Section Three - HAFA Considerations
This section outlines what a servicer must do to participate in the HAFA program. First they need to have developed a written policy (consistent with Investor guidelines) that describes the basis on which the servicer will offer the HAFA program to borrowers. The servicer can incorporate many factors in this policy, such as local market conditions, timing of pending foreclosures, the severity of the loss involved and even the borrowers motivation and cooperation. Remember they already have entered into an agreement with Fannie Mae to participate in the HAMP program. These policies must be submitted and approved by Fannie Mae. So even though they are writing their own policies, at least each borrower with that servicer will be subject to the same policy. So all short sales under a specific servicer should be treated similarly.
The borrower MUST be evaluated for HAMP before being considered for HAFA. If you qualify for a modification under HAMP you will usually be offered a Trial Period Plan (TPP). The TTP option provides a trial period for the borrower to demonstrate the ability to make payments under the modified terms prior to the effective date of the modification. If the borrower does not complete or defaults on the TTP, the servicer is supposed to assess the other retention or modification programs available. A borrower can refuse a HAMP modification.
You qualify for HAMP if all the following criteria are met:
•· the property is your principle residence
•· mortgage is a 1st non-GSE mortgage originated on or before January 1 2009
•· the mortgage is delinquent or default is reasonably foreseeable You don't have to be delinquent - you need a hardship and reasonable proof of difficulty continuing with payments
•· Current unpaid principal balance $729,750 or less This is for single family property, higher balance allowed for multifamily (2-4 unit)
•· The mortgage payment exceeds 31% of the borrowers gross income
Servicers must consider a borrower for HAFA before referring for foreclosure or allow a pending foreclosure sale to be conducted. Also they must be considered for HAFA in 30 calendar days of the date the borrower: Keep good records!!
•· Doesn't qualify for a modification TPP
•· Doesn't complete a TTP
•· Is delinquent on HAMP modification by missing at least 2 consecutive payments
•· Requests a SS or DIL Repeat - the borrower does not have to accept a HAMP modification
Remember - the borrower must be considered for the HAFA within 30 calendar days and the date and outcome of the HAFA consideration MUST be documented in the servicer's file. This gives us leverage to get the SS moved on in a timely manner.