HAFA Series Part 5 – Can I Request a HAFA Short Sale without doing a HAMP modification?
ByThis is part 5 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.
The previous posts covered the eligibility, participating servicers/lenders, and the procedures and time-frames for HAFA for a borrower who has already started the HAMP process.
This post will answer the question Can I Request a HAFA Short Sale without first applying for HAMP (the loan modification program)?
The short Answer – Maybe Yes… with the Alternative Request for Approval of Short Sale (Alternative RASS)
Here is the scenario:
You are a homeowner who did not know about the HAMP program or possibly can not or do not want to pursue a loan modification. The property is your primary residence and you have a hardship that can be documented and are considering a short sale as an option. To qualify for HAFA, you will have to meet all the basic eligibility requirements outlined in this previous post.
Your next step is to contact a licensed real estate agent (we can help!) and review all of your options including the Alternative Request for Short Sale Approval through the HAFA program. If your decision is to do the short sale, we list the property and help you negotiate an offer to purchase from a qualified borrower.
Here are the highlights of the Alternative RASS directly from the Supplemental Directive:
If the borrower has an executed sales contract and requests the servicer to approve a short sale under HAFA before an Short Sale Agreement (SSA) has been executed, then the borrower must submit the request to the servicer in the form of the Alternative Request for Approval of Short Sale (Alternative RASS), Exhibit B. To download and review an example of the documents got to the HAMP Admin site and scroll down to Borrower Documents.
Upon receipt of the Alternative RASS, the servicer must determine the basic eligibility of the borrower as described in the HAFA Consideration section of the Supplemental Directive…..HAFAsd0909r_Mar26_2010.
If the borrower appears to be eligible and was not previously considered for a Trial Period Plan, the servicer must notify the borrower verbally or in writing of the availability of a HAMP modification and allow the borrower 14 calendar days from the date of the notification to contact the servicer by verbal or written communication and request consideration for a HAMP modification.
In addition, the servicer must verify the borrower’s financial information through documentation and obtain a signed Hardship Affidavit from the borrower prior to approving the short sale.
If the borrower does not wish to be considered for a modification, the servicer may consider the Alternative RASS in accordance with this Supplemental Directive without first having to enter into an SSA with the borrower. If the servicer approves the short sale, then the loan will qualify for the HAFA program.
A borrower may not participate in a HAMP Trial Period Plan and agree to a HAFA SSA simultaneously.
Read the rest of the series on HAFA:
- HAFA Series Part 1 – What is the Home Affordable Foreclosure Alternatives Program?
- HAFA Series Part 2…Who is eligible for HAFA?
- HAFA Series Part 3 – Which loan servicers are participating and review of the timeframes
- HAFA Series Part 4 – What else should I know about Home Affordable Foreclosure Alternatives?
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.
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Great information. I learned a little something about short sales today.