to family situations such as death or job loss?

Comment by Kevin - Greenville, SC on March 3, 2012 at 7:12pm

I figure the Mortgage Forgiveness Act eventually will too, probably before the election.

Comment by Mike Linkenauger on March 3, 2012 at 7:10pm

Lets hope the HAFA short sale program gets extended SOON!  If we DON'T extend it along with the Mortgage Forgiveness Debt Relief Act, it will be disastrous on the economy and housing market in general!

Comment by Sara Mehrpouyan Los Angeles CDPE on February 17, 2012 at 4:17pm

So far -- I cannot say that it's been easy. But, it depends on the lender too, I think. Successful with Bank of America. Not so great with Aurora. Yes, I think they should extend it. 

Comment by Mike Linkenauger on February 17, 2012 at 2:45pm

How has everyone's experiences been with the HAFA program lately?  Has it become easier?  Do you think it will or SHOULD be extended after this year?

Comment by Kevin - Greenville, SC on December 14, 2011 at 2:18pm

Hi Kevin,

 

Actually, we are still continuing to utilize vendors for files that do not have offers when they are solicited in shortsale.  For files that open in HAFA with an offer those will be handled by our internal team.

 

 

 

 

Thanks,

 

V. Poynter

Bank of America Home Loans

VP, Mortgage Servicing Unit Manager

Comment by Mike Linkenauger on December 14, 2011 at 2:10pm

I just added MUCH more HAFA training information to our main consumer page on the HAFA short sale program - http://www.short-sale-specialists.com/sellers_page.shtml.  About halfway down the page an excellent program breakdown starts.  This was previously only available to our members or part of our training course.

Comment by Sharon Sapp on December 14, 2011 at 2:03pm

I'm doing a HAFA with Colonial Savings and I have to admit, it's the easiest short sale I've ever done. They were working with the home owner and gave them some paperwork that told them to contact a Realtor (I was already sort of working with them) and put the house in the market. They told me what their bottom line was and what it was appraised for. I had put the house on the market about a week before the appraisal and I was priced $5k higher than the appraisal so it was good. Got an offer the next week. One counter offer and the approval is in the works. Hopefully, the approval letter won't be as long as what some folks say here, but based on my experience with them so far, I say "Give me all your short sales!"

Comment by Mike Linkenauger on December 14, 2011 at 1:35pm

What is your RECENT experiences with the HAFA program?  Has it become easier and more effective lately? 

 

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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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