While the norm is 4-6 months for a short sale approval, the government is trying to combat the wait by rolling out the HAFA (Home Affordable Foreclosure Avoidance) Short Sale under their HAMP (Home Affordable Modificiation Program) program.

This program is optional for the investors. However, as of August 2010 2 of the biggest investors (Fannie Mae and Freddie Mac) have joined the program.  You may contact them directly to see if you have one of their loans:

Fannie Mae

• 1-800-7FANNIE (8am to 8pm EST)
• www.fanniemae.com/loanlookup

Freddie Mac

• 1-800-FREDDIE (8am to 8pm EST)
• www.freddiemac.com/mymortgage

Benefits of a HAFA Short Sale:

• Approval is to be issued in 10 days. (In real life we’ve seen this vary and have seen the approval in 14-21 days, however it’s way better than 5 months)
• Lender/Servicer cannot foreclose during the HAFA process.
• You will not be asked to sign a promissory note to pay back the balance of the shorted funds.
• You may be eligible to receive up to $3000 relocation assistance upon a successful closing.

To initiate the process, the seller must:

• CALL YOUR LOAN SERVICER/MORTGAGE COMPANY & Apply for a HAMP modification – A Chandler AZ borrower must first be evaluated for a HAMP modification before any HAFA options are available. IF you qualify for a loan modification, you may modify your loan. More than likely if you’re behind on your mortgage and you have no way to repay those behind payments you will be denied the loan modification. IF they don’t do the intake over the phone or send you the proper forms to fill out, you can fill out this form and fax it to them: http://makinghomeaffordable.gov/docs/RMA%20Interactive%20-%20Updated%2011.10.09.pdf
• If you don’t want the modification after qualifying, simply deny or opt out of the modification and you will be evaluated for HAFA as the next step under the HAMP program.
• Servicers must consider possible HAMP eligible borrowers for HAFA within 30 calendar days of the date the borrower: 1. Doesn’t Qualify     OR        2. Opts out of and Requests a Short Sale
• You will be required to submit the following documents:
  • Complete the Tax Authorization (IRS 4506T-EZ Form)
  • Gather Proof of Income
  • To find your servicer’s fax/mailing address go here: http://makinghomeaffordable.gov/contact_servicer.html

Seller must be aware of the following terms for the HAFA Short Sale:

• The Chandler property is the borrower’s principal residence
• The mortgage loan is a first lien mortgage originated on or before January 1, 2009;
• The mortgage is delinquent or default is reasonably foreseeable;
• The current unpaid principal balance is equal to or less than $729,750; and
• The borrower’s total monthly mortgage payment (as defined in Supplemental Directive 09-01) exceeds 31 percent of the borrower’s gross income
• All HAMP servicers are required to implement HAFA.
• Seller must list their house for sale with a licensed Realtor.
• Seller must live in and maintain the property during the process. (Job transfers may be allowed) Ask your HAFA Realtor for Details.
• Seller must maintain the property in acceptable condition.
• If you have a second mortgage they must agree to release their lean for 3% of the approved price or $6000, whichever is less.
• IF your loan is FANNIE MAE, you will not qualify for HAFA if your Foreclosure Auction date is less than 60 days away. Call your HAFA Realtor as soon as you miss your 1st payment.
• IF your loan is FREDDIE MAC you must be late on your payments NOT going to be late as foreseeable as stated above.

If you are considering a HAFA Short Sale, feel free to contact one of our Short Sale Experts for a free consultation: Amy Gerrish – 866-602-4601 ext. 0 or Marie Phelps 866-602-4601 ext 102. We cover Phoenix to San Tan Valley, Gilbert to Scottsdale to Chandler Arizona (AZ).