Watson Title Services | HAFA & HAMP Short Sale Programs


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This presentation is to help aid anyone who is interested in learning more about HAFA and HAMP short sale programs

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Watson Title Services | HAFA & HAMP Short Sale Programs

  1. 1. HAMP & HAFA
  2. 2. HAMP & HAFA <ul><ul><li>THE NEW MODIFICATION AND SHORT SALE PROGRAMS </li></ul></ul>
  3. 4. <ul><ul><li>HAMP – Home Affordable Modification Program ( Modification) </li></ul></ul><ul><ul><li>HAFA - Home Affordable Foreclosure Alternative (Short Sale ) </li></ul></ul>
  4. 5. <ul><ul><li>GSE – Government-sponsored enterprise </li></ul></ul><ul><ul><li>NON – GSE not owned or guaranteed by Fannie or Freddie </li></ul></ul><ul><ul><li>SPA – Servicer Participation Agreement </li></ul></ul>
  5. 6. <ul><ul><li>SSA - Short Sales </li></ul></ul><ul><ul><li>Agreement </li></ul></ul><ul><ul><li>RASS – Alternative Request for Approval of Short Sale </li></ul></ul><ul><ul><li>DIL – Deed – in - Lieu </li></ul></ul>
  6. 7. Where to Start: <ul><li>Check your list: http://makinghomeaffordable.gov/contact_servicer.html </li></ul><ul><li>Is the lender participating in the program? </li></ul><ul><li>Fannie Mae: 1-800-7FANNIE </li></ul><ul><li>Freddie Mac: 1-800-FREDDIE </li></ul><ul><li>Hope Hotline: 1-888-995-HOPE   </li></ul>
  7. 8. Introducing the Home Affordable Foreclosure Alternatives (HAFA): <ul><li>Streamlined short sale rules </li></ul><ul><li>Intended to speed up the short sale process </li></ul><ul><li>Incentivizes borrowers and lenders to work together to avoid foreclosure </li></ul><ul><li>In effect April 5, 2010 - Dec. 31, 2012 </li></ul><ul><li>Borrowers receive preapproved short sale terms from the lender PRIOR to putting the home on the market. </li></ul>
  8. 9. HAFA SNAPSHOT <ul><li>Lenders must fully release borrowers </li></ul><ul><li>Less negotiation demands </li></ul><ul><li>$6,000.00 is maximum for 2 nd lien holders </li></ul><ul><li>Borrowers walk away with $3,000.00 </li></ul><ul><li>Quick response from lender </li></ul><ul><li>Full commission paid to Realtor </li></ul>
  9. 10. HAMP – Home Affordable Modification Program ( Modification) <ul><li>Homeowners must first apply for a loan modification through the Home Affordable Modification Program, or HAMP to be eligible for HAFA. </li></ul><ul><li>Loan Modification options. </li></ul><ul><ul><li>Trial Period </li></ul></ul><ul><ul><li>Complete Trial Period Plan </li></ul></ul><ul><ul><li>Defaults on Modification (2 payments) </li></ul></ul><ul><ul><li>Request SSA or DIL </li></ul></ul>
  10. 11. Criteria to Qualify: <ul><li>1. Is it a principal residence? </li></ul><ul><li>2. Balance owed on the 1st mortgage is equal to or less than $729,750? </li></ul><ul><li>3. Are you having ongoing financial trouble? </li></ul><ul><li>4. Did you close before January 1, 2009? </li></ul><ul><li>5. Is your 1 st mortgage payment (including principal, interest, taxes, insurance and homeowner's association dues, etc) more than 31% of your current gross income? </li></ul>
  11. 12. HAMP Default Options for HAFA Participants: <ul><li>Do not qualify for a trial mortgage modification under the Making Home Affordable Program </li></ul><ul><li>Do not successfully complete the trial period for their modification </li></ul><ul><li>Miss at least two consecutive payments during their modification period </li></ul><ul><li>Request a short sale or deed-in-lieu of foreclosure. </li></ul>
  12. 13. Buyers of HAFA <ul><li>Contract must be Executed with all the appropriate addenda. </li></ul><ul><li>Buyer’s must have pre-approval or commitment letter on letterhead from a lender. </li></ul><ul><li>The sale must represent an “Arm’s Length” transaction. </li></ul><ul><li>Purchaser may not sell property within 90 calendar days of closing. </li></ul>
  13. 14. Who is Participating? <ul><li>Allstate Mortgage Loans and Investments </li></ul><ul><li>American Home Mortgage </li></ul><ul><li>AMS </li></ul><ul><li>Aurora loans </li></ul><ul><li>Bank of America </li></ul><ul><li>Chase </li></ul><ul><li>Citizens </li></ul><ul><li>Countrywide </li></ul><ul><li>EMC </li></ul><ul><li>Fidelity </li></ul><ul><li>HomEq </li></ul><ul><li>GMAC </li></ul><ul><li>Homestar </li></ul><ul><li>Navy Federal </li></ul><ul><li>Ocwen </li></ul>
  14. 15. www.makinghomeaffordable.com/contact_servicer.html <ul><li>RG Mortgage </li></ul><ul><li>Roebling Bank </li></ul><ul><li>Service One </li></ul><ul><li>Saxon </li></ul><ul><li>Shore Bank </li></ul><ul><li>Specialized Loan Servicing </li></ul><ul><li>Sterling Savings Bank </li></ul><ul><li>United Bank </li></ul><ul><li>US Bank </li></ul><ul><li>United Bank </li></ul><ul><li>Wachovia </li></ul><ul><li>Wells Fargo </li></ul><ul><li>Westcom </li></ul><ul><li>Wilshire </li></ul><ul><li>And Many More </li></ul>
