Priority Real Estate is a HAFA Certified Specialist
What is HAFA?
How Does HAFA help me?
Why choose a HAFA Certified Professional?
Cash Back Incentives for HAFA Short Sales?
How does a Short Sale and Deed-In-Lieu work?
HAFA Short Sale guidelines?
Recent HAFA Changes?
Why Choose Priority Real Estate?
Does my lender participate in HAFA?
How can I find out if I am eligible for a HAFA Short Sale?
What is HAFA? - Back to Top
HAFA – (Home Affordable Foreclosure Alternative)
The Home Affordable Foreclosure Alternatives (HAFA) program was designed by the U.S. Treasury Department to assist struggling homeowners to avoid foreclosure by short selling their home. The HAFA short sale program also provides cash at closing to the homeowner (seller – 3,000.00 at closing). The program has a specific timeframe to sell the home, and the required sale price is determined up front by the mortgage bank or lender. This program does not work for all homeowners or all properties. See if you qualify for the HAFA Short Sale program. Click Here.
Does My Lender Participate In HAFA?
How Do I Apply For A HAFA Short Sale?
How does HAFA help homeowners? – Back to Top
- Establishes a standard set of processes, guidelines and timeframes.
- Lenders are required to respond to all HAFA short sale offers within 10 days on a HAFA qualified property.
- Financial cash incentives ($3,000 – Paid at closing) payable to homeowners, servicers and investors. This provides a significant financial motivation for the banks, lenders and services, and allows some financial assistance for the homeowner to help them relocate to a new home. Some Lenders also offer cash incentives in addition to what the government is offering. Call to find out what programs your lender offers specifically.
- Homeowner is automatically relieved of all future debt responsibility for all loans. The lender has to agree to forgive the entire amount of debt in all HAFA short sale transactions.
- Pre-approved short sale terms before the home is actually listed for sale in the local MLS.
- Streamline HAFA short sale eligibility by using information previously gathered from a HAMP evaluation (Home Affordable Modification Program). Saves the homeowner additional work gathering paperwork a second time.
Home Affordable Foreclosure Alternative Program (HAFA)
The Home Affordable Foreclosure Alternatives program came as a result of the Government’s Making Home Affordable programs put in place. The HAFA program as it is widely known, even allows for a cash-back incentive at closing when you are approved for a HAFA short sale of your home. Short sale incentives for homeowner’s also include formal timeframes to list and sell your home.
Because of the serious nature of selling your home involved in a Short Sale, it is imperative you select a real estate agent that is HAFA certified, has the short sale experience and has a successful track record of proven results. The last thing you would want is to work with someone unfamiliar with HAFA. This leaves you with fewer options to choose from, and could result in a significant financial cost to you. Priority Real Estate is HAFA certified, has a proven track record of successful Short Sales, and is 100% dedicated to obtaining the best resolution for our clients.
Recent Changes to the Making Home Affordable Programs – Back to Top
If you are unable to qualify for a Home Affordable Modification, there are incentives to you, loan servicers and investors to encourage short sales and deeds-in-lieu of foreclosure. This allows you as the homeowner as well as the lender to avoid the costly foreclosure process.
How The Home Affordable Short Sale / DIL Programs Work – Back to Top
Short sales and a DIL (Deed-In-Lieu of Foreclosure) provide an opportunity for homeowners to avoid the negative impact of a foreclosure. In a short sale, a lender or servicer allows the borrower to sell the property at the current appraised value. This allows for the home to sell for less than the total amount owed on the mortgage. All short sale approvals require the borrower to list the home for sale, and actively market the home. For the lender to approve a short sale offer from any prospective buyer, the sale requires the final net amount (after closing costs) applied to the mortgage balance payoff.
In the event, the borrower is unable to sell the home within the agreed upon time frame, the lender or servicer may then consider a DIL. A DIL allows the homeowner to voluntarily transfer ownership of the property to the lender or servicer.
Borrower (Homeowner) Eligibility:
Borrowers are eligible for the (HAFA) Home Affordable Foreclosure Alternative Program provided they have met the eligibility criteria for a Home Affordable Modification but for whatever reason did not qualify for a modification. In some cases the borrowers were unable to keep up with a trial period payment plan or payments after a full loan modification.
HAFA participating servicers must determine if each borrower is eligible rather than going to the foreclosure process. Considerations in the determination include property condition and value, average marketing time in the community where the property is located, the condition of the title including the presence of junior liens and a determination that the net sales proceeds are expected to exceed the investor’s recovery through foreclosure.
Cash-Back Incentive Payments:
Borrowers may receive incentive compensation of up to $3,000.00 to assist with relocation expenses. These are paid at closing once approved for a HAFA short sale.
Standard Documentation Requirements:
The program offers a standard set of documentation, including a Short Sale Agreement and an Offer Acceptance Letter. These documents outline marketing terms, describe the rights and responsibilities of everyone involved, and specifies a timeframe to complete the transaction. The standards were designed to minimize confusion and to increase use of the short sale as a key option.
Short Sale Property Valuation:
The lender or servicer will determine the current property value as well as the minimum net amount an investor will find acceptable to close a short sale. The servicers will provide specific instruction to the agent regarding the minimum-listing price of the home as well as any reductions in price if necessary. An appraisal and/or a Broker Price Opinion (BPO similar to an appraisal) typically to determine the price.
