There are some new HAFA guidelines that will benefit more people. Along with the current benefits, $3,000 relocation allowance and if the lenders/investors are participating in the HAFA program the full release of any future liability.
Unfortunately these guidelines do not apply to loans backed by Fannie Mae, Freddie Mac, FHA or VA. These loans are still eligible for the HAFA program just not these new guidelines.
•· Servicers are no longer required to verify a borrower's financial information. The servicer may require undated financial documents but they are not required to do so as a condition of the HAFA program.
•· Servicers are no longer required to determine if the sellers total monthly mortgage payment exceeds 31% of their gross monthly income as a condition to do a short sale. The total monthly mortgage payment includes the monthly payment of principal, interest, property taxes, hazard insurance, flood insurance, condominium association fees and homeowner's association fees, as applicable including any escrow payment shortage amounts subject to a repayment plan.
•· The property can be vacant but not more than 12 months. It can also be a rental property but not more than 12 months prior to the date of the short sale agreement.
•· The seller's reason for relocation does not have to be related to re-employment or transfer of employment. There also is no longer a minimum distance requirement. The only restriction is the seller must not have purchased a one to four unit property 12 months prior to the date of the short sale agreement.
•· Servicers may re-evaluate sellers previously determined to be ineligible for HAFA.
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