Hafa Forms

Short Sales: New Rules, New Guidelines.

Recently Harris Real Estate University and the National Association of Realtors provided a intense 60 minute HAFA educational teleconference. Listen to the replay NOW.

What Agents Need To Know Now To Survive and Thrive The Greatest Shift In The History Of The Real Estate Industry.

This is your…everything you need to know about HAFA resource. You are about to learn exactly what you need to do now…

Use this information, links, downloads on this resource page to educate yourself and your potential Short Sale Sellers about HAFA (Short Sales).

Important: Agents, the entire real estate industry, ALL the major brokers, the National Association of Realtors, the President of the United States…and most importantly….all the homeowners in your community who are suffering….want you to know this information so that you can help them to avoid foreclosure. Recently history has shown that most upside down homeowners can’t or won’t qualify for a mortgage loan modification. The next natural (and smart) step is a Short Sale or Deed In Lieu. Its not too late for you to become your areas ASD Short Sale Specialist.

Introduction: HAFA: The streamlined, fast close, full commission short sale. (well, almost)

Section 1: NAR’s HAFA Short Sale Information.

Section 2: Making Homes Affordable Information, Participating Lenders.

Section 3: HAFA F.A.Q.s

Section 4: Agents Action Plan.

Introduction:

We will now decode for you all the important HAFA program details so that you can focus on helping homeowners.

As we have been proclaiming for nearly 4 years…the only true help for homeowners will come from caring, competent and skilled agents. Agents who have taken the time to adapt to the new mindset of being of service and have taken the time to learn the new skill set that this market requires.

Harris Real Estate University is working closely with the NAR to make HAFA a success. We would like to again acknowledge the NAR’s Jeff Lischer for his extensive efforts in front of and behind the scenes in Washington.

Many agents are confused about the Treasury Departments Making Homes Affordable Program, HAMP program and their new HAFA Short Sale Program. Here is the bottom line, HAFA provides the structural framework for Short Sales and Deeds in Lieu. The goal of this program will be to motivate both lenders and borrowers to avoid foreclosure.

Agents, for the foreseeable future Short Sales (and REOs) will dominate the real estate industry.

Please understand, this market…the market where millions of homeowners are upside down…where bank owned homes (REO’s) are everywhere….is the new normal.

On the surface many aspects of this new market may seem daunting if not a little intimidating.

Many agents have been avoiding learning how to list and sell short sales. Perhaps they have been hoping and praying that the need for these skills would not be required….maybe the clouds would clear and the market would return to ‘normal’. What agents must accept is the bubble that lasted nearly 8 years was abnormal. The market we are in now and will be for at least 3-5 years IS the new normal

Accepting that this is the new normal opens you and your business up to many extraordinary opportunities.

One of the best opportunities is being a Harris Real Estate University ASD (Accredited Shortsale Designation) agent. Homeowners are looking for agents who have advanced education to help them sell their home via a short sale. Be that agent. Watch the FREE ASD Agent Short Sale Secret video and download the FREE Short Sale Book.

HREU has been advocating for years the streamlined Short Sale. HAFA is the first major step to make a streamlined, fast close, full commission Short Sale a reality.

Important Note About HAFA: Expect the HAFA program details, rules, guidelines to be updated frequently. We will keep you ahead of the curve and provide you real time short sale coaching. Its our belief that HAFA is the single biggest step taken since the impolsion of the housing market to help homeowners. This new program will help homeowners who are unable to retain their home under the Home Affordable Modification Program (HAMP), provides incentives in connection with short sales and deeds-in-lieu of foreclosure.

