You're Oahu & Maui Real Estate Professional: HAFA! The Government's Way to Expedite the Short Sale Process. Is it a Reality or a Myth?

HAFA! The Government's Way to Expedite the Short Sale Process. Is it a Reality or a Myth? If any of you have done Short Sales and was looking for a way to make the Short Sale process quicker and less frustrating and worrisome, you were probably like me.  Excited about the HAFA program.  The HAFA program promised, among many things, the following:

•1.       An approved asking price prior to listing the property

•2.       Faster process in getting approval on an offer

•3.       Possibility of the owner not having to make any loan payments during the Short Sale Process

•4.       Not have to worry about the property being foreclosed on during the Short Sale Process

•5.       $3,000 to seller at closing

Back in July a friend contacted me and asked that I assist her in listing her home as a short sale.  She had been working on a loan modification but realized that even with a loan modification they would not be able to keep their home.  I met with her and told her about the new HAFA Short Sale program.  I explained to her all the benefits of a HAFA program. She was excited and we went to work.

I was excited because I thought I would have something great to blog about - - HAFA promised quick responses.  I could do weekly blogs on the process.  Seeing that this is December and I started in July and this is my first blog, should give you an idea that things have not worked as promised.

I have broken down my experience in several blogs.  Kind of like a TV show that ends with, "Tune in Tomorrow Night for the Continuation."  Here is Part 1:

July 21, 2010: Called B of A with homeowner notifying them that the homeowner would like to take part in HAFA program and list their property for sale.  After verifying a few things, B of A representative tells me and homeowner that she qualifies for the HAFA Program.  (Allright!!  We are on our way!) We were told we need to fax over the third party authorization and fax over a notice stating that the homeowner wants to cancel the loan modification.  We are told to all back in a week to make sure the loan modification was canceled. With smiles on our faces, we eagerly faxed over the necessary documents.

July 29, 2010: Called B of A Loan Retention. Third Party Authorization not showing up.  Transferred to Customer Service. They don't have Third Party Authorization in their system either.  Told to check later. (Hum, sounds familiar.)

August 9, 2010: Short Sale Dept. has Authorization and indicates the loan modification has been cancelled.  Suggested we contact HAFA program immediately.  HAFA Department says that even though I have a Third Party Authorization, they will not start the HAFA program unless they talk to the homeowner directly and hear it in her own words that she wants to be in the HAFA Program.  Cannot be handwritten.  Has to be a by phone. (Strange.  Okay.  Whatever!)

August 10, 2010: Homeowner calls HAFA Department.  We are instructed to upload all tax returns, financial info, hardship letter, etc. in Equator System.  I asked how long it will take to get a suggested list price.  Instructed that it will take about 30 days but to go ahead and list the property at a price that I believe is appropriate and see if we get an offer in the meantime.

September 3, 2010: Called HAFA Department to find out status.  They can't find documents.  Oh, wait, did find documents in Equator System but want me to upload them in Equator again and fax them as well. (Done)

•-          - - Thought this may be a good time to blog about my experience.  But I really didn't have any answers from B of A or the HAFA Department. Decided not to blog until I really had something to share with everyone.

September 9, 2010: Got offer.  Called HAFA Department.  HAFA tells me to hang on and that the homeowner is "not" approved for HAFA Program.  I told them that on July 21^st, we were told that homeowner is "approved" for the HAFA Program.  Representative informs me that all the documents have to go through B of A Underwriting and it should take 2 weeks to be Approved. (I thought the great thing about the HAFA Program, was that we don't have to do the B of A waiting game - - not true.)  Told not to submit offer or Homeowner will be "kicked out" of the HAFA program.  (Just want to remind everyone that I still do not have a suggested price either.)

September 21, 2010: Called HAFA Department. They will be expediting file for review because it is taking too long.  (Oh no!  I've heard this before in a "regular" Short Sale.  Anyone that has done a Short Sale knows that "expediting" really doesn't mean anything.  It's just a way to get you off of their backs.)

September 28, 2010: Called HAFA Department.  Still under review.

October 6, 2010:  Called Short Sale Department.  HAFA is APPROVED!!!  Asked if I can submit offers now.  No.  I have to wait until the appraisal is in.  They also informed me that the homeowner should be receiving confirmation that the she has been approved for the HAFA program in a few weeks.

October 8, 2010: An appraiser called and he came to house to do the appraisal.

October 18, 2010: Still in underwriting stage with B of A.  B of A says that they have not received the Appraisal.  I told them that in the Equator System, the negotiator is Anthony Falzano and that I have emailed him several times with no response.  I am told that Anthony does not exist.  That if a file has not been assigned to a Negotiator, the system shows Anthony as the Negotiator. (Wow!!)

Recap: July to October equals 3 months into process.  Still no suggested list price. Still cannot submit offers.

To be continued . . .

Karla Casey is Principal Broker of Casey & Associates
located in Honolulu, Hawaii
For more information on her and real estate in Honolulu or Maui go to www.CaseyHawaii.com