HAFA Updates – Effective February 1, 2013

Program Updates Effective February 1, 2013

however, Servicers may implement changes immediately

 

 The Home Affordable Foreclosure Alternatives (HAFA) Program is a government-sponsored initiative overseen by the U.S. Treasury Department and administered by Fannie Mae assisting all Home Affordable Modification Program (HAMP)-eligible homeowners in avoiding foreclosure,specifically through short sales or deeds-in-lieu of foreclosure.

 

 

BEFORE Feb. 1, 2013

AFTER Feb. 1, 2013

 

Required Documents Use of Short Sale Agreement and Request for Short Sale Approval or forms substantially similar in content are required   Use of Short Sale Agreement and Request for Short Sale Approval documents optional
The Short Sale Notice (SSN) and the Acknowledgement of Request for Short Sale (ARSS) are now the preferred forms for servicers with regards to HAFA Short Sales. The Deed-in-Lieu (DIL) Agreement is now optional, and the Request for Approval of Short Sale (RASS) and Alternative Request for Approval of Short Sale (Alt RASS) are being phased out. 
Response Time Servicers required to respond within 45 days  Servicers required to respond within 30 days
The time frame for servicers to respond to a borrower’s request for a short sale has been shortened from 45 calendar days to 30 calendar days (generally). 
Pre-Determined Hardship & Affidavit Affidavit of borrower hardship required for approval of  HAFA short sale Pre-determined hardship (90+ days delinquent and FICO below 620) with affidavit required 
Borrowers who are 90 days or more delinquent and have a FICO score that is less than 620 will be deemed to have a “pre-determined” hardship. Servicers do not need to further validate the hardship to approve the HAFA short sale. However, they must execute a Hardship Affidavit prior to closing. 
Short Sale Affidavit

No arms-length transaction or HUD-1 affidavit required

 

New HAFA Affidavit to be completed at closing

A new HAFA Affidavit is now required, while both the borrower and the buyer must sign. This affidavit certifies the sale is an arm’s-length transaction (the homeownerand buyer have no previous connection to one another), that no money is beinggiven or received outside of the HUD 1, and other necessary information. 
Subordinate LienholderPayoff  Treasury contribution to subordinate lienpayoff $2,000  Treasury contribution to subordinate lienpayoff increased—up to $5,000 
The Department of the Treasury will now provide up to $5,000 as an incentive to payoff secondary lienholders. 

Resale Restrictions

 

No resale before 90 days

Resale after 30 days allowed

 

The current restriction on reselling a property within 90 days after closing is being shortened to 30 days. From 31 to 90 days, the resale price cannot exceed 120% ofthe HAFA short sale price. 

 

If you have HAFA or Real Estate related questions for Sonora, Copperopolis or Tuolumne County I can be reached at 209-536-3000 or robin@pcr1.com

Source: United States Treasury Department via CDPE/Charfen Institute

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