DebraDAW HAFA Short Sale Updates

Short Sale (vs) Foreclosure

2011-09-07T05:17:00.000-07:00

Short sale process overview : Stuff you should know feel free to share this with your friends I am sure I can help!

With the institution of the Debt Relief Act of 2007 and the government assistance currently available to
America’s homeowners deciding to short selling a home is like getting a “Get out of Jail Free Card.

Attempting to escaping debtors prison can keep you in jail 7-10 years even if you attempt to escape by walking away. By short selling your home you minimize your damages and can be fully recovered in 2 years. Not only do you get out of jail early, in most cases you get out of jail virtually FREE!

Short Selling real estate in most case; allows the homeowner an immediate stay on all foreclosure proceedings. Most sales can be stopped in a few days (*up to 5 days before a trustee sale day). Once listed your loan moves to a different department, your file is assigned to a negotiator who only deals with your agent (me) thus stopping all the harassing phone calls and threatening letters.

In most cases the homeowner is not required to make any more payments on their mortgage allowing them to save, save, save, and begin their recovery process right away. Short selling allows the homeowner to save money and plan their relocation in their own timeframe.

No they won’t let you (seller) collect $200 (sorry)… they will however pay most if not all of the escrow cost, title fees and agent commissions involved in completing the sale.

They will even go as far as to pay some if not all of the buyer Fees allowing them to collect $$$ to help you out of this situation.

The Banks are paying me to find you and to help you… but I work for YOU!

Foreclosure is the process a bank must go through in order to reclaim a home from a delinquent borrower. Your lender cannot remove you from your home until they complete the entire process. The process can be extended indefinitely but entitles you to the following minimum days to stay in your home under each phase of the process.

Note: If foreclosed upon the owner is facing 7-10 years of negative credit reporting before purchasing again.

1^st) Notice of Default or NOD is the first phase of the foreclosure process generally 3 ½ months. The lender must make a public declaration of their intent to foreclose on the property if the terms are not met. If the owner decides to sell with little or no equity, lenders are sometimes willing to accept less than the full amount due, commonly referred to a “short pay” or “short sale.” Which when reported shows up on the owners credit report as “sold for less than value” which requires 18-24 months before owner will be able to buy again.

2^nd Trustee sale. The owner still has an additional 30 days to bring their loan current prior to the auction date. This process does not start until you have been given conditional notice of the sale date. If you have not obtained a trustee sale date your property is still considered an NOD. Once sold at auction the property than becomes an REO (Real Estate Own)

These time frames are your legal right. You owe it to yourself to have a knowledgeable professional like myself fighting on your behalf to insure your success. Your bank has agreed to pay my fees all you have to do is simply reply to this blog posting by emailing me at, DebraDAW@aol.com and let me know who you know that might need my assistance and I will get started helping them recover TODAY!

2011-09-01T13:36:00.001-07:00

Announcing the New Federal Gov HAFA Short Sale Program.
The US Treasury Department has released the guidelines for the new federal Home Affordable Foreclosure Alternatives program (HAFA). The HAFA program is designed to streamline the short sale process and offers financial incentives to both homeowners and mortgage banks to encourage this type of resolution versus foreclosure.
The purpose of the HAFA program is to help reduce the rate of foreclosures, for short sales have been shown to reduce the financial loss to the banks. And, short sale properties are rarely left vacant and neglected, thus reducing the chance of vandalism and deterioration that often becomes foreclosure properties. Some of the key features and benefits of HAFA for Orange County and SoCal homeowners:
1- Pre-determined cash incentives to both the Homeowners and Mortgage Bank servicer.
2- Listing Agent and Homeowner to receive pre-approved short sale pricing guidelines and terms prior to listing the property for sale.
3- Mortgage Banks are required to release the Homeowner from current and future mortgage debt liability.
4- The Short Sale must be an “Arms Length” transaction, meaning no relative can be a buyer, nor can an investor buyer offer to sell the home back to original homeowner.
5- The US Treasury department is to share the cost of paying off the 2nd Mortgage holder to release claims, by matching $1 for every $2 paid by the 1st Mortgage Bank.
6- Mortgage Banks cannot seek a deficiency judgment or require homeowner to sign a promissory note for any unpaid balance.
7- Mortgage Banks are required to pay for all fees and costs, that are normally a cost of the Seller in a standard real estate sale.
8- Mortgage Banks are required to render a preliminary decision to short sale within 15 days after receiving a fully completed document package from the Homeowner.

