Bank of America Implements HAFA on Equator for Short Sales

I will be the first to step out on a limb and say that Bank of America short sales are getting better…significantly better. Bank of America has long has issues with their short sale process. I have personally heard from hundreds of frustrated buyers, sellers and Realtors across the country about the dismal record Bank of America has had with short sales.  My Bank of America Short Sale Blog posts continue to be the number one visited and most commented posts on my blog:

Bank of America formerly Countrywide New Short Sale Policies and Guidelines

Bank of America formerly Countrywide NEW NEW Short Sale Process…REOTrans.com

Bank of America and Equator (Formerly REOTrans)…Short Sale Nirvana?

It has been a long 6 months since the launch of the Bank of America and Equator short sale platform. Both Bank of America and Equator spent millions of dollars to develop a customized short sale system to handle the hundreds of thousands of Bank of America short sales. The learning curve has been steep, but we have seen significant changes with Bank of America and Equator…positive changes. All of our Bank of America short sales have been put into the Equator system and all of the files are moving through the system fairly efficiently. Click here to view a detailed Bank of America and Equator short sale training guide.

Equator Short Sale Training Guide

Equator Short Sale FAQ

I just received and email from Equator stating that ALL Bank of America Short sale are now required to go through Equator. Additionally, Bank of America will be participating in the Home Affordable Foreclosure Alternative HAFA program. This is exciting news and we are very optimistic that Bank of America will put the right foot forward and turn their disastrous history with short sales around.

Bank of America's HAFA Program Website gives homeowner's details on their support of the program.

Below is a copy of an email that I received on Friday from Equator.


Bank of America Home Loans will now be using Equator as the primary tool for short sales.  It is a self service portal that automates the short sale process.  This will streamline the process and improve the experience for both customer and real estate agents.

 

As a result, Bank of America will no longer be accepting faxed short sale documents, effective immediately you will need to upload those documents through Equator. Information to assist you with the Equator system can be found at www.bankofamerica.reo.com/shortsaletraining.

 

Once a short sale is initiated on a Bank of America loan, you can also access the educational guide within Equator.  It can be found within the "Upload 3rd Party Authorization" task.  This guide provides tips for avoiding delays and navigating system functionality.

 

To start a short sale today, go to www.Equator.com/

 

REMINDER: The federal government recently announced the short sale program guidelines for the Home Affordable Foreclosure Alternatives (HAFA) program which will go into effect on Monday, April 5, 2010.  Bank of America Home Loans is implementing HAFA, the program designed to help those customers who were not eligible for the Home Affordable Modification Program (HAMP) or any other modification.  For more detailed information on the HAFA program, go to the National Association of Realtors site at www.realtor.org/government_affairs/short_sales_hafa.

 

Questions?  Please call the Bank of America Home Loans Short Sale team at 1.866.880.1232

Home Affordable Foreclosure Alternatives Program HAFA Begins Today

UPDATE: HAFA – Home Affordable Foreclosure Alternatives Program Detailed FAQ sheet

"Let the Games begin" may be an appropriate launch slogan for the much anticipated Home Affordable Foreclosure Alternatives Program called  HAFA that officially launched on April 5th, 2010. This program, initially outlined in late 2009, is designed to streamline and simplify the short sale process. HAFA is also a response to the failed program called HAMP or Home Affordable Modification Program in which many homeowners in distress could not qualify for HAMP and thus became a dismal failure. The creation of HAFA appears to have risen like a Phoenix from the flames of the HAMP disaster.

Effective today, the short sale process is simplified…well we sure hope so. The only problem: Many lenders don’t know it, and Realtors may have to convince them. As an example, Bank of America began processing all of their short sales through the Equator Platform in October of 2009. Five months later and endless hours of frustration with Bank of America's lack of knowledge about the Equator system…the new system is finally getting legs and short sales are processing quickly.

The Home Affordable Foreclosure Alternatives (HAFA) program gives $3,000 to borrowers for relocation assistance, $1,500 to servicers for administrative and processing costs, and up to $2,000 to investors who allow up to $6,000 in short sale proceeds to be distributed to subordinate lien holders. The program was created to help stabilize distressed inventory such as underwater homes.

Some lenders have already adopted HAFA rules, but April 5 was the deadline for participating servicers to implement HAFA. The program reportedly covers servicers handling more than 90 percent of all mortgages.

However, the National Association of Realtors (NAR) says that it’s already hearing complaints from members. Many servicers say they haven’t even heard about the program, Realtors claim, so it’s clear that they won’t “hit the ground running.”

Team Baranowski will carefully monitor HAFA implementation and report any new details on the program.

Home Affordable Foreclosure Alternative Program (HAFA) Summary

The program’s official name is the Home Affordable Foreclosure Alternatives Program (HAFA), and it’s part of an existing initiative, the Home Affordable Modification Program (HAMP). HAFA applies to loans not owned or guaranteed by Fannie Mae or Freddie Mac, which cover over half of all U.S. mortgages; however, Fannie and Freddie will issue their own versions of HAFA in coming weeks.

