Section Three - Consideration

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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.



Comments (4)

John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

Hi Dawn,

Thank you for an excellent and helpful article.

John Pusa

Dec 02, 2009 04:36 PM
Dawn Uselding
A New Dawn Real Estate Services, LLC - Manitowoc, WI
Short Sale Assistant


Dec 02, 2009 04:39 PM
Melanie Ross
Coldwell Banker Solano Pacific - Benicia, CA
Benicia CA & Vallejo CA Real Estate, 707-319-2828


Thank you so much for the info.  I am reading each blog.  I get what you are saying, but what is the simplest way to find out if the bank we are dealing with is under the HAMP program.  Many of the negotiators know nothing, I said earlier this year when negotiating "why not do this you will get money from the govt?" the negotiator did not say anything.  I would like to be armed with who is under this program to be able to push back with facts to them.

Dec 03, 2009 12:03 PM
Dawn Uselding
A New Dawn Real Estate Services, LLC - Manitowoc, WI
Short Sale Assistant

Melanie  - here you go.  Go to this link and type in the name of your servicer.

Making Home Affordable -Contact Your Mortgage Servicer

Dec 03, 2009 12:57 PM