HAFA Short Sale Updates & GMAC Equator Now Processing VA’s

You can view the updates by going here:

https://www.hmpadmin.com/portal/programs/docs/hamp_servicer/sd1108.pdf

On August 9, 2011, a supplemental directive was issued listing more changes to the non-Fannie Mae and non-Freddie Mac HAFA program.

Servicers subject to HAMP under a servicer participation agreement (SPA) must consider borrowers for HAFA.  While each servicer can use their own discretion in determining eligibility criteria and rules, they must now publish their unique HAFA policy rules and components to their website using a HAFA matrix developed by the Treasury.  No later than October 15, 2011, each servicer must post their matrix to their website and notify the program administrator (Fannie Mae) of the web address where their completed matrix can be located.

Also effective on or before October 15, 2011, servicers must develop and implement procedures for re-evaluating property values if there is a discrepancy between the servicer’s independent BPO and market value data provided by the borrower or their real estate broker.  The servicer is required to publish these procedures in their HAFA matrix.  If a new value is determined to be less than the original value, the servicer must notify the borrower and/or their real estate broker in writing or verbally of the new value, the new list price, and the new acceptable sales proceeds required.  The servicer is required to accept a purchase offer when the net sales proceeds are equal to or exceed the minimum acceptable net proceeds determined by the servicer.  However, should a purchase offer result in net proceeds less than that acceptable net proceeds, servicers can accept the purchase offer if they determine the proposed sale is in the best interest of the investor.

Servicer’s are urged to utilize HAFA instead of a proprietary short sale or DIL option unless it is prohibited by the investor’s guidelines.  If the investor prohibits HAFA, the servicer must document the applicable investor restriction or prohibitions in the servicing system and/or mortgage file.

The new directive now provides for a maximum of $6,000 to satisfy subordinate liens secured by a mortgage on the property.  The proceeds given to the subordinate mortgage must be in exchange for a lien release and a full release of the borrower’s liability.  This does not apply to subordinate non-mortgage liens.

The relocation incentive payment of $3,000.00 given to borrowers who successfully qualify for the HAFA program can now be used to pay other transaction costs.  As long as the borrower states their request in writing to the closing agent, they can use their payment toward costs such as legal fees, outstanding utility bills, minor property repairs or other closing costs not covered by the servicer.  The borrower cannot use their incentive funds to pay subordinate mortgage or non-mortgage liens.

Updates on GMAC and Equator:

GMAC is now processing VA short sales through the Equator System. When you initiate a VA short sale with GMAC, a negotiator is assigned to the file.  The negotiator initiates the short sale in Equator and then notifies the short sale facilitator that the file has been set up and requested tasks have been issued.  This expedites the process as you have a single point of contact and the phases of the short sale are organized and monitored through the Equator system.   Previously only Conventional loans could be processed through GMAC’s equator system.