What is The Difference Between a Bank of America HAFA and Co-operative Short Sale?

Bank of America has made great strides recently in processing short sales.  For many agents they have gone from being the least favorite to the most favorite bank to work with.  They have managed to do this in part by switching to an online documentation system for short sales, called Equator, but I also think it is a corporate decision to work out an orderly way to deal with defaulting homeowners.

B of A has recently instituted a new program called the Co-operative Short sale Program.  The gist of this program is to approve a short sale before the home is listed.  The bank reviews the homeowners financial to see if they qualify for a short sale, then lets them know what price they are willing to accept.  It is similar to the government HAFA short sale program but is primarily for homeowners who do not qualify for HAFA, or for loans where the investor in the loan does not want to accept the HAFA terms.  Here is a summary of some of the differences in the two programs:

Qualifications: 

HAFA:  Home must be owner occupied, or lived in by owner not more than 12 months previously.

          Loan must have originated before 2009

          The loan amount must be below $729,750

Co-operative:  Qualifications determined on an individual loan basis by the investor of that loan.

 

Timing:

HAFA: Can be initiated before or after the property has an offer

Co-operative:  Initiated before there is an offer

 

Price Approval:

Both will pre-approve a price they are willing to accept

 

Other Lien Holders:

HAFA: Maximum of $6,000

Co-operative: Decided on a case by case basis

 

Seller Contribution:

HAFA: None

Co-operative:  Case by case basis

 

Deficiency: 

HAFA: None

Co-operative: Determined by state law and the individual investor. 

 

Relocation assistance

HAFA: $3000

Co-operative:  Up to $2500

 

Foreclosure Hold

Both wil do an automatic foreclosure hold once a short sale agreement is signed

 

Both of these programs offer a better alternative to the homeowner than a traditional short sale.  Bank of America will look at every short sale request to see if they homeowner qualifies for HAFA unless the homeowner specifically requests not to be reviewed by HAFA?  So why would you not want to be reviewed for HAFA?  

Up to now, the HAFA pre-approval process has been very slow and not many loans have actually been approved for HAFA by the investors.  They do not seem to like the restrictions on seller's contributions and the second lien holders often want more money.

However, if you have the time to see if you qualify and get investor approval it is a great first choice. If not, the co-opertative short sale program is a good second choice.  There is a real benefit for selling if the buyer knows the price has been approved as well as the seller.

 

If you have nay questions about short sale buying or selling please feel free to contact me!

 

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

D.R.E.  01191194

 

Federal Government Disclaimer (MARS): 1. You may stop doing business with us at any time. You may accept or reject the offer of mortgage assistance we obtain from your lender [or servicer]. If you reject the offer, you do not have to pay us. If you accept the offer, you will have to pay us commission as agreed to in listing contract for our services.
2. Marcy Moyer of Keller Williams Realty is not associated with the government, and our service is not approved by the government or your lender; and 
3. Even if you accept this offer and use our service, your lender may not agree to change your loan.

 

 

Marcy Moyer Keller Williams Realty Palo Alto, Ca. Specialist in Trust and Probate Sales