Fannie Mae HAFA Program Announced June 1, 2010

Written on June 2, 2010 by Merre Ward

Well, well, well … Fannie Mae is way ahead of the game and put their HAFA Program together and announced the 22 page “Fannie Mae Announcement SVC-2010-07” on June 1, 2010, yet the program is not mandated to be implemented until August 1, 2010.  Servicers are encouraged to implement the Fannie Mae HAFA program earlier than that date.  The Fannie Mae HAFA program sunsets on December 31, 2012, meaning a servicer must receive fully executed required documents before that date to be eligible.

In reviewing the Fannie Mae HAFA servicing guide, many of the guidelines are comparable to the Making Home Affordable HAFA Program for non-GSE servicers, but I did notice there are some huge differences, which include:

• Real estate agents representing the seller/borrower will be held to a much higher accountability standard
• All home retention options must be exhausted
• 60 day rule for properties in active foreclosure
• Servicer must continue to pursue a pending foreclosure while evaluating a borrower’s eligibility
• If in active BK the borrower must be considered for a Fannie Mae HAFA short sale or DIL if requested by borrower, borrower’s legal counsel or BK Trustee
• BPO (Broker Price Opinion) or appraisal information cannot be disclosed to the borrower
• If a borrower enters into a Fannie Mae HAFA short sale agreement of HAFA DIL Agreement after foreclosure proceedings have begun, the servicer must consult with legal counsel to determine if the required monthly payments can be accepted without affecting the pending foreclosure
• Fannie Mae is currently working with mortgage insurers to obtain “delegated authority” to bypass approval by the mortgage insurers

Fannie Mae HAFA Program Summary

The Fannie Mae HAFA program simplifies and streamlines the use of short or “pre-foreclosure” sale and deed-in-lieu of foreclosure (DIL) options by incorporating the following unique features:

• Complements HAMP by providing alternatives for borrowers who are HAMP eligible (including borrowers facing imminent default);
• Utilizes verified borrower financial and hardship information collected in conjunction with HAMP, eliminating the need for additional eligibility analysis;
• Allows the borrower to receive pre-approved short sale terms prior to the property listing;
• Prohibits the servicer from requiring, as a condition of approving the short sale, a reduction in the real estate commission agreed upon in the listing agreement;
• Releases the successful HAFA borrower from future liability for the debt;
• Uses standard processes, documents, and timeframes;
• Provides financial incentives to borrowers, servicers and subordinate lien holders.

Borrower Incentives

• Short sale or DIL – $3,000 to assist with relocation expenses

In most circumstances, the borrower will receive funds at closing of a short sale or within 5 days after the servicer’s acceptance of a DIL, provided the borrower has vacated the property and left it in acceptable condition.

Fore more information, download the FANNIE MAE Servicing Guide Announcement SVC-2010-7.  And of course, if you have any questions or would like to schedule your FREE consultation, please email or call anytime!  We understand and are here to help!

Posted in Fannie Mae HAFA, Foreclosure alternatives, HAFA, HAFA Government Program, Short Sale, Short Sale Rules and Guidelines

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