Module 6: Buyers, Buyer’s Agents & HAFA

HAFA Significance for Buyers Traditional short sale approval may take long time Buyers back out when wait is too long

HAFA Pre-Approval Attractive HAFA approval or disapproval within 10 Biz days HAFA pre-approved homes more attractive to buyers

Delays Possible If not HAFA pre-approved: –Seller may choose Alt. RASS process –Servicer may solicit seller into HAFA & Alt RASS –Counsel buyer about HAFA pre- approved properties

HAFA Rules for Buyers Arm’s length sale 90 day re-sale restriction Specific wording required in contract

HAFA Rules for Buyers (cont’d) No lease-back or buy- back agreements No money to buyer

With Buyer’s Offer, Submit: All addenda Proof of Funds Financing pre-approval on buyer’s lender’s letterhead 6-7 If all required items are not in original offer, seller might delay accepting the offer to prevent non-compliance with the 3 Day rule for submission of contract to servicer 78

Incomplete Offer Scenarios Seller may reject and another buyer wins the day Submitted, incomplete package rejected by servicer

Closing Dates & Time Frames 45 days begins at contract acceptance days may elapse before servicer approval 6-9 Plan closing date Line up inspections, surveys, etc. 79

Contingencies Standard contingencies acceptable Probable problem contingencies: –Must sell home before closing –Seller pay buyer’s closing costs

Closing Costs SSA indicates costs servicer will pay Ask listing agent

Is Checklist on MLS? Listing agent may have uploaded list of docs & instructions If so, follow it If not, contact listing agent

Meet or Beat List Price? List price is pre-approved Meeting or beating list price almost assures approval

Improve Buyer’s Chances Learn HAFA rules Keep required contract language in word processor or standard addendum

Counsel the Buyer on… Short sale basics HAFA rules Proof of funds and/or financing pre- approval requirements

Counsel the Buyer on… HAFA time lines Likelihood of approval if list price is met Unacceptable contingencies

HAFA Listing Remarks Remarks mentioning HAFA may not mean SSA has been issued Don’t assume HAFA pre-approval Ask listing agent

How Many Liens? One lien easiest Chances of success diminish with more liens

Subordinate Liens Ask listing agent: –How many, including HOA liens? –How much owed? –Status of negotiations?

HAFA Workflow Straight & Fast A few curves Twists & Turns

HAFA Workflow SSA & RASS

Situation #1 Non-HAFA Transactions in Progress Borrower may be offered HAFA opportunity by servicer Seller’s decision 83 Treasury & Fannie Mae Loans 6-22

Situation #1 Non-HAFA Transactions in Progress HAFA not available 83 Freddie Mac Loans 6-23

Situation #2 Property Currently Listed Determine eligibility Request short sale Follow Situation #3 guidelines

Situation #3 Listing Property Today Determine eligibility Request short sale Follow Situation #3 guidelines

HAFA Workflow Alt. RASS

Situation #4 Short Sale Offer Today, Seller Not Pre-Approved Determine eligibility Submit contract with Alt. RASS Follow Situation #4 guidelines (not for Freddie Mac loans)