New HAFA Guidelines

2011-08-26T17:21:00.000-07:00

HAFA PROGRAM
U.S. Treasury Department Home Affordable Foreclosure Alternatives Program
On November 30, 2009, in Supplemental Directive 09-09, the US Treasury Department created the HAFA Program (Home Affordable Foreclosure Alternatives Program) to establish short sale and deed-in-lieu of foreclosure (DIL) policies, procedures and forms to provide alternatives other than foreclosure for borrowers. This program was created for those borrowers who:

1.Do not qualify for HAMP;
2.Are unable to complete a HAMP loan modification; or
3.Do not accept a HAMP loan modification.
The initial deadline for the non-GSE servicers and lenders to implement HAFA was April 5, 2010. The program expires December 31, 2012 unless it is extended. Lenders and servicers participating in HAMP, and all other qualifying loans, are required to follow the new rules in the HAFA program for all loans which meet the program’s qualifying criteria.

The HAFA guidelines were revised on March 26, 2010 in Supplemental Directive 09-09 Revised to deal with issues that had been raised with regard to the original HAFA short sale guidelines. The majority of the revisions dealt with increasing the amount of incentive payments for the parties to a HAFA short sale. Also, because of complaints about an apparent loophole for servicers to use portions of the real estate commissions to pay vendors who work for them, the language was changed to provide that vendor payments would be required to be made from the sales proceeds. The initial deadline for lenders to comply with HAFA was April 5, 2010. The program expires December 31, 2012. Lenders and servicers participating in HAMP, and all other qualifying loans, are required to follow the new rules in the HAFA program for all loans which meet the program’s qualifying criteria.

The HAFA program is described in Supplemental Directive 09-09 Revised and it regulates first lien mortgage loans that are not owned or guaranteed by Fannie Mae or Freddie Mac (Non-GSE Mortgages). Fannie Mae and Freddie Mac both issued thier own separate HAFA Guidelines on June 1, 2010 their own HAFA guidelines. The Fannie Mae HAFA Program and Freddie Mac HAFA program generally follow the same policies and procedures and almost mirror the model US Treasury Department's HAFA program.

However, it is important to note that there are differences between the three HAFA programs that are critical for real estate agents and borrowers to understand.

Most recently the Treasury Department in Supplemental Directive 10-18 released new and revised HAFA policies and guidelines for 2011 for all non-GSE servicers and lenders.

The HAFA program simplifies and streamlines the use of short sales and DIL options by incorporating the following unique features:

1.Standard process flow;
2.Minimum performance timelines;
3.Standard documentation;
4.Utilizes borrowers financial and hardship information collected in conjunction with HAMP, eliminating the need for additional eligibility analysis;
5.Allows the borrower to receive pre-approved short sale terms prior to the property being listed;
6.Prohibits the servicer from requiring, as a condition of approving the short sale, a reduction in the real estate commission agreed upon in the short sale agreement;
7.Requires that borrowers be fully released from future liability for debts (no deficiency liability); and
8.Provides financial incentives to borrowers, servicers and investors and junior lien holders.
Each participating servicer in HAFA must develop a written policy, consistent with each investor’s guidelines, including the Freddie Mac and Fannie Mae HAFA short sale rules. that describes the basis on which the servicer will offer the HAFA program to borrowers. This policy may incorporate such factors as the severity of the loss involved, local market conditions, the timing of pending foreclosure actions and borrower motivation and cooperation. Considering that the larger servicers may service loans for dozens of lenders and investors, creating special HAFA rules consistent with individual investor guidelines may be burdensome to implement.

Servicers must evaluate a borrower for a HAMP modification prior to any consideration being given to HAFA options. Every potentially eligible borrower must be considered for HAFA before the borrower’s loan is referred to foreclosure or the servicer allows a pending foreclosure sale to be conducted. If the program works as planned, HAFA policies will result in huge increases in the number of short sale transactions for the next few years. To learn more about the HAFA program visit www.certifiedhafaprofessional.com/ where you can purchase a comprehensive HAFA training course and gain access to numerous other HAFA resources for real estate agents.

The Certified HAFA professional designation for real estate agents includes over four hours of HAFA video training and access to the HAFA rules, guidelines and forms for the US Treasury Department HAFA program, Freddie Mac HAFA rules, and the Fannie Mae guidelines.