While HAFA’s goal is simple – increase the number of short sales and “deeds in lieu of foreclosure” by simplifying the process – the rules are complex, and it comes with 43 pages of guidelines and forms. Among other things, HAFA:

• Allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).

• Prohibits servicers from requiring a reduction in the real estate commission agreed upon in the listing agreement (up to 6 percent).

• Requires borrowers to be fully released from future liability for the first mortgage debt (no cash contribution, promissory note, or deficiency judgment is allowed.)

• Provides financial incentives: $1,500 for borrower relocation assistance; $1,000 for servicers to cover administrative and processing costs; and up to $1,000 for investors.

The program does not take effect until April 5, 2010, but servicers may implement it before then if they meet certain requirements. The program sunsets on Dec. 31, 2012.

Read the HAMP NEWS RELEASE

Read the complete 43 page SHORT SALE GUIDELINES

If you are a troubled homeowner, or have a family member or friend facing foreclosure, please give us a call for a confidential consultation about the possibility of a short sale.  Call Craig Baranowski at 850.259.1788 or email  us @ info@teambaranowski.com. Team Baranowski has a 100% success rate for all of our short sales for 2009!

This site, Craig Baranowski or Keller Williams Realty is not providing legal or tax advice. The information provided is for educational and informational purposes only. It is recommended that sellers considering a short sale should consult an independent legal and tax adviser for more information.

New Short Sale Guidelines Encourage Sweeping Changes to Short Sale Process

It has been a very long year fighting everyday to save homeowners from foreclosure. It is a daily challenge to push short sales efficiently and effectively through the short sale process. I have been actively involved in national short sale advocacy groups and we have been demanding changes to a broken short sale process. Two years ago when we started our first short sales, it was a difficult path of paving a road never traveled. As short sales become more prominent we saw changes and guidelines help streamline and encourage lenders to participate in foreclosure prevention programs under the Making Home Affordable Program or Home Affordable Alternatives Program (HAFA). These programs encouraged mortgage modifications and offered some incentives for shorts sales and deed in lieu of foreclosures. However, the program struggled to offer real solutions to an epic problem plaguing our country’s real estate market.

Today’s announcement by the Treasury Department is the next critical and potentially monumental step to making a difference in offering homeowners a real foreclosure alternative. With over 88% of our distressed inventory in Okaloosa, Walton and Bay County being short sales…this is a very significant and much needed change…or as I would call it the necessary lifeline to get through this current real estate crisis. The plan is designed to accelerate the necessary agreements between lenders, real estate agents, buyers and sellers.

Here is a quick break down of the new guidelines…will it change short sales overnight? No. But we have yet to see the bulk of short sales and 2010 will be an epic year for short sales and foreclosures!

The program’s official name is the Home Affordable Foreclosure Alternatives Program (HAFA), and it’s part of an existing initiative, the Home Affordable Modification Program (HAMP). HAFA applies to loans not owned or guaranteed by Fannie Mae or Freddie Mac, which cover over half of all U.S. mortgages; however, Fannie and Freddie will issue their own versions of HAFA in coming weeks.

While HAFA’s goal is simple – increase the number of short sales and “deeds in lieu of foreclosure” by simplifying the process – the rules are complex, and it comes with 43 pages of guidelines and forms. Among other things, HAFA:

Allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).

• Prohibits servicers from requiring a reduction in the real estate commission agreed upon in the listing agreement (up to 6 percent).

• Requires borrowers to be fully released from future liability for the first mortgage debt (no cash contribution, promissory note, or deficiency judgment is allowed.)

• Provides financial incentives: $1,500 for borrower relocation assistance; $1,000 for servicers to cover administrative and processing costs; and up to $1,000 for investors.

The program does not take effect until April 5, 2010, but servicers may implement it before then if they meet certain requirements. The program sunsets on Dec. 31, 2012.

To qualify under the new guidelines:

  • The property must be the homeowner’s principal residence.
  • The homeowner is delinquent on the mortgage or default looks likely. Homeowner is insolvent.
  • The loan was made before Jan. 1 this year and is less than $729,750
  • The borrowers’ total monthly mortgage payment exceeds 31 percent of their before-tax income.

Read the HAMP NEWS RELEASE

Read the complete 43 page SHORT SALE GUIDELINES

If you are a troubled homeowner, or have a family member or friend facing foreclosure, please give us a call for a confidential consultation about the possibility of a short sale.  Call Craig Baranowski at 850.259.1788 or email  us @ info@teambaranowski.com. Team Baranowski has a 100% success rate for all of our short sales for 2009!

This site, Craig Baranowski or Keller Williams Realty is not providing legal or tax advice. The information provided is for educational and informational purposes only. It is recommended that sellers considering a short sale should consult an independent legal and tax adviser for more information.