HAFA… you heard me talk about it before A year ago, the day it was announced. The same day I said it would not work. There there was nothing in it that was realistically going to make a change.
In October of this year I reported that only 342 HAFA short sales had been closed in the first six months of the program. Not exactly stellar results or a game changer for the short sale industry as some “experts” and NAR claimed it would be.
Now there are new changes to the HAFA program.
The first change to the HAFA program is servicers are no longer required to verify a borrower’s financial information to determine if their debt-to-income ration exceeds the 31%. This sounds great on paper, but most of the homeowners who are looking for a short sale I have seen already had debt-to-income rations above 31%.
As far as the second-lien goes, there was a change there too. Originally the second-lien investor had to agree to accept 6% of the unpaid balance owed to them up to $6,000. The new guidelines eliminates the 6%, but still keeps the $6,000 cap. This could actually help a little, but I don’t think it is going to make much of a change. Many of the second’s are still not going to agree to this unless the same investor owns both liens.
So with these changes again I give them credit for trying, but if the government really wants to make programs work they are going to have to get those who are in the trenches involved in suggesting changes.
I don’t expect much of a change in the HAFA program. The approval rate may go up 100%, but that is still going to be a tiny percentage of all short sales that get approved. Sorry Alex and NAR, this is still not a game changer.
Hi, Dean. Nice overview of the ‘new guidelines’. The real winners with this program are companies selling HAFA certification modules ;-)
Melissa thanks. I know really. Everytime I see classes from title companies for $25 on how to get your hafa deal approved I laugh. And the CDPE calling this a game changer just shows that he has no clue what the real world is like. I wish I could make up a designation on something I dont understand and make millions off it. Afterall having closed ZERO short sales and calling yourself an expert and developing a designation is complete bs and I wish NAR would have called him out on it. Oh wait, NAR was a big believer that this was a game changer too.
If legislators want to make real change they need to get the likes of you, Trent Chapman, Kevin Kauffman and Bryant Tutas in a room and talk ideas.
Hey Dean. Agreed that HAFA isn’t going anwhere until any Jr. liens are forced to play on the same court. However, giving some latitude on the vacancy vs. occupancy rule will save a few HAFA deals and prevent the short sellers from “having to hold down the fort” until the nth hour when the bank decides to do one last drive-by occupancy check.