More bad news for HAFA short sale program for Massachusetts and New Hampshire Homeowners
I have made it clear I am NOT a fan of HAFA. Since its inception, it has been plagued with issues. I have a homeowner we are currently working within New Hampshire who really wanted to try for a HAFA short sale, so we went to work. This short sale was serviced by Chase. I was fairly impressed with how quickly we did get a negotiator assigned, but ALAS we had issues from the point of the valuation.
First, the valuator got out of the back seat of a car, didn’t shake the listing agent’s hand, nor introduce herself. She ran in and out of the property and “took pictures” – Now on the phone this valuator told the listing agent she had TEN YEARS experience. When the listing agent met her, he said she couldn’t have been more than 22-23 years old. So I’m sure you can deduce what transpired. YES, our valuation came in at LEAST $50,000 over offer price.
I knew it would be an uphill battle.
We explained our concerns to Chase, who didn’t seem concerned in the least. The buyers got an appraisal that came back even LOWER than their offer price. Thankfully they were cash buyers. We submitted the appraisal and still, the negotiator was unmoved.
I called in and spoke with a gentleman in the short sale department who in no uncertain terms explained if the homeowners did a HAFA short sale, they would only consider an offer $10,000 ABOVE list price!!!
We are NOW battling this valuation more by providing 3 comps and a map with a radius around the surrounding property.
The Treasury Department is considering MORE changes to the Home Affordable Foreclosure Alternatives (HAFA) program in order to boost short sales and deeds-in-lieu of foreclosure. They are looking at making minor changes, but nothing has been finalized yet.
This would be the SECOND revamp of the failed program. Changes this year include servicers not needing to verify a borrower’s financial information (talk about opening the doors for strategic default) or determine if the borrower’s total monthly mortgage payment exceeds a 31% debt-to-income ratio.
HAFA servicers initiated 17,781 short sales and completed 8,541 through May this year throughout the country. The 8,541 is a big increase over the 342 completed by last fall but is only a blip on the radar when you compare it to the 113,000 TRADITIONAL short sales completed through April by the top 10 servicers.
What I find disturbing about the numbers is the treasury’s failure to break out the deed in lieu of the actual completed short sales. The 8,541 number is NOT representative of successful completed short sales.
HAFA does have some benefits, but when you risk having to deed the house back, I do not see the benefits outweigh the risk.