Hi to all! I hope you are well, however, the financial crisis is affecting everyone. Some more than others, but everyone. Recently I went through the difficulties at a deep personal level. I feel now more than ever my experiences have meaning and were designed to prepare me to help many that are troubled by this crisis.
This month the government is rolling out their most aggressive plan yet. It is called HAFA, Home Affordable Foreclosure Alternative. Foreclosures have dropped off and Short Sales are on the rise. The banks are now able to review data that demonstrates Short Sales are financially smarter for the banks. This program is designed to give Short Sales a little structure and something for all parties involved. I wanted to update you with information about the HAFA Program.
Why are the banks cooperating?
There are 2 reasons, government pressure and money. The only statistic I have seen shows that banks net about 60%, on average, from the sale of a Short Sale based on the loan amount; versus with a Foreclosure banks are netting closer to 30%. What would you prefer, 60% or 30%? We have known for years this was smarter, the banks have towait for the old data in order to act. Thanks, now that you have it, let’s do something about it!
What is HAFA ?
To understand HAFA, you have to understand the Short Sale process. The quick answer is every bank does it different and they take 3 months or more to say, “yes” or “no.” I think you can easily see how this is ridiculous.
HAFA sets a basic system in place to get quick answers, establish a home value, incentivises the 2nd mortgage to cooperate, and relocation assistance to the seller/borrower. There are pluses and minuses to the HAFA program and you should review it clearly with professionals before getting involved. It is not the best for everyone.
click here to go to the Government site on HAFA
Are YOU Eligible?
- Property is principal residence
- Mortgage Originated before Jan 1, 2009
- Delinquent now or in foreseeable future
- Homeowner demonstrates hardship
- Only applies to your first mortgage not to exceed $729,750
- Borrowers mortgage payment exceeds 31% of gross monthly income
Incentives
- Up to $3000 given to home owner for relocation assistance
- Servicer on the loan gets $1,500
- Junior lien holders get up to $6,000 to release the liens for short sale
- Paid for by the U.S. Treasury
Time Line For HAFA Process
- Bank has 30 days to approve or deny the loan modification, if denied short sale encouraged
- Borrower has 14 days to accept short sale agreement and submit listing documents
- Borrower submits “short sale” package to lender
- Bank orders appraisals and determines minimum sales price
- Borrower has 120 days to sell through real estate broker
- Realtor must submit offer to bank in 3 days
- Bank has 10 days to approve or deny the short sale offer
- Buyer has a minimum of 45 days to close
Is Your Bank Involved with HAFA
Aurora
Bank Of America
Citigroup
GMAC
HSBC
JP Morgan Chase
MetLife
Ocwen
OneWestBank
Suntrust
Wells Fargo
and more…
I hope this helps you with information about the HAFA program. Please don’t hesitate to call or email me for assistance.
Remember to watch my series of videos:
Before Foreclosure and Short Sale: (click on the blue words to go to that post)
Step 2 am I protected from the bank…Protected from the IRS and here is a video from CNN and Consumer Credit Counseling
Step 3 Save my credit through Short Sale
Step 4 Time to Clean up my Credit
Thanks-
Jeff Cameron
Keller Williams Integrity First
New changes can be found here:
https://www.hmpadmin.com/portal/docs/hafa/changetemplatesd0909r.pdf
480-652-2004