HAFA has been out for only a few short weeks, and already the feedback is piling in.
Most of it? Not so positive.
I posted our article, “The HAFA Program is a Bunch of Crap” on LinkedIn group, FSSA (Foreclosure and Short Sale Agents), to see what short sale agents who are working with the HAFA program are saying about it.
Here are some of the comments so far from Help You Short Sell, Inc., they has very revealing and interesting comments about their experience to date with the program:
So we had our first 2 HAFA tragedies (I am going to repost this, I think everyone needs to read it) Come to find out, not as cut and dry as you would think. Here is what went down on the 1st one:
2 liens, we had gotten the 1st to give the 2nd lien 29k to settle their balance (roughly 10%….obviously happy 2nd, 1st was upset but wanted to move it after us riding them for the last 17 days on it) so we are doing good and happy to get this one over to closing. 1st lien calls on Wed (4/7/10) and says “Sorry this is a HAFA loan, we can only give the junior a maximum of 6k, tell them to take it”. Went to 2nd, and low and behold the response from them was less than civil. Luckily for us, we work with the upper brass at the 1st, explained the situation to the head of all liquidations for them (REO’s and SS/Pre-foreclosure) and he straightened it out. Obviously we are happy that we were able to straighten it out (so are the realtor, buyer and seller) but this shouldn’t happen.
Number 2: Got a Realtor that we work with a lot, she sent us a file, says it’s a HAFA just waiting on the SSA from the servicer, I told her why don’t you list it right now rather than waiting and she obliged. The SSA came from the bank (they will remain nameless for the moment) but come to find out, the investor who backs this loan has stated that the price for this home will be 132k with 2% total commission (really….I kid you not). We went to the head at that bank as well and are waiting their response….I honestly believe we can get them to bend, I guess their logic is, the Realtor/3rd party such as us doesn’t have to do any work (Really??? 54 pages of docs filled out plus listing agreement, financials, hardship, contract, HUD prequal on top of that? We are doing more work than ever on these stupid HAFA short sales). Anyways had to vent on it and share the experiences…if any Realtors want help with HAFA short sales, feel free to send them our way (we have several of the lenders straightened out on theirs).
Oh and just one last FYI…talked to a very high ranking person at a top 5 servicer, only .3% (that’s point 3%) of their loans qualify…told me it will be business as usual. We are doing the best we can right now with all of ours (we only have about 22 HAFA ones, the other 99% of our pipeline is “standard” short sales) and the funny thing is…our “standard” short sales are done in about 5-45 days (as we can use our connections) while the HAFA ones are being quoted as 60-90 days right now (haven’t experimented with the upper brass at the 20 largest servicers yet on this program except for the problem children).
A follow on post:
… look at our 2 HAFA tragedies above. The program is great that it creates awareness for delinquent borrowers, however it will fall far short of what the hopes are for it, just like HAMP has.
In addition, the other GSE investors (Fannie, Freddie) have the option to put their own systems in place for it. As it stands right now with Fannie Mae implementing the HAMP/HAFA program nationwide and Freddie Mac having to audit all the information, they don’t have the time nor the resources to implement their own form of it. Also, they were suppossed to do a “streamlined pre-approved” short sale program (under merely their option) in Phoenix and Orlando last year and they still haven’t done it.
Our loan that fell apart was the commission one. We have been doing this long enough to know that no agent is going to work for 2% total commission (oh yeah split that with the co-op agent as well) on a 120k house.
And one last post for now:
.. here is what we received from the heads of the banks in regards to HAFA.
Most servicers are participating in the program, just because they are doing this, doesn’t mean the investor that they are servicing the loan for is participating in the program. On top of that, the investor doesn’t have to go all in with the program (this is called their “contractual restricitions” where they can dictate that the net must meet all their guidelines (I.E. no more that 8% total closing costs (commissions, settlement, SPCC, HOA, etc).
In this case, the investor ultimately holds the trump card, not the bank. The investor gets to play by some, all or none of the rules and can say “2% total commission, NO HOA fees, no taxes, 5k contribution due to credit/lack of hardship”. Essentially, while the plan makes it sound exciting, it hasn’t really chnanged anything (I have actually seen decreases in our short sale turn times because the banks are having to implement pages upon pages of documentation).
Very interesting and enlightening information so far, but for the most part as we predicted here. Additional paperwork on top of an onerous process has made it actually slightly more difficult, in some cases. Not going “All In” on the program is also something we discussed here, since the HAFA program is guidelines only, servicers are selectively picking how to comply and “how much” to comply.
Volume? Relatively small, right now. This particular poster mentioned 1/3 of 1. That’s pretty small.
What is your anecdotal experience to date? Visit LinkedIn’s group up above or post up in the comments here and share your opinions!
