How The HAFA Short Sale Program Works
CLICK HERE to meet with a certified HAFA Short Sale representative for free!
How does the HAFA program work? Well, the program is very complex. It uses the borrower’s financial and hardship information when considering loan modification. It allows borrowers to receive pre-approved short sale terms before listing the property, which includes the minimum acceptable net proceeds.
Servicers (banks, lenders, etc) are prohibited from requiring a reduction in the real estate commission agreed on, which is up to 6 percent. Borrowers are fully released from future liability for the first mortgage debt within 10 business days from the date the servicer receives the sale proceeds, which means that no promissory note, deficiency judgement or cash contribution is allowed.
Servicers will set monthly mortgage payment during the marketing period. This payment is not to exceed 31% of the borrowers gross monthly income. Like any other loan modifications, all standard processes, documents and timeframes apply.
The program also includes several financial incentives including $1,500 to go towards the borrower’s relocation cost. Servicers can receive $1,000 to help with their administrative and processing costs. Finally, investors get up to $1,000 for allowing a total of up to $3,000 in short sale proceeds to be distributed to subordinate lien holders (on a one-for-three matching basis).
In simpler terms, the HAFA program works through the lender. They receive a financial incentive to participate, and the borrower receiveds a financial incentive to take advantage of the option. Although it sounds simple, the program is quite sophisticated and requires patience from both the servicer and the borrower.
CLICK HERE to meet with a certified HAFA Short Sale representative for free!
