In Part 1, we discussed the history and development of the HAFA program, and talked about short sales.  As of June, 2012, a new version of this program has come online.  It may be of interest to Oakland and Piedmont residents whom I assist.

THE PROPOSED SOLUTION-NEWER VERSION-If the home involved is financed by Fannie Mae or Freddie Mac, the homeowner will benefit from some new guidelines:

a. Under the new rules, servicers (lenders) will have 30 days to review and respond to all short sale offers or requests.  If they find that they will need more than these 30 days, they must provide the borrower with weekly updates, and furnish a final response within 60 days.

b. During the above 60 days, the lender must tell the borrower whether a short sale will be approved at all, and if so, at what price.

c. If the borrower is working under the government's HAFA (Home Affordable Foreclosure Alternative) program, the time starts when the borrower submits a completed borrower response package requesting consideration of a short sale.

d. If the short sale is not under a government program, the clock starts when the borrower submits a short sale offer from a potential buyer along with a completed borrower response package.

e. Lastly, if the lender makes a counteroffer, the borrower has 5 business days to respond, and the lender must then respond within 10 business days of receiving the borrower's response.

The government, in using a stick and carrot approach to get things moving, says that banks that service Fannie Mae loans are eligible for incentives if they complete foreclosure prevention actions, but they can also face compensatory fees if they fail to contact their borrowers, or fail to pursue foreclosure prevention.

This latest Federal effort to try to get things moving in the housing industry in a more efficient and timely manner, is an attempt to provide troubled homeowners some dependable guidelines. It will remain to be seen how effective it will be.

Posted by Bruce Wagg on


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