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BOA HAFA Short Sale - Too Good To Be True?

Licensed Real Estate Agent

Sarasota, FL

March 23, 2011

Is a BOA HAFA too good to be true?

Property owner (on one of my listings on which I just submitted all paperwork to our short negotiator) called me today to report she qualifies for BOA HAFA.

I have not had a HAFA short sale.

I know nothing of the reality of HAFA through BOA (in Florida).

So, I'm asking you to hit me with a heavy dose of reality - is BOA HAFA too good to be true?

BOA shared the following with my customer: "If accepted you will not be responsible for the difference of the loan and will not be asked to sign a promissory note for any amount of money if the short sale offer is accepted. Someone from the HAFA program will contact you in the next 5 days and you will know within 1 to 3 weeks if you have been accepted for this program."

As reported, BOA HAFA claims the following:

You may be eligible for the Home Affordable Foreclosure Alternatives program if:

the property is your current principal residence, OR the property has been vacant or rented out for less than 12 months, and you have not bought another principal residence during that time.

the amount you owe on your first mortgage for your property is equal to or less than:

  • $729,750 for 1 unit
  • $934,200 for 2 units
  • $1,129,250 for 3 units
  • $1,403,400 for 4 units

you owe more on your home than it's worth

your current mortgage was taken out on or before January 1, 2009

you are experiencing a hardship (such as a job loss, divorce or medical emergency) and are unable to afford your current home loan

Okay, I'm sitting down and ready for your reality check. <sigh> Would you hold it against me if I admit I want to believe in the Tooth Fairy and that there really can be at least one "easier" short sale?

Thank you,


Sarasota Foreclosures

San Diego, CA

March 23, 2011

Mike, this is all correct. I've closed many HAFA short sales and all my sellers have gotten the $3K relocation assistance incentive at closing too. I have two in escrow approved under HAFA as we speak.

Licensed Real Estate Broker

Pleasant Hill, CA

March 23, 2011

Sure will be interesting to hear Mike's final verdict, as my experience with B of A HAFA deals has been nightmarish. I have 3 with them w/ 2 different outsourcers.

Overinflated value on one, 7 months on the other.... still no agreement yet we've been told for 3 weeks its approved but waiting for B of A to do a task in equator...

I can't understand why we can have such different experiences....

San Diego, CA

March 23, 2011

Catherine ~ knock on wood .... so far so good for me, however, I'm beginning to see the 3rd party outsourcers not perform to level. On one of my files, it was approved by the underwriter in 3 weeks and I spoke to the underwriter myself several times while she was underwriting it, but it took the department that generates the written approval / HAFA documents one month to send the darn package out out to my seller. We just got it yesterday via FedEx.

Licensed Real Estate Agent

Portland, OR

March 24, 2011

You need to 1st make sure any Jr. Lien holders will agree or else you will wait your time.

HAFA can work out well in many cases but if Jr. Lien Holders will not agree you are spinning your wheels and wasting valuable time.

Also, I do not use their pricing but rather list the property at market under a normal short sale and will then look at HAFA. I have heard as well as experienced over pricing with HAFA Short sales and in my experience, you know market price for the property and should follow that with your listing. If you get an offer, B of A can transfer the transaction to their HAFA Short Sale Dept from the traditional short sale dept so don't hold up doing anythng you normally would.. waiting for them.

Licensed Real Estate Agent

Ontario, CA

March 24, 2011

I'm with Catherine HAFA will drag out short sales. You should know the difference in the process when you have an offer against the seller being qualified prior to getting an offer. RASS is when the seller is approved prior to you receiving have an offer or even listing the property and then the process is driven by the marketing of the property with the value determined by the lender and then dictating to the agent to sell at that price. Most of these values will be inflated. If after 21 days you don't have an offer, you may request for a listing price reduction, The problem is if you do receive what may be a good offer prior to the price reduction but the net proceeds are less then they approved, you must wait until you get another price reduction. ARASS is when you submit an offer and then the seller request HAFA qualification. Then the process is driven by the offer. They will order an appraisal but they do not dictate the listing price or net proceeds. It is similar to a regular process, except it will take more time, up to additional 30 days, as the outsource vendor must let the lender know that the seller has been approved and then it goes back to a negotiator to review the offer and give approval.

Licensed Real Estate Agent

Portland, OR

March 25, 2011

HAFA works much better if there is either just 1 loan or if more than one, both are with the same lender/servicer. However, I still list the property competitively and once I have an offer, submit it as a normal short sale.

At the same time, if there is a 2nd, I am all over it trying to determine of they will comply with HAFA rules. If they will, I will push to have the 1st move it to HAFA but if they won't, I let the borrower and 1st know right away.

I also suggest agents whenever possible meet whoever is doing the BPO and have any additional information about the property which could affect value ready to hand them.. including bids if serious repairs are needed on the property.

Depending on your state, HAFA gives protection language to a seller and also offers relocation assistance so it should be used if your clients qualify. It also gives them the ability to stay in the home if at all possible. Every situation could be different but remember, keeping homeowners in a home whenever possible is the right thing to do and if HAFA will do it in some cases, its what we need to do. I just had one where they were able to stay in the home and it was a great feeling knowing they did not have to move out. They also are future clients and know people who will need real estate services in the future.

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