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2011-05-06 13:50:37
Utah HAFA & Traditional Short Sale Flow Charts and

 

We get a lot of questions about the processes involved in a Utah short sale and the work flow involved. There are several different short sale programs available. Most home owners in Utah qualify for a traditional short sale. However, depending on the utah homeowner's loan type and personal situation, there is also a HAFA short sale program and HUD 'pre-foreclosure program.' The HUD 'pre-foreclosure program' is for borrowers who have HUD backed or HUD insured loans such as FHA Loans or loans through the Utah Housing Corporation. The HAFA short sale program is a government encoraged program that offers benfites to both lenders and borrowers. The most notable benefit to the borrower, if they qualify is a $3000 seller incentive at closing. The only catch is that there are certain elegibility requirements to qualify for the HAFA short sale program such as:

A mortgage loan meets the basic eligibility criteria for HAFA if all of the following are true statements:

  • The loan was for the principal residence of the borrower.
  • The loan was a first lien mortgage originated on or before January 1, 2009.
  • The mortgage is delinquent, or default is reasonably foreseeable.
  • The unpaid principal balance on the loan is no more than $729,750 for a single-family property, $934,200 for a dual-unit property, $1,129,250 for a three-unit property, or $1,403,400 for a four-unit property.
  • The total monthly payment on the mortgage (including principal, interest, property taxes, hazard and flood insurance, condominium association fees, homeowner’s association fees, and any escrow payment shortage amounts subject to a repayment plan) is more than 31% of the gross income of all borrowers on that mortgage.
  • The loan servicer has already considered the borrower for a HAMP loan modification, and one of the following conditions applies:
    • The borrower does not qualify for a Trial Period Plan.
    • The borrower does not successfully complete a Trial Period Plan.
    • The borrower is delinquent on a HAMP modification by missing at least two consecutive payments.
    • The borrower requests a short sale or a deed-in-lieu.

Use of the term “borrower” means all borrowers on the mortgage in question.

HAMP-eligible borrowers must be considered for HAFA within 30 days of either the termination of the HAMP agreement or the request for either a short sale or a deed-in-lieu.

Every potentially eligible borrower must be considered for HAFA before the borrower’s loan is referred to foreclosure or the servicer allows a pending foreclosure sale to be conducted.

Loan servicers retain the right to accept or deny a HAFA application based on external factors, such as the severity of the loss involved, local market conditions, the timing of pending foreclosure actions, and borrower motivation and cooperation.

If you don't meet these eligility requirements don't panic, that's where a traditional short sale comes into play.

Below are work flow charts for the traditional utah short sale and the HAFA short sale. The HUD 'pre-foreclosure' program short sale follows a similar flow to the HAFA short sale.  To find out all of your options and get straight forward answers call our loss mitigation team today at 801-971-2542. Our loss mitigation services are always free!

Traditional Short Sale Process Flow Chart

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Traditional Flow Chart

 

HAFA Short Sale Process Flow Chart

Download PDF

HAFA Flow Chart

 
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