We know for a fact that the lenders servicer’s are now contacting the borrowers they have deemed to be most likely to be headed for default. On other words, lenders are proactively promoting to their borrowers doing a Short Sale (or DIL). Banks are not only initiating the Short Sale process but, they are also literally pre-approving the home as a short sale. BEFORE you list the home, the banks will have collected the Short Sale paperwork, priced the home and educated the borrower on the Short Sale process. Next, the banks will be sending those pre-approved listing leads to agents. Obviously, the lenders will be selective whom they refer these listings to. Become the preferred Short Sale agent in your area. Learn more about the ASD Program now. Watch the FREE HREU ASD Short Sale Video and Download the FREE Short Sale book.

Section 1: NAR’s HAFA Short Sale Information

Realtor.org HAFA/ Short Sale Brochure Part 1

Realtor.org HAFA/ Short Sale Brochure Part 2

Great Video from the National Association Of Realtor’s Short Sale/ HAFA Expert Jeff Lischer.

Section 2: Treasury Departments Making Homes Affordable Program.

About Making Home Affordable Program Website

Making Homes Affordable Video: Your Graceful Exit. Agents, share this video with all of your potential Short Sale clients. Remember, this video was created by the U.S. Treasury Department. If you are looking for validation that its time for you to learn the new ways to list and sell short sales….thus, helping a homeowner avoid a foreclosure…this is it!

Making Homes Affordable continued….

In February 2009, the Obama Administration introduced a comprehensive Financial Stability Plan to address the key problems at the heart of the current crisis to get our economy back on track. A critical piece of that effort is Making Home Affordable, a plan to stabilize the housing market and help struggling homeowners get relief and avoid foreclosure.

The Home Affordable Modification Program provides eligible homeowners the opportunity to modify their mortgages to make them more affordable. Over one million homeowners have already gotten help under the program. The program is on track to help 3 to 4 million homeowners by 2012.

On March 26, the Obama Administration announced expanded flexibility for mortgage servicers to assist more unemployed homeowners and homeowners who are underwater through the program.

The Second Lien Modification Program (2MP) offers homeowners a way to modify their second mortgages to make them more affordable when their first mortgage is modified under the Home Affordable Modification Program.

The Home Affordable Refinance Program gives homeowners with loans owned or guaranteed by Fannie Mae or Freddie Mac an opportunity to refinance into more affordable monthly payments.

The Home Affordable Foreclosure Alternatives Program provides opportunities for homeowners who can no longer afford to stay in their home but want to avoid foreclosure to transition to more affordable housing through a short sale or deed-in-lieu of foreclosure.

Our homeowner website, www.MakingHomeAffordable.gov, provides detailed information and resources about these programs. Through this website, homeowners can also connect with free HUD-approved counseling organizations, locate free events in their area, find the application documents necessary to apply for the Making Home Affordable Program, as well as find answers to frequently asked questions, and much more.

We hope that you will find this website informative and useful as we all work together to solve our nation’s housing crisis and put our country on the path to a lasting economic recovery.

Here is the list……lenders participating in HAFA:

Allstate Mortgage Loans & Investments, Inc.
American Home Mortage Servicing, Inc.
Watch the FREE ASD Agent Short Sale Secrets video and grab your Short Sale training book now. Everything you think you know about Short Sales has changed!

AMS Servicing, LLC
Aurora Loan Services LLC
Bank of America, N.A.
Bank United
Bay Federal Credit Union
Bayview Loan Servicing, LLC
CCO Mortgage
Carrington Mortgage Services, LLC
Central Florida Educators Federal Credit Union
Central Jersey Federal Credit Union

