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Supplemental Directive 11-02

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Education & Training

On March 30th, the Treasury Department issued a new supplemental directive regarding the MHA program.  There were a number of things that were "cleaned up" but in terms of HAFA specifically, there are three important changes.

Supplemental Directive 10-18 changed the rules regarding a homeowner vacating their property prior to the close of escrow.  There was a requirement that the borrower stay in the home unless there was a need for the homeowner to move for employment reasons which needed to be over 100 miles away.  The new Directive 11-02 did a little clean up in this area since there really wasn't clarity of how the homeowner would have to prove the home was their primary residence.  Now, there is a specific requirement for third party veritifcation rather than just relying on the buyer's affidavit.

A second piece, and one any of us doing short sales will appreciate, is the requirement that the servicer acknowledge receipt of a request for HAFA in writing.  This has been a huge problem for the real estate community...not knowing where things stood has been a huge thorn in our side.

A third change and one that ties somewhat to the second one is the requirement that the servicer respond to the borrower in a specific timeframe and if they do not, they are required to notify the borrower in writing why not. The original time frame for response has been extended to 45 days, but if that date is missed, the servicer must inform the borrower what the status is every 15 days until a response is given either through issuance of the SSA or DIL or a response to the Alternative RASS. 

The changes are mandated to be implemented by June 1st, but as before, servicers are encouraged to start sooner. 

We should all be familiar with the www.hmpAdmin.com website and the Handbook for Servicers so we have the knowledge, and therefore the power to help our consumers through this process.  As of the end of February, there were nearly 4500 successful HAFA short sales and deeds-in-lieu.  We all know it isn't enough, but it is a start.