Short sale changes in the news; HARP extended to 12/31/15 and B of A revises their requirements

There has been a lot of events happening in the world of short sales just recently. The Federal Housing Finance Agency (FHFA) recently directed Fannie Mae and Freddie Mac to extend the Home Affordable Refinance Program (HARP) by two years to Dec. 31, 2015. The program was set to expire Dec. 31, 2013. HARP is federal government program uniquely designed to allow borrowers who are underwater to refinance their mortgage. 

And from an article in this week's issue of Newsline, a weekly email newsletter by the CALIFORNIA ASSOCIATION OF REALTORS® :

Short Sale Soundoff: Bank of America revises short sale requirements

Bank of America recently issued a new Short Sale Agent Update that revises certain short sale requirements for short sales involving non-government-sponsored enterprise loans in which the homeowner is eligible for HAFA.

Key enhancements include:

• The Short Sale Agreement is being converted to a Short Sale Notice which will no longer require the borrower to sign and return the agreement.
• The Request for Approval of Short Sale and Alternative Request for Approval of Short Sale are being eliminated. The Acknowledgement of Request for Short Sale is being introduced in place of the Request for Approval of Short Sale, but will no longer require borrower’s signature and return.
• The time frame for servicers to make a decision on a borrower’s request for HAFA has generally been shortened to 30 calendar days of receiving all documents and external approvals required.
• Treasury will now require both the seller and purchaser in a HAFA short sale transaction to sign a new HAFA Affidavit document prior to closing. This certifies that the sale represents an arms-length transaction and that no money is being given or received that is not reflected on the HUD-1 Settlement Statement.

The prohibition against resale of a property for 90 calendar days following a HAFA short sale closing is being updated to prohibit any resale within 30 calendar days and prohibit a resale for more than 120 percent of the HAFA short sale price between 31 and 90 calendar days of the HAFA short sale closing.

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