Listen to the FREE National Association of Realtors and Harris Real Estate University HAFA Short Sale Guidelines Replay NOW
CitiMortgage, Inc.
Citizens First Wholesale Mortgage Co.
Countrywide Home Loans Servicing LP
CUC Mortgage Corporation
DuPage Credit Union
EMC Mortgage Corporation
Farmers State Bank
First Bank
First Federal Savings and Loan Association of Port Angeles
First Keystone Bank
Franklin Credit Management Corporation
Glass City Federal Credit Union
GMAC Mortgage LLC
Great Lakes Credit Union
Green Tree Servicing LLC
Harleysville National Bank & Trust Company
Hillsdale County National Bank
HomEq Servicing
Home Financing Center Inc.
Home Loan Services, Inc.
Horicon Bank
IBM Southeast Employees Federal Credit Union
IC Federal Credit Union
J.P. Morgan Chase Bank, NA
Lake City Bank
Lake National Bank
Litton Loan Servicing
Los Alamos National Bank
Marix Servicing, LLC
Members Mortgage Company, Inc
Mission Federal Credit Union
Members Mortgage Company, Inc.
Metropolitan National Bank
MorEquity, Inc.
Mortgage Center, LLC
Mortgage Clearing Corporation
National City Bank
Nationstar Mortgage LLC
Oakland Municipal Credit Union

Listen to the FREE National Association of Realtors and Harris Real Estate University HAFA Short Sale Guidelines Replay NOW
Ocwen Financial Corporation, Inc.
OneWest Bank
ORNL Federal Credit Union
PennyMac Loan Services, LLC
PNC Bank, National Association
Purdue Employees Federal Credit Union
Qlending, Inc.
Quantum Servicing Corporation
RG Mortgage Corporation
Residential Credit Solutions
RoundPoint Mortgage Servicing Corporation
Saxon Mortgage Services
Schools Financial Credit Union
SEFCU
Select Portfolio Servicing
Servis One Inc.,dba BSI Financial Services, Inc
ShoreBank
Stanford Federal Credit Union
Technology Credit Union
United Bank Mortgage Corporation

Watch the FREE ASD Agent Short Sale Secrets video and grab your Short Sale training book now. Everything you think you know about Short Sales has changed!
U.S. Bank National Association
Vantium Capital, Inc.
Wachovia Mortgage, FSB
Wachovia Bank, NA
Wells Fargo Bank, NA
Wescom Central Credit Union
Wilshire Credit Corporation
Yadkin Valley Bank

Section 3: HAFA and HAFA F.A.Q.’s:

Complements HAMP by providing a viable alternative for borrowers (the current homeowners) who are HAMP eligible but nevertheless unable to keep their home.
Uses borrower financial and hardship information already collected under HAMP.
Allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).
Prohibits the servicers from requiring a reduction in the real estate commission agreed upon in the listing agreement (up to 6%).
Requires borrowers to be fully released from future liability for the first mortgage debt and, if the subordinate lien holder receives an incentive under HAFA, that debt as well (no cash contribution, promissory note, or deficiency judgment is allowed).
Uses a standard process, uniform documents, and timeframes/deadlines.
Provides financial incentives: $3,000 for borrower relocation assistance; significant financial incentives for servicers to cover administrative and processing costs.
Requires all servicers participating in HAMP to implement HAFA in accordance with their own written policy, consistent with investor guidelines. The policy may include factors such as the severity of the potential loss, local markets, timing of pending foreclosure actions, and borrower motivation and cooperation.
Does not take effect until April 5, 2010, but servicers may implement it before then if they meet certain requirements. The program sunsets on December 31, 2012.

TIMELINE

Notification If a servicer has not already discussed a short sale or DIL with the borrower, it must notify the borrower in writing of these options and give the borrower 14 calendar days to respond, orally or in writing. If the borrower does not respond, that ends the servicers duty to give a HAFA offer.

Servicers must consider HAMP-eligible borrowers for HAFA within 30 days after the borrower does at least one of the following:

Does not qualify for a HAMP trial period plan
Does not successfully complete a HAMP trial period plan
Is delinquent on a HAMP modification (misses at least 2 consecutive payments)
Requests a short sale or DIL

Short Sale Agreement

The borrower has 14 calendar days from the date of the Short Sale Agreement (SSA) to sign and return it to the servicer. The SSA must give the borrower an initial period of 120 days to sell the house (extensions permitted up to a total of 12 months).

