Sacramento Short Sales Benefit from HAFA Changes

Sacramento Short Sales Benefit from HAFA Changes

The government has made improvements to the HAFA Program and the changes are helping Sacramento Short Sales. Until recent, the HAFA program was for the most part a huge disappointment. Yet another government program that was terribly ineffective. I am not an advocate of the Making Home Affordable Program in general, and in fact many of my clients, or Sacramento Short Sale sellers have tried a modification through Making Home Affordable. They have either been denied, gotten a terrible modification that really doesn't help at all or have been waiting for answers from their lender sometimes up to a year or more. However, the changes to HAFA are positive and it seems that now lenders are approving the HAFA short sale more and more. Again, Sacramento Short Sales have and will continue to benefit.

The changes to the guidelines are as such. Now you are eligible for HAFA if you have either lived in the property in the last 12 months or are currently living in the home. In the past you must be living in the home currently. The biggest change is, in the past you had to of either applied for a loan modification through Making Home Affordable and been denied or defaulted on a loan modification. You can now apply for HAFA without having ever applied for Making Home Affordable loan modification.

The rules that still apply are, the property must be a primary residence, no investor or non-owner occupied properties will be eligible under HAFA. The mortgage must have been originated before January 1, 2009. The mortgage must be owned or guaranteed by Fannie Mae or Freddie Mac and the principal balance does not exceed $729,750. The borrowers total monthly house payment must exceed 31% of the total gross monthly income. The homeowner also must demonstrate a hardship with the homeowner either already being delinquent or delinquency being foreseeable.

Now keep in mind, while lenders are now automatically qualifying short sale sellers for HAFA, that does not guarantee the borrower will be approved for HAFA. The twist to this is, the government and the Making Home Affordable Program have specific guidelines for the HAFA program, but not all lenders or Mortgage Insurance Companies follow the same guidelines. Some have their own criteria or slight changes. This can lead to the ultimate denial of the application for HAFA.

What Is HAFA ?

A HAFA short sale is a program offered by Making Home Affordable. Lenders and servicers that participate in the HAMP program automatically are obligated to participate in the HAFA program. The HAFA program allows the homeowner to short sale their home if the eligibility criteria are met. There are specific timelines to a HAFA short sale and the lenders must follow those timelines in order to complete the process. The homeowner is also allowed $3000 in relocation assistance under this program once the short sale is complete. Another big point is with a HAFA short sale the lender must guarantee to the homeowner that the loan is satisfied in full and there will be no deficiency. In Califo
ia there is additional protection for homeowners against deficiency in a traditional short sale as well. In order to participate in the program there must be a Request for Mortgage Assistance form submitted to your lender. RMA Form This document along with the letter of hardship are the first steps in order to get the process started.

We at Sacramento Short Sale Resource have specific training in the HAFA program and can help you get the process started.