Minimum and Maximum Duration:
Lenders or servicers will allow at least 90 days to market and sell the property. Depending on market conditions, the lenders or servicers may allow more time to market the home when necessary. These programs require the property to be listed with a licensed agent, experienced in selling short sale properties in the area. Even though the home is listed for sale, the foreclosure process will likely continue at the same time behind the scenes with the lender. A foreclosure sale will not occur as long as the borrower is making every effort in good faith to sell the property. There is typically an absolute maximum of 1 year to market the property.
Fees and Charges:
Servicers may not charge borrowers fees for participation in the Foreclosure Alternative Program.
Property Eligibility:
Any junior liens, mortgages or other debts against the property must be cleared for the property to be sold as a short sale or deeded to the servicer. The servicer can proceed with a short sale or deed-in-lieu if there is a reasonable belief that all liens on the property can be cleared.
HAFA Program Expiration:
The Home Affordable guidelines state the program expires on December 31, 2012.
Deed-in-Lieu of Foreclosure (DIL):
The Short Sale approval will often include a clause allowing the borrower to deed the property to the lender or servicer in exchange for a total release from the debt obligation should the property not sell within the specified time. Typically the borrower / homeowner have 30 days to vacate the property and would be entitled up to $3,000.00 to assist with moving expenses. In some instances, a lender or servicer may provide additional money to the borrower at their discretion
Please contact our certified, experienced, professional team at Priority Real Estate for questions about a HAFA short sale program. If you are considering a short sale of your home, Please call Priority Real Estate at (949) 900-3800 or submit a request or a free consultation here.
Why choose a HAFA Certified Professional? - Back to Top
Once you have made the important decision to short sale your home to avoid a foreclosure, you simply cannot afford the costly mistake of selecting an agent that is not a certified HAFA short sale specialist.
Throughout the course of a short sale, there may be some unanticipated twists and turns that must be handled properly by a certified professional. Changes in the home value over time, new guidelines, lender changes in net price to name a few, can be costly in the hands of an inexperienced short sale agent.
Why Choose Priority Real Estate? - Back to Top
- ALL team members are HAFA Certified Professionals
- Initial free consultation to determine the best course of action
- 36+ years of real estate, short sale and lending experience
- $100 Million+ in closed transactions
- Successful Short Sale transactions with nearly all lenders
- 13+ years of lending experience provides us a competitive edge when negotiating with your lender
- In-House short sale negotiators
- Short sale support team on all transactions
- Professional guidance to avoid a foreclosure including a no cost loan modification as the first step in the process.
- Guidance with preparation of all necessary paperwork.
What are the Cash Back Incentives at Closing for a HAFA Short Sale? - Back to Top
With so many notices of default (NOD) being recorded each month in California, we desperately needed an alternative to the foreclosure crisis, so the Government sponsored programs have become a critical step to improving the housing market
The Obama Administration announced incentives and uniform procedures for short sales under its new Foreclosure Alternatives Program (FAP).
Responding to the desperate calls from the National Association of REALTORS (NAR), The Foreclosure Alternative Program (FAP) offers financial incentives to banks, investors, loan servicing companies, and even homeowners to stimulate the prevention of foreclosures, and to assist homeowners with an incentive to help to make new living arrangements.
Below is an outline of the incentives offered by the government through the HAFA program:
- Up to $3,000 for homeowners to help with relocation expenses.
- $1,500 paid to the bank, investors or servicers for the successful completion of a short sale or Deed-In-Lieu (DIL). This is to cover administrative and processing costs.
- Up to 6% allowed to be paid toward junior lien holders to release their liens
- First lien holder can receive up to $2,000 as incentive to allow payoffs to junior lien holders.
The HAFA programs also requires the following terms and conditions are to be met by the Banks, Investors, Servicers and the Homeowners – Back to Top
- Service companies or Banks must first determine if the homeowner and the property are eligible for a short sale prior to consideration of a Foreclosure.
- Banks or Servicers may not charge fees to borrowers/homeowners for participating in the FAP.
- In the Short Sale Agreement, servicers must give borrowers/homeowners at least 90 days to market and sell the property.
- Property must be listed with a licensed real estate professional and no foreclosure may take place during the marketing period (at least 90 days) specified in the Short Sale Agreement.
- Property value must be determined by an approved Appraiser or using a Broker Price Opinion (BPO).
- Banks or Servicers will independently establish both property value and minimum net return to the bank, in accordance with investor requirements.
- The price may be determined based on an appraisal or one or more broker price opinions (BPOs)
In addition to the federal government incentives listed above, many banks and services have developed additional incentives to homeowners to help them avoid foreclosure. Many of our successful short sales have included up to a 1% incentive paid to homeowners just for cooperating with the short sale. These incentives are usually paid by the bank/lender at the close of the short sale transaction.
Negotiating short sales requires the experience, negotiating skills, persistence, and an outstanding knowledge of the short sale process. In addition, we are certified HAFA program specialists so can feel confident of the best possible outcome at close of escrow. The Priority Group reviews all client short sale files very carefully to insure we have all the necessary items fro a successful short sale. We only submit the short sale package when all the lenders requirements are complete, and we feel confident in our chances for a successful short sale.
Our experience, results, knowledge and professionalism is key to our successful short sale negotiations.
Call The Priority Group for a FREE no obligation phone consultation to discuss the options you have available. We CAN help!
You may email us at info@PriorityRealtor.com or Call (949) 900-3800 for further information.