  15. 16. HAFA TIME: <ul><li>Lenders now must offer a short sale in writing to the borrower within 30 days if the borrower does not qualify for, or complete a loan modification. </li></ul><ul><li>Borrowers then must respond within 14 days to the lender's short sale agreement. </li></ul><ul><li>Borrowers must submit the sales contract to the lender within 3 days , along with the buyers' mortgage preapproval and the status of negotiations with other lien holders on the seller's property. </li></ul><ul><li>Lenders must approve or deny the contract within 10 days. </li></ul>
  16. 17. HAFA, What’s in it for the Seller? <ul><li>HAFA rules also state that lenders must release borrowers from the obligation to repay the difference between the sales price and the loan amount </li></ul><ul><li>No deficiency judgments are allowed for a first or second loan </li></ul><ul><li>Up to $3,000.00 to the sellers for relocation. </li></ul>
  17. 18. HAFA: What’s in it for the Lender? <ul><li>$1,500.00 to loan servicers to cover administrative fees </li></ul><ul><li>The second mortgage lender was to receive $3,000.00. There is now $6,000.00 for 2nd lien holder incentives (6% Cap per lien) </li></ul><ul><li>There is an investor incentive of a federal match of up to $2,000.00 who agree to share short sale proceeds with second lien holders </li></ul>
  18. 19. HAFA, What’s in it for You? <ul><li>Short Sale Agreement gives the listing real estate agent the right to an undiscounted 6% commission at closing!! </li></ul>
  19. 20. Why HAFA Short Sales may close in a fraction of the time: <ul><li>Prelisted price the bank will take will be marketed </li></ul><ul><li>Contract will be looked at by the bank within 10 days </li></ul><ul><li>Less negotiation will take place since the guidelines spell out specific numbers. </li></ul><ul><li>HAMP will have received the hardship documents and ordered a property evaluation </li></ul><ul><li>Homeowners must meet the minimum eligibility for HAMP modification before HAFA. </li></ul><ul><li>90% of all lenders are participating in this program according to National Association of Realtors (NAR) </li></ul><ul><li>Bank might take a Deed in Lieu if property does not sell. </li></ul>
  20. 21. For the Over-Achievers: <ul><li>HAMP Modification dated March 2010: http://makinghomeaffordable.gov/docs/HAMP%20Improvements_Fact_%20Sheet_032510%20FINAL2.pdf </li></ul><ul><li>Making Home Affordable Plan: http://www.makinghomeaffordable.gov/index.html </li></ul><ul><li>The Mortgage Forgiveness Debt Relief Act and Debt Cancellation: http://www.irs.gov/individuals/article/0,,id=179414,00.html </li></ul>
  21. 22. Options for Those Who Do Not Qualify <ul><li>Forbearance: The “forbearance” agreement means that you pay only a portion of your regular payment or no payment at all for a specific period of time based on your current financial status. At the end of the forbearance period, you will begin making regular payments as well as an additional amount to pay off the past-due amount. </li></ul><ul><li>Repayment Plan: If you have missed some of your monthly payments, your mortgage servicer may be able to help you catch up by creating a schedule for repaying the past-due amounts. </li></ul><ul><li>Special mortgage relief assistance for active duty military service members . </li></ul><ul><li>Pre-foreclosure Sale: If you cannot sell your home for an amount that will pay off the mortgage loan, talk to your mortgage servicer about a pre-foreclosure or “short” sale. The mortgage servicer may be willing to accept a payoff amount less than what you owe on the mortgage balance in certain situations. </li></ul><ul><li>Deed-in-lieu of foreclosure: If you cannot sell your home in a reasonable amount of time, your mortgage servicer may agree to have you voluntarily transfer the deed to the property to them to help avoid the impact of a foreclosure on your credit rating. </li></ul>
  22. 23. MLS <ul><li>Realtor remarks: </li></ul><ul><li>Short Sale </li></ul><ul><li>Commission </li></ul><ul><li>HAFA - Home Affordable Foreclosure Alternative </li></ul><ul><li>Watson Title Services </li></ul><ul><li>Lender hereby agrees to extinguish all debt and liability to the note. </li></ul>
  23. 24. IT’S ABOUT YOUR TIME AND MONEY <ul><li>Take the stress off your seller </li></ul><ul><li>Free up your time to do what you do best – sell property </li></ul><ul><li>Get the seller out from under a hardship and the buyer into a new home </li></ul><ul><li>Deliver a full commission check to you at closing </li></ul>
  24. 25. Q & A