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What In The World Is HAFA??
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A Quick Overview
- Pertains to 1st Lien Non-GSA Mortgages
- Utilizes borrowers financial information through HAMP
- Financial incentives provided to borrowers, servicers and investors
- Sets limits on lender response time
- Lender forfeits ability to pursue deficiency judgment
- Caps claims of subordinate lenders
For more information call Herb your Certified HAFA Specialist at
714-501-0126
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Requirements
Loan is eligible if all of the following conditions are met:
- Property is borrowers principal residence
- Loan is a 1st lien mortgage
- Originated before January 1, 2009
- Mortgage is delinquent or default is reasonably foreseeable
- Current unpaid balance is equal to or less that $729,750
- Borrowers total monthly mortgage payment exceeds 31% of borrowers gross income
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Incentives
- $3,000 to borrowers for relocation costs
- Will be deducted from gross sale proceeds at closing
- $1,500 to servicers for administration and processing fees
- Servicer may not charge borrower any processing fees and MUST pay all out-of-pocket expenses
- $2,000 to investors who allow a total of up to $6,000 in Short Sale proceeds to be distributed to subordinate lien holders on a 1 for 3 matching basis
- Requires all servicers participating in HAMP to implement HAFA in accordance with their own written policy, consistent with investor guidelines, the policy may include factors such as the severity of the potential loss, local markets, timing of pending foreclosure actions, and borrower motivation and cooperation.
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