On April 5, 2010, the HAFA program became mandatory for all for non-GSE (non-Freddie Mac and Fannie Mae loans) servicers participating in the HAMP program. According to the Making Home Affordable Program Servicer Performance Report issued on July 26, 2010, although some of the servicers were slow to implement the program, as of the end of June 2010, all of the eight largest servicers in the country have started offering HAFA short sales to homeowners.
Additionally, on August 1, 2010, the new Fannie Mae and Freddie Mac HAFA programs became mandatory for all servicers of Fannie Mae and Freddie Mac loans. The new Freddie Mac and Fannie Mae HAFA programs, as implemented on August 1, 2010, did not change of the guidelines that were issued on June 1, 2010. Now, all three HAFA programs are in effect and fully operational. However, there are some differences between each of the programs that are important for agents to understand that affect provisions ranging from borrower eligibility to real estate commissions. To see a chart outlining some of those differences, click here.
With Freddie Mac and Fannie Mae HAFA programs in effect, the eight largest servicers in the country who also participate in HAMP for non-GSE loans they service now control the vast majority of homeowner loans in this country and have overnight made HAFA a significant part of the short sale arena. For your information, those eight servicers that are now offering the HAFA program to borrowers are:
America Home Mortgage Servicing
Bank of America
JP Morgan Chase Bank
Litton Loan Servicing
One West Bank
Wells Fargo Bank
If any of your listings involve one of those servicers, you can be assured that they have a HAFA program in place. Additionally, all other non-GSE servicers and lenders (non-Freddie Mac and Fannie Mae) that participate in the HAMP program also must now have their HAFA program available. For a current list of those other servicers and lenders that are subject to the HAFA program, click here, and see page 11.
As can be expected with the implementation of any new national program of this size, there are some kinks in getting everything running smoothly. Some agents are experiencing longer delays than anticipated while the servicers’ employees are educating themselves on the HAFA process, forms and procedures. With additional training and time, these issues will work themselves out and HAFA may finally provide the solution for standardized and fast short sales that the real estate market has been looking for the past several years.
HAFA provides standard process, documents, timelines, and incentives to servicers, borrowers, and investors to enable short sale and deed-in-lieu of foreclosure.
Starting from April 5, 2010 until December 31, 2012, servicers participating in Home Affordable Modification Program (HAMP) must implement HAFA and eligible borrowers unable to complete HAMP must be considered for HAFA options before foreclosure.
HAFA helps borrowers to receive Pre-approval short sales terms before listing their property for sale with the help of a Real Estate Agent.
Requirement for HAFA is similar to HAMP and borrower's financial and hardship information already collected under HAMP will be used:
1. The property is the borrower's main residence
2. The mortgage loan is a first lien mortgage originate on or before January 1, 2009
3. The mortgage is delinquent or default is reasonably foreseeable
4. The current unpaid principal balance is equal to or less than $729,750 for one unit properties.
5. The borrower's total monthly morgage payment exceeds 31% of the borrower's gross income.
Additional borrower requirement includes:
1. Borroweres must be fully released from future liability for the first mortgage debt
2. Provide clear and marketable title and maintain the property in good condition for the duration of the
Short Sale Agreement
For more detail or any question regarding the HAFA program, please contact Ruth Biafora at 818-601-5765