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After 40 years in the business, we understand climate change. The business world is constantly moving, and those who can't keep up are at risk of being left behind. That's where we come in. Butler & Hosch is a regional law firm that operates at the speed of business, offering our clients experience, expertise and efficiency - with the ultimate goal of exceeding your business expectations. Want to move forward? Find out more at butlerandhosch.com or contact us at oneroof@butlerandhosch.com PRACTICE AREAS: Foreclosure, Bankruptcy, Litigation, Loss Mitigation, REO, Title, and Eviction SEVEN STATES: Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina and Texas HAFA SHORT SALE CHANGES TAKE EFFECT THIS MONTH Laurie Maggiano, director of policy at Treasury's Homeownership Preservation Office, and Alex Charfen, CEO of the Charfen Institute, took to the Internet in late December to discuss updates to the government's Home Affordable Foreclosure Alternatives Program (HAFA) with industry participants. The new policy changes for HAFA are effective as of February 1, but servicers were able to implement the changes earlier. One of the updates discussed by Maggiano and Charfen during the webinar was the requirement for servicers to make a decision on a borrower's request for a HAFA short sale within 30 days. Prior, servicers had 45 days to return a decision to a borrower. Another update that's expected to speed up the short sale process for certain borrowers is the introduction of a "predetermined hardship." If a borrower is 90 days or more delinquent and has a FICO score that is less than 620, he or she is considered to have a predetermined hardship. According to supplemental directive 12-7, borrowers with a predetermined hardship still 40 must execute a hardship affidavit before closing a HAFA short sale, but servicers do not have to further validate the hardship. The hardship affidavit can be found online at hmpadmin.com. This is government doing what it should be doing—setting standards and letting the private sector take over, according to Maggiano. During the webinar, Maggiano stressed that borrowers who are experiencing a hardship but have a good credit score and are not delinquent can still qualify for a HAFA short sale, but those borrowers will need to explain the nature of their hardship in the affidavit. In addition to helping borrowers who may not be delinquent, HAFA also provides short sales for non-owner occupied properties and offers relocation assistance to any tenants living in the distressed property. Tenants are eligible to receive up to $3,000. HAFA was modified this past June to allow for non-owner occupied properties to be eligible under the program. Another change discussed during the webinar was the requirement that both the seller and buyer execute a new affidavit that affirms the sale butlerandhosch.com MOVING BUSINESS FORWARD. "represents an arm's-length transaction and that no money is being given or received that is not reflected on the HUD-1 Settlement Statement," as stated in the program directive. Treasury is also increasing the reimbursement amount to primary mortgage investors for payments to subordinate lien holders, up to $5,000. Prior to this change, investors were only eligible to receive $2,000. Another policy update aims to prevent short sale fraud. Starting this month, resales cannot occur within 30 days of a HAFA short sale closing. Before the change, resales weren't permitted for 90 days after closing. In addition, under the new HAFA rules, resales for more than 120 percent of the HAFA short sale price are not allowed if they occur between 31 and 90 days of closing. The directive also notes that certain HAFA documents are optional rather than mandatory. For example, servicers are not required to use such forms as SSA, DIL Agreement, Request for Approval of Short Sale (RASS), and Alternative Request for Approval of Short Sale (Alt RASS), according to the directive. The HAFA changes do not apply to mortgages backed by Fannie Mae or Freddie Mac. The GSEs previously announced their own revised short sale guidelines.

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