"We Were Just Talking About HAFA Freddies With AMS And I Could Not Find A Single Closing Yet, But You May Be The First…So Hang In."
I’m not posting this excerpt from an email I recently received from a HAFA Team Manager at Bank of America for bragging rights. I’m posting it as a cautionary tale because the Spin Doctors are at it again.
I’ve been sitting back watching, reading about and listening to the increasing hype about the HAFA (Home Affordable Foreclosure Alternatives) Program. There’s lots of high fiving, back slapping and baby kissing going on and, if you believe the bullet points and sound bites, this program will not only save you from the financial devastation and social humiliation of a foreclosure, it will send you away from the closing table with money in your pocket and a guaranteed mortgage in your future (I think you also get a toaster but I’ll have to check on that.)
The “We Can Negotiate a Short Sale For You in 30 Days” crowd is out in force dangling the HAFA carrot in front of the unwary homeowner and the “Pay Us An Exorbitant Amount of Money So You Can Use Our Specialist Designation to Generate More Distressed Homeowner Prospects” crowd is also out in force touting how easy a short sale is now going to be (if you just take their course that is) to the unwary and uneducated Real Estate professional.
Now I am sure this program will help some folks in some circumstances and surely it will be more successful than the Hope for Homeowners Program, which at last count I believe had helped four families in Boise, but, unfortunately it is not quite the panacea it is being hailed as.
The Hype makes it sound like the process is a breeze…you realize you are in trouble and the responsible thing to do is to try to make a Graceful Exit (the Making Home Affordable website even has a video entitled “Your Graceful Exit” touting HAFA), you contact your lender and tell them. They quickly and seamlessly collect your financial information and a valid and reasonable price opinion on your house and then present you with an agreement (the SSA) that includes the price they will accept and the terms under which they will accept them and send you off to sell your home in a specified length of time.
You can now sleep soundly at night secure in the knowledge that your lender has agreed to accept the net proceeds as their total payoff for your loan and has waived their right to go after you for any deficiency. Sounds good, huh?
The reality is that there are three sets of guidelines out there as to how the HAFA program must be implemented…one for Fannie Mae backed loans, one for Freddie Mac backed loans and one for the Non-GSE investors (who may or may not choose to participate). And trust me when I tell you the servicers have not figured them out yet.
For instance, I recently had to go to Freddie Mac to stop Wells from foreclosing on one of my clients who was in the midst of a HAFA evaluation. The reason Wells initially gave me as to why they would not stop the foreclosure was that there was no offer.
Beyond the fact that the whole point of HAFA is that the homeowner’s financial situation can be evaluated and approved prior to an offer; with a Freddie Mac HAFA, it must be. If you accept an offer before you have received and signed the SSA, you get drop kicked out of the program. Talk about having it backwards!
I could go on with numerous other tales of servicer confusion regarding HAFA and the nightmare stories I've heard of HAFA short sales derailed at the 11th hour because of misinterpretation of, confusion about, or plain ignorance of the guidelines for the specific HAFA program but I’ll spare you. My point here is that this is not quite the slam-dunk that the hype makes it out to be. So, if you are considering going for a HAFA short sale in Southern New Hampshire make sure the agent you are working with knows the guidelines because you sure can’t depend on your servicer to know them.
If you are considering a short sale in Southern New Hampshire, Hillsborough and Rockingham County and would like accurate information about HAFA, the FHA Preforeclosure Sales Option and other programs, contact me at 603-490-5344.