HAFA NEWS YOU CAN USE

HAFA News You Can Use


With the standard HAFA program getting introduced a few months ago and now Freddie Mac and Fannie Mae introducing their own versions at the start of August, it can be confusing to keep up with all the changes and updates.

From “The Government Goes Media on Foreclosure Alternatives,” this excerpt talks about the possibility of HAFA being more successful than the HAMP program:

The HAMP program has not been a raging success. In fact, nearly 521,000 trial modifications have been cancelled and over 60% of those have been trials for six months or more. Only 398,000 borrowers have been converted from trial loan-mods to permanent workouts. Over 45% of cancelled trials are now in a an alternate modification program offered by the servicers. But, of those, at least 6% are still falling back into a 60+ day delinquency status. There are no official HAFA stats to report, but it should be more successful overall then HAMP.


Or check out this video which detailed the still-evolving HAFA policies in May 2010:


How are Freddie HAFA sales different from the standard program?

Freddie’s program is the allowances to subordinate liens. Each junior lien, in order of priority, may receive no more than 6% of their unpaid principal balance up to an aggregate cap of $6000, in exchange for release of the subordinate liens and satisfaction of the underlying debts. That means that if a home has 2 liens in subordinate position, one is a $210,000 HELOC recorded before a $2700 HOA lien, the HELOC will only get $6000 and the HOA nothing.

Freddie Mac will accept the short-sale minimum acceptable net proceeds in satisfaction of the amount owed under the note and release of its lien
Freddie Mac will not require promissory notes or cash contributions from the borrower by Subordinate lienholders must also agree to release all liens without promissory notes or contributions from the borrower in order for the borrower to close under the program.

Fannie Mae HAFA sales include greater incentives for the servicers, taking the max under the Treasury program at $1500 to $2,200.