On March 9, 2012, another update was made to the HAFA program. There were many changes but the three most impactful and important ones in my opinion are
1. The extension of HAFA to the end of calendar year 2013
2. Increasing the second lien payout to a maximum of $8500
3. Required Credit Bureau Reporting to Code 13 and Code 65
As the San Jose Short Sale Agent, of these three, the one that impacts my clients most is the one dealing with the increased payout of the second lien. Everyone says it is not a big deal, but the reality is that the additional $2500 payout to their second lender is a HUGE deal for folks. The prospect of offering an additional $2500 to get the second to waive their lien in full is a hugely compelling proposition.
According to the Supplemental Directive 12-02 which lay out the particulars of the most recent update, June 1, 2012 is when Servicers are required to implement the changes. With the huge volume of files each lender or servicer is handling right now, it takes time for them to adjust to changes, so it is understandable why the HUD is giving them nearly three months to come up to speed.
So for all the readers out there, as of last Friday, Bank of America and all of the Servicers who have agreed to participate in HAFA are now bumping up their payout to $8500 to second lien holders.
The fantastic news is that these HAFA guidelines will have a trickle-down effect on non-HAFA short sales for those who cannot qualify for HAFA for one reason or another.