Watson Title Services HAFA & HAMP Programs

HAMP & HAFA

HAMP & HAFA
THE NEW MODIFICATION AND SHORT SALE PROGRAMS

HAMP – Home Affordable Modification Program ( Modification)
HAFA - Home Affordable Foreclosure Alternative (Short Sale )

GSE – Government-sponsored enterprise
NON – GSE not owned or guaranteed by Fannie or Freddie
SPA – Servicer Participation Agreement

SSA - Short Sales
Agreement
RASS – Alternative Request for Approval of Short Sale
DIL – Deed – in - Lieu

Where to Start:
Check your list: http://makinghomeaffordable.gov/contact_servicer.html
Is the lender participating in the program?
Fannie Mae: 1-800-7FANNIE
Freddie Mac: 1-800-FREDDIE
Hope Hotline: 1-888-995-HOPE

Introducing the Home Affordable Foreclosure Alternatives (HAFA):
Streamlined short sale rules
Intended to speed up the short sale process
Incentivizes borrowers and lenders to work together to avoid foreclosure
In effect April 5, 2010 - Dec. 31, 2012
Borrowers receive preapproved short sale terms from the lender PRIOR to putting the home on the market.

HAFA SNAPSHOT
Lenders must fully release borrowers
Less negotiation demands
$6,000.00 is maximum for 2 nd lien holders
Borrowers walk away with $3,000.00
Quick response from lender
Full commission paid to Realtor

HAMP – Home Affordable Modification Program ( Modification)
Homeowners must first apply for a loan modification through the Home Affordable Modification Program, or HAMP to be eligible for HAFA.
Loan Modification options.
Trial Period
Complete Trial Period Plan
Defaults on Modification (2 payments)
Request SSA or DIL

Criteria to Qualify:
1. Is it a principal residence?
2. Balance owed on the 1st mortgage is equal to or less than $729,750?
3. Are you having ongoing financial trouble?
4. Did you close before January 1, 2009?
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?

HAMP Default Options for HAFA Participants:
Do not qualify for a trial mortgage modification under the Making Home Affordable Program
Do not successfully complete the trial period for their modification
Miss at least two consecutive payments during their modification period
Request a short sale or deed-in-lieu of foreclosure.

Buyers of HAFA
Contract must be Executed with all the appropriate addenda.
Buyer’s must have pre-approval or commitment letter on letterhead from a lender.
The sale must represent an “Arm’s Length” transaction.
Purchaser may not sell property within 90 calendar days of closing.

Who is Participating?
Allstate Mortgage Loans and Investments
American Home Mortgage
AMS
Aurora loans
Bank of America
Chase
Citizens
Countrywide
EMC
Fidelity
HomEq
GMAC
Homestar
Navy Federal
Ocwen

www.makinghomeaffordable.com/contact_servicer.html
RG Mortgage
Roebling Bank
Service One
Saxon
Shore Bank
Specialized Loan Servicing
Sterling Savings Bank
United Bank
US Bank
United Bank
Wachovia
Wells Fargo
Westcom
Wilshire
And Many More

HAFA TIME:
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.
Borrowers then must respond within 14 days to the lender's short sale agreement.
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.
Lenders must approve or deny the contract within 10 days.

HAFA, What’s in it for the Seller?
HAFA rules also state that lenders must release borrowers from the obligation to repay the difference between the sales price and the loan amount
No deficiency judgments are allowed for a first or second loan
Up to $3,000.00 to the sellers for relocation.

HAFA: What’s in it for the Lender?
$1,500.00 to loan servicers to cover administrative fees
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)
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

HAFA, What’s in it for You?
Short Sale Agreement gives the listing real estate agent the right to an undiscounted 6% commission at closing!!

Why HAFA Short Sales may close in a fraction of the time:
Prelisted price the bank will take will be marketed
Contract will be looked at by the bank within 10 days
Less negotiation will take place since the guidelines spell out specific numbers.
HAMP will have received the hardship documents and ordered a property evaluation
Homeowners must meet the minimum eligibility for HAMP modification before HAFA.
90% of all lenders are participating in this program according to National Association of Realtors (NAR)
Bank might take a Deed in Lieu if property does not sell.

For the Over-Achievers:
HAMP Modification dated March 2010: http://makinghomeaffordable.gov/docs/HAMP%20Improvements_Fact_%20Sheet_032510%20FINAL2.pdf
Making Home Affordable Plan: http://www.makinghomeaffordable.gov/index.html
The Mortgage Forgiveness Debt Relief Act and Debt Cancellation: http://www.irs.gov/individuals/article/0,,id=179414,00.html

Options for Those Who Do Not Qualify
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.
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.
Special mortgage relief assistance for active duty military service members .
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.
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.

MLS
Realtor remarks:
Short Sale
Commission
HAFA - Home Affordable Foreclosure Alternative
Watson Title Services
Lender hereby agrees to extinguish all debt and liability to the note.

IT’S ABOUT YOUR TIME AND MONEY
Take the stress off your seller
Free up your time to do what you do best – sell property
Get the seller out from under a hardship and the buyer into a new home
Deliver a full commission check to you at closing

Watson Title Services HAFA & HAMP Programs

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Watson Title Services HAFA & HAMP Programs Presentation Transcript