HAFA program from Bank of America

[Lafi S.]

It seems one of my files is nearing approval with BofA. I just received an email from the negotiator stating that their vendor sent out paperwork for the homeowner to sign up for the HAFA program if he chooses to do so. Does anyone know how this will affect my flip? Should I advise the homeowner to agree to the HAFA program or call in and request not to be a part of it?

Any advice would be appreciated. I am ready to close this and there is a great spread even with the 30 day hold but I am not sure how him signing up for HAFA will affect me....

[Scott Hubbard]

I agree with James. There is much misinformation about HAFA out there most of which is coming from people who listen to a slanted view. Even on BP you will find many of us who have disdain for this program including myself. Take some time to do your own due diligence as you will undoubtedly be faced with the NAR's campaign and their millions of drone's who like nothing more than to simplify the distressed sale process since they are not allowed to stray from the beaten path. NAR, as we speak, are preparing to tell millions of distressed sellers that they now have the tools to assist homeowners to receive a paycheck. Nevermind their national shortsale success rates are around one-third which means they will be forcing taxpayers to flip the bill for billions of dollars of assistance to the banks.

No matter what our personal feelings are, HAFA will no doubt be useful to some borrowers and we should not try to influence their decisions.

A couple of things to point-out:

1. The program is NOT mandatory. If your seller has previously participated in the HAMP program and they do not wish to Participate in the HAFA program, then have them put it into writing opting out of the HAFA program. Provide the letter as part of your short sale submission.

If they did not participate in the HAMP program, it is not a primary residence, or is a Freddie Mac or Fannie Mae loan, then you need not worry about HAFA(although the Freddie Fannie thing could change). I have also been told, but I am not exactly 100% on this one, but if a foreclosure has already been initiated, the lender will not participate in the HAFA program since it has already expensed the foreclosure fees.

2. The program is somewhat open to intrepretation. The HAFA program is a set of guidelines for the lender to qualify for federal aid. The lender themselves will undoubtedly twist the facts to fit their agenda if it benefits them. So, there will be no one size fits all.

3.One thing you should not do, is steer your client away from these programs. Give them the facts, then let them make their own decision.

Good Luck.