Purchase Offer

Within 3 business days of receiving an executed purchase offer, the borrower (or agent) must submit a completed Request for Approval of Short Sale (RASS) to the servicer, including

* a copy of the sale contract and all addenda

* buyer documentation of funds or pre-approval/commitment letter from a lender

* all information on the status of subordinate liens and/or negotiations with subordinate lien holders.

Within 10 business days after the servicer receives the RASS and all required attachments, the servicer must approve or deny the request and advise the borrower.

Closing

The servicer may require the closing to take place within a reasonable period after it approves the RASS, but not sooner than 45 days from the date of the sales contract unless the borrower agrees.

The servicer must release its first mortgage lien within 10 business days (or earlier if required by state or local law) after receipt of sales proceed from a short sale or delivery of the deed in the case of a DIL. Investor must waive rights to seek deficiency judgments and may not require a promissory note for any deficiency.

FAQs

HAFA is a complex program with 43 pages of guidelines and forms. To help you better understand the process, NAR has prepared some frequently asked questions that address the basics.

Who is eligible for HAFA?

The borrower must meet the basic eligibility criteria for HAMP:

Principal residence
First lien originated before 2009
Mortgage delinquent or default is reasonably foreseeable
Unpaid principal balance no more than $729,750 (higher limits for two- to four-unit dwellings)
Borrowers total monthly payment exceeds 31% of gross income

How is the program being implemented?

Supplemental Directive 09-09 (November 30, 2009) gives servicers guidance for carrying out the program. A short sale agreement (SSA) will be sent by the servicer to the borrower after determining the borrower is interested in a short sale and the property qualifies. It informs the borrower how the program works and the conditions that apply.

After the borrower contracts to sell the property, the borrower submits a “request for approval of short sale” (RASS) to the servicer within 3 business days for approval. If the borrower already has an executed sales contract and asks the servicer to approve it before an SSA is executed, the Alternative RASS is used instead. The servicer must still consider the borrower for a loan modification.

What are the steps for evaluating a loan to see if it is a candidate for HAFA?

1. Borrower solicitation and response

2. Assess expected recovery through foreclosure and disposition compared to a HAFA short sale or deed in lieu of foreclosure (DIL)

3. Use of borrower financial information from HAMP

4. Property valuation

5. Review of title

6. Borrower notice if short sale or DIL not available (to borrowers that have expressed interest in HAFA).

What are the HAFA rules regarding real estate commissions?

The guidance states that a servicer may not require a reduction in the real estate commission below the amount stated in the SSA, up to 6%.

What else should I know?

The deal must be “arms length.” Borrowers cant list the property or sell it to a relative or anyone else with whom they have a close personal or business relationship.
The amount of debt forgiven might be treated as income for tax purposes. Under a law expiring at the end of 2012, however, forgiven debt will not be taxed if the amount does not exceed the debt that was used for acquisition, construction, or rehabilitation of a principal residence. Check with a tax advisor.
The servicer will report to the credit reporting agencies that the mortgage was settled for less than full payment, which may hurt credit scores.
Buyers may not reconvey the property for 90 days. HAFA Short Sale Program has been in effect since April 5, 2010.

Section 4: Agents Action Plan.

* Obtain your Short Sale designation. Here is the info you need to get started on the ASD for only $97. We will give you all the tools, scripts, presentations, press releases, marketing ideas you need now.

* Contact ALL of your past clients, friends and family members and ask them if they our anyone they know is considering defaulting.

* Contact other agents who have upside down owners but, don’t know how to do short sales…short sale listing referrals!

* Make the decision to become your areas Short Sale Specialist. Start by building a huge Short Sale listing inventory. In nearly every market upside down owners are everywhere. Make a commitment to list 10..20…50…100 Short Sales over the next 90 days.

* If you are still skeptical about Short Sales..watch our FREE Short Sale video. When you do we will invite you to the upcoming HAFA Short Sale Secrets tele-conference.

Need a little more motivation to become a Short Sale Specialist? Watch these videos: