HAFA sets lender deadlines for approvals

The federal government is trying to streamline the short sale process, thanks to new changes implemented in the federal government’s Home Affordable Foreclosure Alternatives (HAFA), according to Pat Moyer, a REALTOR® in Malvern and an instructor of NAR’s Short Sales and Foreclosure Resource certification course.

HAFA was designed for homeowners who don’t qualify for the Home Affordable Modification Program (HAMP) which offers lower interest rates for those who are delinquent on their mortgage payments, Moyer said. HAFA allows the homeowner to avoid foreclosure and facilitate a short sale. The HAFA program isn’t available for those who have mortgages through Fannie Mae or Freddie Mac, which will have their own guidelines to modify mortgages.

HAFA has set some timeframes so the lender can’t take its time approving the loan modification, Moyer explained. “The new HAFA guidelines should move the process along faster. Prior to HAFA, the whole foreclosure process used to vary from one lender to another so the consumer never knew what to do.”

HAFA also offers financial incentives to the loan servicer, the borrower and the investor. “The program is helpful but the consumer needs to meet all of the qualifications. The application process is getting better but it’s still complex with a 50-page application,” she said.

REALTORS® need to dig deeper with their clients to determine if the transaction could be a short sale, Moyer said.

 “Different circumstances require us to ask more questions today,” Moyer said. “For example, many consumers don’t think of a home equity loan as a mortgage. The combination of two or more mortgages can make a difference in whether there will be sufficient funds at closing. Checking public records is a good way to get an idea of where the home owner stands financially to determine if property taxes are owed. There are new situations arising that have changed how we do business.”

Statistics show that short sales will continue to be part of the real estate landscape for the next several years, she said. “There are many REALTORS® who don’t want to work with short sales but I think we’re going to see more in the next three years,” Moyer said. “Short sales is an area we all need to know a little more about. “

Related posts:

1. Don’t overreach with short sales

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Tags: foreclosures, HAFA, HAMP, short sales

This entry was posted on Tuesday, July 13th, 2010 at 6:00 am and is filed under Industry News. You can follow any responses to this entry through the RSS 2.0 feed.