IS HAFA’S PROGRAM A BREACH OF HUD’S FAIR HOUSING ACT??

Everything the government touches turns in to crap.

Of course, this could be considered "spreading the wealth".

Diane, While I understand your point I see absolutely no connection to Fair Housing Laws. fair Housing Laws are serious stuff based on...."race, color, national origin, religion, sex, familial status or handicap"

Having no equity due to declining property values is nothing more than an economic condition. I see HAFA as a step in the right direction. It's not perfect biut I do see it helping many.

I had not heard of this. Thanks for sharing the info.

Anything to help speed the 'short sale' process is a good thing but not necessarily a perfect one. With the 'shadow' inventory looming on the horizon, the government is trying to prevent a hugh inventory from creating a devastating effect on the market. Let's hope the goverment has it right This Time.

Fair housing, unfortunately does NOT take into account 'income' . . . discrimination based on: gender, handicap/disability, ethinicity, religion, etc.

Fair Housing:  Title VIII of the Civil Rights Act of 1968 (Fair Housing Act), as amended, prohibits discrimination in the sale, rental, and financing of dwellings, and in other housing-related transactions, based on race, color, national origin, religion, sex, familial status (including children under the age of 18 living with parents or legal custodians, pregnant women, and people securing custody of children under the age of 18), and handicap (disability).

There is no protected class for income, financial standings/positions, etc.

If FHA (under HUD) did anything wrong . . . it was that they DIDN'T make it a mandate to DISQUALIFY borrowers based on income . . . more to the point . . . not being ABLE TO AFFORD is not a protected class.  A lot of people would not have been approved if they would have said, "I'm sorry, but if you lose your job, how will your repay the debt?" 

If I had a rental, and someone didn't have the income to pay the rent, I could say "Sorry, I can't rent to you, you don't earn enough."  And that would not be considered discrimination. 

I understand your point, but there isn't any breach.  But, Lenn is right.  Whatever the governement touches . . . well, it's NOT the Midas Touch!

It s my understanding that financial insolvency or inability to pay is the bottom line requirement for a short sale.

BTW - The way I see it, the government didn't get home buyers and our industry into this mess. The government didn't offer unsustainable and "creative" loan products or change the lending standards in order to "sell" more loan products to people who couldn't really afford them. But what ever they can do to help us out of the mess...well, I'm for it.

Face it -- we and our sellers need the help. I think it would be more beneficial to do what we can to help make the government efforts work than to bash them for trying.

Diane, this definitely fits with this government's biased practices as it tries to massively redistribute wealth and destroy American businesses. There is definitely a rash of favoritism being shown.

I just took the FSR class and much about this new "rule" was discussed. It seemed to me that it fit fair housing stardards, but it also seems that a really smart person could find a "loophole" somehow. I also wonder about the "reasonable commission" clause in there set at 6%. That seems almost like it is setting a stardard commission...yes, I know we could always charge LESS than 6%...but who in their right mind...(I'm not going to go there and get myself in trouble. You can finish the statement, if you've ever listed or sold a shortsale or REO you know where I'm going). That is the part that seems shady to me.

It doesn't seem to be covered under "Fair Housing" law, but it's definitely not FAIR!!!

@6 -- HA HA HA . . . you have got to be kidding.  Can you say F-H-A?  You have no idea what the govenment "didn't do" in March 2008

Diane,

Just this past week I was on a conference call with Bank of America and Wells Fargo and my understanding is a homeowner DOES NOT have to go via HAMP and then HAFA, there is still the "traditional" short sale process.  and yes the word "traditional" was used several times. One does not have to try for a loan mod first and then go short sale.  I am positive someone out in Rain Land was also on this call and would have heard the same thing.

Having been one of the strong ones all my life I thought about that exact thing the other day. Just another example of the socialist mentality taking over. When families that have sacrificed having "extras" in order to meet their obligations responsibly see other families who had all the "extras" but did not DO EVERYTHING IN THEIR POWER to meet their obligations get their debts forgiven without ANY stigma attached the responsible familiy has gotta be thinking, "When exactly did the virtue of personal responsibilty die?" Why is it OK to get into debt up to your eyeballs and then just let it go? Elva - the #6 commentator apparently never heard that "We're from the government and we're here to help" is the biggest oxymoron ever perpetuated upon the public at large. Wasn't it the 1997 Neighborhood Revitalization Act during the Clinton era that started all of this? Someone please clarify if you know for sure.

Wait a minute.

So people who CAN make their payments and ARE NOT in jeopardy of foreclosure are doing short sales based on lose of equity? And because they want to move?

Just because you want to move or have loss of equity shouldn't make you a candidate for a short sale. A short sale (in my belief) is for individuals that CAN'T make the payments and is in serious jeopardy of foreclosure. 

If you can make your payments how are you considered in hardship? In the short sales I have done the clients have to prove to the lender that they can't make or have a hard time making payments with bank statements, check stubs, and expense reports. If you can afford the home than you aren't a candidate for a short sale now so why should they be a candidate in the future?

Being given a loan that shouldn't have been given in the first place (interest only with balloon payments or adjustable rate), losing a job, and losing household income due to divorce, etc is hardship.

And, honestly now, who would have been screaming about government interferance in the private sector had the government tried to stop wall street from providing liquidity for exotic and overly aggressive loan products?  In all fairness both government and the private sector failed.  So did a lot of us in various ways.  Myself included.

Going forward, this is a great concept for making this housing crisis a thing of the past more quickly.  My concern is that it is a great concept with terrible timing.  I fear that dumping these properties on the market with rising interest rates and no tax credits might be a recipe for a double dip in home values.

"One of the goals of the new HAFA program is to simplify and streamline the use of the short sale option by incorporating the following unique features:

1. Uses borrower financial and hardship information already collected in connection with consideration of loan modification."

"If these individuals are declined for HAMP due to an unproven hardship will they also be declined for the HAFA short sale process?  I assume so based on the outlined criteria."

Diane - Just because they use the "already collected" financial and hardship information - that was used for the loan mod - to determine eligibility for the short sale does not mean that the criterion is the same.  They can apply one set of mathematics to a set of numbers for a loan mod and a different formula to the same set of numbers in order to calculate short sale eligibility.

Most loan mods are determined based on 31% of income.  To be eligible for a short sale, one needs to prove they are a serious financial risk. 

Further, just because a loan mod option is entertained does not mean a borrower has to accept it.  They can decline and go on to short sale if their goal is not to keep the house, rather to sell it.

As with all bills, we will see how well it translates into real help. Your above illustration does not seem to be a violation of Fair Housing Laws, but are definitely unfair to responsible home owners. It is like clearing your debt in a bankruptcy...you want quick relief for a self inflicted problem and you pay the price for it. The people going through short sale need help and a hand up if we are to correct our economy.

Diane, While I understand your point I see absolutely no connection to Fair Housing Laws. fair Housing Laws are serious stuff based on...."race, color, national origin, religion, sex, familial status or handicap"

Having no equity due to declining property values is nothing more than an economic condition. I see HAFA as a step in the right direction. It's not perfect but I do see it helping many.

I agree with this statement, I really think they are trying to make a move in the right direction...

I'm just glad they are trying to solve the problem. . .there will never be the perfect plan.