HAFA

Back in December 2010, I closed my first HAFA short sale with one very patient Connecticut homeowner. HAFA was a brand new program back then, and Bank of America was even more confused then they are today. On several occasions my client was ready to throw in the towel and walk away...but he stuck it out. Nine months later his short sale was approved and closed.

My client was richly rewarded for his patience when just 18 months later in May of 2012, he was approved for a new mortgage. It didnt take long to find the perfect home at a great price..with just one caveat - this home was also a short sale. Familiar with this process, we patiently settled in for the long road ahead. It took 5 more months and many headaches for this short sale to be…

In never thought I'd say these words...but  Ocwen to the rescue.

After struggling through months of unemployment and several failed attempts to modify their loan with Chase, these CT homeowners had given up and decided to just cut loose and sell their home in a short sale.

The home was an immediate hit and was under deposit within 2 weeks. A short sale package headed to Chase - the kings of incompetence. Fortunately  - less than two weeks later my homeowners received notice their loan had been sold to Ocwen.

We started all over with Ocwen. It took a few weeks for them to have the loan set up in their system, but once we were able to initiate the short sale, just a few short weeks later  our HAFA approval letter arrived. It took the buyers…

While in theory pre-approved pricing on short sales sounds fantastic...the reality often proves the opposite.

There are a few of these programs currently floating around. FHA has always had a preapproval process where an appraisal of the property can be ordered prior to having a buyer. HAFA has a similar model. Some lenders have their own in-house preapproved short sale processes, and Bank of America has their Co-op Program (which actually REQUIRES the homeowner to be pre-approved before a contract comes in). All offer the opportunity to get an appraisal or BPO (brokers price opinion) of the home prior to even going on market.

So - the homeowner decides they want to short sell and before they even call a Realtor, they call their helpful lender and…

So it seems at least a few lenders are successfully incorporating HAFA into their short sale processing. Despite massive delays in HAFA processing with most lenders, at least Nationstar seems to have this HAFA thing down.

Back in May of 2011, this Plainville, CT property was first listed. Two months later we secured a buyer for the property. The file headed off to Nationstar. Unfortunately the first time around the file lagged at Nationstar so long that Hurricane Irene came to Connecticut and sent most of my clients street underwater.

The property flooded, became uninhabitable and the buyer walked. In September we went back on market. Soon after we secured a cash buyer...however yet again Nationstar took their sweet time and by January our…

While none of my other HAFA experiences have ever been good ones, this Nationstar short sale was the exception to the rule and hopefully a sign of things to come.

My clients came to me when their two mortgages with Nationstar had become debilitating and their commute to work had become unmanageable.

After 6 weeks on market a buyer was secured and a full short sale package headed to Nationstar.

 A few weeks later I heard from our negotiator.

While my client was not “delinquent enough” to be approved for an in-house short sale, they could be approved via HAFA.  Despite 9-15 month timeframes on my previous HAFA approvals, seeing no other option I advised my client to go ahead and attempt the HAFA short sale.

To my surprise – Less than…

HAFA - Governments "streamline" short sale solution? I dont know about you, but to me 14 months and streamline sounds like an oxymoron.

I've never been a fan of HAFA, and this Seterus short sale certainly didn't sway my opinion. I originally listed this Middletown, CT property and immediately my clients applied for the HAFA program. 6 months later, my clients were approved for HAFA...at about 30% over market value. We were unable to find a buyer to pay 130% of market value....but we were able to find one to pay market value. We moaned and groaned and convinced the lender they were off base with their value...and they did reconsider several months later. Unfortunately by then the buyer was long gone and we had had the pleasure of starting all…

July, 2010 I took a new Connecticut short sale listing. This was a Fannie Mae Bank of America loan. Fannie Mae had just gotten on board with HAFA and my new clients wanted to go with the program.

HAFA was supposed to be governments solution to “streamlining ” and “simplifying” the short sale process.

A summary of the last 15 months:

July 2010 –  I met with my new clients and their property went on market

October 2010  - After about 6 weeks  Bank of America finally acknowledged our requests and a  HAFA short sale file was opened.

December 2010 – A HAFA approval letter arrived with a GROSSLY EXAGGERATED valuation of the property that could NEVER be reached. We started the value dispute process.

April 2010 – After 5 months…

A perfect example of why HAFA is a miserable failure

I wasn't always against HAFA. When HAFA was announced last April, I attempted to remain optimistic about the program, despite feeble results from anything else produced by government to ease our housing problems.

Over a year later, I can officially say I hate HAFA. If my clients opt into this program I always do my best to get them through it, but the truth is the success rate of HAFA is unbelievably slow and low. Less than 1 in 10 of those I have seen through the program has actually had a desirable ending with HAFA, and unbelievable amounts of time get wasted in the process.

Just the other day I received another HAFA "approval" that presents many of the usual problems. At least this time…

Should I choose a HAFA short sale?

Many Connecticut homeowners that have decided to short sell will inevitably be offered the option of choosing to go with the lenders traditional short sale program or HAFA (Home Affordable Foreclosure Alternatives)- government's short sale program.

While HAFA was originally touted as a "streamlined" solution to help underwater American homeowners and offers some benefits such as full debt forgiveness and $3,000 cash incentive, the reality of HAFA has proved to be quite different.

The decision to opt in or out of HAFA should not be taken lightly and here I have outlined the realities of both scenarios to help you make a decision.

The pros and cons of your lenders traditional short sale program vs.…

It took 9 months and a ton of aggravation but I finally witnessed a HAFA short sale actually close. This Connecticut short sale seller contacted me in March 2010 to get his home sold. Between a Bank of America first mortgage and a Bank of America HELOC, the home was seriously upside down.

Not two weeks later we had a buyer in contract and the sale was moving along smoothly in Equator. We anticipated a closing soon after. NOT SO FAST!!!! In early April the troubles began when my client became eligible for HAFA.

Although at that time the program was brand new and we did not know what to anticipate, the promise of $3000 and full debt forgiveness was too much for my seller to pass on and he decided to pursue the HAFA short sale approval.

A 9 month…