Fannie Mae has made an announcement regarding all loans held in their portfolio. The program is set to take place August 1st, 2010. It is called the Fannie Mae’s Home Affordable Foreclosure Alternatives Program or HAFA for short. HAFA is part of HAMP or Home Affordable Modification Program and provides financial incentives to servicers and borrowers who utilize a short sale or a deed-in-lieu of foreclosure to avoid a foreclosure on an eligible loan under HAMP.
Guidelines Must be Implemented
All servicers must implement Fannie Mae’s HAFA for all conventional mortgage loans that are held in Fannie Mae’s portfolio. Servicers are encouraged to offer HAFA for eligible mortgage loans that are part of a regular servicing option MBS pool or part of a shared-risk special servicing option MBS pool for which the servicer’s shared risk liability has not expired. If a servicer decides to use HAFA for such mortgage loans, the servicer must follow the Treasury’s HAFA Program, obtain any necessary third-party approvals, and comply with the reporting requirements of this Announcement. Fannie Mae is not responsible for any losses or expenses the servicer incurs and will not pay borrower or servicer incentive fees for those mortgage loans which are not considered Fannie Mae HAFA mortgage loans.
August 1st is the Deadline
Servicers are encouraged to adapt their processes to implement these Fannie Mae HAFA policies and procedures immediately; however, servicers are required to implement these policies and procedures no later than August 1, 2010, for borrowers who become eligible for HAFA on or after that date.
Hopefully this new policy will speed up the process of short sales and foreclosures. Many buyer’s have walked away from deals due to the lengthy and frustrating process.