FHA Guidelines

does bbt participate in the hafa program

The Home Affordable Foreclosure Alternatives (HAFA) program was developed to give homeowners a way to settle their mortgage debt without going through a foreclosure.The goal of this program is to help you sell your home in a short sale and settle your mortgage debt if you owe more on your mortgage than your house is worth and are unable to qualify for a home loan assistance program.This federal government program streamlines the short sale approval process and offers financial incentives to help you with relocation.

Today’s post is dedicated to helping families find an alternative to foreclosure, and helping them return to the goal of homeownership more quickly; therefore, we are emphasizing the brochure developed by the National Association of Realtors (NAR) that nicely summarizes the existing HAFA Program.On November 30, 2009, the Obama Administration released guidelines and uniform procedures for its Home Affordable Foreclosure Alternatives Program (HAFA). Modified HAFA rules for loans owned or guaranteed by Fannie Mae or Freddie Mac will be issued in coming weeks. HAFA does not apply to FHA or VA loans.

It is important to know that while most of the major mortgage holders in the U.S. participate in the HAFA program, not all do.  Contact us to find out how you can determine if your the owner of your mortgage will consider a HAFA short sale.

Allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).Prohibits the servicers from requiring a reduction in the real estate commission agreed upon in the listing agreement (up to 6%).Requires borrowers to be fully released from future liability for the first mortgage debt and, if the subordinate lien holder receives an incentive under HAFA, that debt as well (no cash contribution, promissory note, or deficiency judgment is allowed).

After the borrower contracts to sell the property, the borrower submits a “request for approval of short sale” (RASS) to the servicer within 3 business days for approval. If the borrower already has an executed sales contract and asks the servicer to approve it before an SSA is executed, the Alternative RASS is used instead. The servicer must still consider the borrower for a loan modification.The guidance states that a servicer may not require a reduction in the real estate commission below the amount stated in the SSA, up to 6%. However, if the servicer has retained a vendor to assist the listing broker, the vendor must be paid a specified amount from the commission.

There is automatic disqualification for HAFA programs for investment property owners and borrowers who have government loans. If you have assets and can afford your mortgage payments, even if you are upside down on your mortgage, you won’t qualify.  If you do not qualify for the HAFA program, you may qualify for a short pay off, which is similar to the HAFA program. A short pay off is when you want to sell your home and you are upside down and you agree to sign a note for the difference between what you sell your home for and what you owe the lender on your mortgage, or you sign a note for a portion of the outstanding loan balance. You must prove that you can pay off the debt and have good credit.  Not all lenders will accept a short pay off so you need to check with your lender if they will accept one.  It does not hurt to ask.  If not, then they may still have another program that may work for you.

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