2013 is going to be a good year for homeowners needing to short sale their home.
Most all major lenders and servicers have agreed to streamline the short sale process.
Program Updates Effective February 1, 2013
however, Servicers may implement changes immediately
The Home Affordable Foreclosure Alternatives (HAFA) Program is a government-sponsored initiative overseen by the U.S. Treasury Department and administered by Fannie Mae assisting all Home Affordable Modification Program (HAMP)-eligible homeowners in avoiding foreclosure,specifically through short sales or deeds-in-lieu of foreclosure.
BEFORE Feb. 1, 2013
AFTER Feb. 1, 2013
|Required Documents||Use of Short Sale Agreement and Request for Short Sale Approval or forms substantially similar in content are required||Use of Short Sale Agreement and Request for Short Sale Approval documents optional|
|The Short Sale Notice (SSN) and the Acknowledgement of Request for Short Sale (ARSS) are now the preferred forms for servicers with regards to HAFA Short Sales. The Deed-in-Lieu (DIL) Agreement is now optional, and the Request for Approval of Short Sale (RASS) and Alternative Request for Approval of Short Sale (Alt RASS) are being phased out.|
|Response Time||Servicers required to respond within 45 days||Servicers required to respond within 30 days|
|The time frame for servicers to respond to a borrower’s request for a short sale has been shortened from 45 calendar days to 30 calendar days (generally).|
|Pre-Determined Hardship & Affidavit||Affidavit of borrower hardship required for approval of HAFA short sale||Pre-determined hardship (90+ days delinquent and FICO below 620) with affidavit required|
|Borrowers who are 90 days or more delinquent and have a FICO score that is less than 620 will be deemed to have a “pre-determined” hardship. Servicers do not need to further validate the hardship to approve the HAFA short sale. However, they must execute a Hardship Affidavit prior to closing.|
|Short Sale Affidavit||
No arms-length transaction orHUD-1 affidavit required
New HAFA Affidavit to be completed at closing
|A new HAFA Affidavit is now required, while both the borrower and the buyer must sign. This affidavit certifies the sale is an arm’s-length transaction (the homeownerand buyer have no previous connection to one another), that no money is beinggiven or received outside of the HUD 1, and other necessary information.|
|Subordinate LienholderPayoff||Treasury contribution to subordinate lienpayoff $2,000||Treasury contribution to subordinate lienpayoff increased—up to $5,000|
|The Department of the Treasury will now provide up to $5,000 as an incentive to payoff secondary lienholders.|
|No resale before 90 days||
Resale after 30 days allowed
|The current restriction on reselling a property within 90 days after closing is being shortened to 30 days. From 31 to 90 days, the resale price cannot exceed 120% ofthe HAFA short sale price.|