If you haven’t heard of the HAFA (The Home Affordable Foreclosure Alternative program) Short Sale, it is another “alphabet soup” government program (think HARP, HAMP, etc) which is dedicated to providing government incentives to lenders to approve short sales and streamline their processes. The point for HAFA short sale is to give lenders a financial incentive to approve short sales vs just foreclose, as well as provide streamlined timelines for processes and procedures for the short sale. From this agent’s perspective, the results have been mixed. Most lenders have not been adequately staffed and trained for this program, therefore HAFA short sales that were supposed to take less time have been taking more time, and on a large scale many have not successfully closed. With the acknowledgment of this, the government has made some key changes to the program including:
– HAFA no longer requires that servicers verify the borrowers finances
– HAFA no longer requires servicers to determine if the borrowers monthly payment is higher than a 31 percent debt-to-income ratio.
– HAFA no longer requires second-lien holders to agree to accept 6 percent of the unpaid principal balance owed them, up to $6,000. Servicers now decide who gets paid how much, with a cap still at $6000.
– HAFA now requires borrowers seeking a short sale get an answer/agreement within 30 days.
Hopefully most lenders who are faced with a growing number of defaults will jump onboard and follow these guidelines. These changes to the HAFA short sale should help make the program more effective and help neighborhoods prevent the doom and gloom of a large number of foreclosures. Here is the full article from CNBC Realty Check.
Have a question on how to apply for a HAFA short sale or more info on short sales in general? Contact us!
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