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Short Sales and HAFA- Defining The Details For Real Estate Agents and Homeowners

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Real Estate Broker/Owner with ACTIONAGENTS.NET Oregon 780301468

This is the second of a series on the impact of the new HAFA guidelines on Short Sales around the US.

The continuing series is being written by Katerina Gasset of Florida -- a great agent with endless experience with short sales.

Not everything in this series applies in Oregon, but this is great information.

Original content by Katerina Gasset 13253167-SA00

HAFA- Defining The Details- Part II

Since I wrote the post, Let's Get To The Truth About HAFA- The New Short Sale Guidelines- there have been more questions raised. Like I said in that post we will take these HAFA guidelines apart so that you will be able to understand how this is going to help or not in your short sales.

The HAFA program is an acronym for Home Affordable Foreclosure Alternatives- Short Sale and Deed-In-Lieu of Foreclosure. It is known in the industry as the Supplemental Directive 09-09.

Let's continue with the analysis of HAFA:

The most important thing to understand about this directive- the HAFA program is that is provides, guidance to servicers for first mortgages that are NOT guaranteed by Fannie Mae or Freddie Mac.

 The word that you need to pay attention to in this sentence is that these are guidelines. This is not the law. These are not really even policies or rules. Guidance is a suggestion not a must do.  

Servicers are the companies that you pay your mortgage to. Most people pay their mortgages to servicing companies and not the company that owns the note on your mortgage. This is confusing sometimes since the names of your servicers are names of banks. So you could be making your mortgage payments to Chase but Chase is just the servicer and your note may actually be owned by Wells Fargo. So you will not negotiate directly with Wells Fargo- Chase will do that part. It could be the other way around also. This is because your note is sold to other companies and sometimes your note could be sold to many different companies throughout the term of your note. I wrote an article that goes into detail about the servicers in this featured post about loan modifcations and short sales getting turned down by the servicers.

The HAFA program is a volunteer program basically although those servicers that have participated in the HAMP program must offer the HAFA program to homeowners under certain circumstances. The servicers have to opt into this program and they have to do this by December 31, 2009.



  • The servicers get to decide the extent to which they want to work with short sales and these guidelines don't have to take effect until April 5, 2010 although the servicers who are in HAMP can move your file into HAFA before that date.



  • Your loan must be HAMP eligible and meet other requirements in the guidelines in order to be eligible for the incentives to you and to your servicer.



That is an explanation of just the first page of the HAFA guidelines.


There are servicers who are already starting to use the HAFA program. The problem is that the servicers are already making mistakes in using this program.

Case In Point-


We have a short sale listing that is with Chase. We did not get to use our regular negotiator at Chase on this file. The negotiator we did have sat on his tush with this file and did not work on it. Then after 30 days of waiting without a BPO order, the negotiator it was assigned to sent it back to us along with a whole set of HAMP paperwork!

HAMP is the loan modification program that is a joke. Anyways- our seller does not qualify for the HAMP program on this property because it is an investment property. The homeowner does  not live in the house and thus is not eligable for HAMP or HAFA.  All the negotiator had to do was look at the file we sent in to see that this is an investment property and saved us all time. Now we are going to have to teach this negotiator how to use the HAFA program since they don't know how.

If the property you are doing a short sale on is not your principle residence you are not quailified for HAFA but you may still be able to get a short sale approved through normal short sale channels.

Don't get over excited about the 10 days that you read about everywhere. That ten days is NOT from the beginning of the process to the end. We will go into those details in the next post in this series on HAFA.

There are some positive things for the homeowner and those are:

  • you will get up to $1500 to help you with moving expenses from the servicer upon a successful closing,
  • the first note holder has to remove any deficiency and can not puruse a deficiency. This does not pertain to second mortgages or HELOCs.


We will continue through all 43 pages of these guidelines section by section- the sections that are important to homeowners and short sale agents. 


 

For more information about Florida Short Sales- click here.      

 

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Short Sales and HAFA- Defining The Details for Real Estate Agents and Homeowners-was first published on South- Florida-Luxury-Living.com.

Copyright © 2009 By Katerina Gasset, All Rights Reserved.*Short Sales and HAFA- Defining The Details For Real Estate Agents and Homeowners.

 


 

 


 

 


Posted by

 ***********************

 

Jim Hale

Principal Broker / Owner

Graduate, REALTOR Institute             e-PRO

2015 Member, Million Dollar Club of Lane County

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