Fannie Mae Announces HAFA Program
By Deanne M. Rymarowicz, Esq.
GLVAR Legal Counsel
On June 1, 2010, Fannie Mae introduced its own Home Affordable Foreclosure Alternatives (HAFA) Program, which, like the HAFA program issued by the U.S. Treasury, is designed to mitigate the impact of foreclosures on borrowers who are eligible for a loan modification under the Home Affordable Modification Program (HAMP) but ultimately did not complete a modification.
Program Features
- The Fannie Mae Home Affordable Foreclosure Alternatives (HAFA) program simplifies and streamlines the use of short or “preforeclosure” sale and deed-in-lieu of foreclosure (DIL) options by incorporating the following unique features:
- Complements HAMP by providing alternatives for borrowers who are HAMP eligible (including borrowers facing imminent default);
- Utilizes verified borrower financial and hardship information collected in conjunction with HAMP, eliminating the need for additional eligibility analysis;
- Allows the borrower to receive pre-approved short sale terms prior to the property listing;
- Prohibits the servicer from requiring, as a condition of approving the short sale, a reduction in the real estate commission agreed upon in the listing agreement;
- Releases the successful HAFA borrower from future liability for the debt;
- Uses standard processes, documents, and timeframes; and
- Provides financial incentives to borrowers, servicers and subordinate lienholders.
The effective date for the implementation of the Fannie Mae HAFA is August 1, 2010; however, servicers are encouraged to adapt their processes to implement these policies and procedures immediately.
Complete program details for the Fannie Mae HAFA can be found here. Additionally, new servicer and borrower materials have been developed to support and facilitate the implementation of the program. All materials – including a program overview and job aid, as well as the required borrower documentation – are available on the new HAFA page on eFannieMae.com. |
