HAFA Series Part 3 – Which loan servicers are participating and review of the timeframes

This is part 3 in a 5 part series on HAFA.

HAFA is the Home Affordable Foreclosure Alternatives program from the U.S. Treasury effective April 5, 2010.  HAFA is designed to complement the HAMP program and is expected to streamline and standardize the short sale process for qualified homeowners.

What Loan Services (Banks) are participating?

According to HUD, over 100 loan servicers have signed up for the Making Home Affordable program covering more than 89% of mortgage debt.  To see if your lender is on the list, go to http://www.makinghomeaffordable.gov/contact_servicer.html and click on “show all servicers.”

What is the Timeline of the HAFA short sale process?

14 Days- The lender must notify the borrower of their options in writing and give the borrower 14 days to respond. If the borrower does not respond that ends the lenders duty to give a HAFA offer.

30 Days- Servicers must consider borrowers for the HAFA plan within 30 days of one of the following:

• If the borrower does not qualify for a HAMP trial period,
• or does not successfully complete a HAMP trial period plan,
• or is delinquent on a HAMP modification,
• or requests a short sale

14 Days-  The loan servicer will prepare and send a Short Sale Agreement to the borrower/seller. The Seller has 14 days to return a fully executed Short Sale Agreement to the lender.  The short sale agreement will contain a variety of terms including:

• Acceptable list price and/or net proceeds from the sale
• 120 Days-The lender must give the Seller 120 days to sell the short sale the house (extensions up to 12 months possible).
• Requirement that the property be listed with a licensed real estate professional who is regularly doing business in the community
• Amount of closing costs or other expenses servicer will permit

3 Days-Within 3 days of receiving an offer, Seller (via the real estate agent) must submit a completed Request for Approval of Short Sale (RASS) to the lender along with the complete purchase agreement and additional information per the short sale agreement.

45 Days-The lender may not ask the Seller (borrower) to close before 45 days unless Seller/Buyer agrees.

10 Days-Lender must release the first mortgage lien from receipt of short sale proceeds.

HAFA Series Part 1 – What is the Home Affordable Foreclosure Alternatives Program?

HAFA Series Part 2…Who is eligible for HAFA?

Are you a Las Vegas Homeowner facing a possible foreclosure or considering a short sale? Contact us today to discuss your options and/or to see if you qualify for HAFA.

Call Kathryn at 702-348-7191 or Stephanie 497-7705.

Related posts:

1. HAFA Series Part 5 – Can I Request a HAFA Short Sale without doing a HAMP modification?
2. HAFA Series Part 4 – What else should I know about Home Affordable Foreclosure Alternatives?
3. HAFA Series Part 2…Who is eligible for HAFA?