Happy Birthday, HAFA – Treasury Releases Latest Figures

By
Real Estate Broker Owner with Broadpoint Properties Cal BRE #01324959

 

HAFA ProgramThe Treasury just put out a new report with the latest HAFA and HAMP statistics through February 2011. Personally, I find all of the statistics in these reports extremely interesting for a few different reasons.

For one, HAMP (the Government’s loan modification program) has such a low success rate. To me, all failed modifications are future short sales, (and everyone knows that I love short sales). Second, I constantly hear about HAFA certification programs. Heck, I’m HAFA certified myself. But, what does it mean? Is the certification really worth the cost of the program? Are enough borrowers participating in this program that it makes the certification necessary? (You be the judge. 

In any case, here’s a summary of the good stuff in the Treasury report—in case you do not want to read it from cover to cover (my comments in italics).

 

  • More than 630,000 modifications have been started through HAMP.  (Started doesn’t mean finished, and we all know that the banks are notorious for unsuccessfully pushing paper.)
  • New permanent modifications have averaged 28,000 per month for the last six months. (Check out the re-default rate for permanent modifications.)
  • As of February, 10,177 homeowners have HAFA agreements on the table for short sale or deed-in-lieu of foreclosure. (You may recall that HAFA offers a pre-approved list price for a 120-day period.)
  • 4,488 HAFA transactions have been completed. (This refers to both short sales and deeds-in-lieu of foreclosure.)

 

The report sites the following causes for borrower ineligibility: insufficient documentation, ineligible borrower (not meeting income guidelines), and ineligible mortgage (non-participating investor). You may recall that not only does the servicer need to participate in the program, but the investor note holder needs to participate as well. Additionally, if a property has two liens and the seller wants to participate in HAFA, the second lien holder needs to agree to participate and receive $6000 and release the borrower of any future liability for the debt.

Tomorrow HAFA will have its first birthday. 4,488 successful transactions—that’s just not enough. Some babies can walk and talk by their first birthday and others are not developmentally ready to do so. It seems that HAFA falls into the second group. Maybe HAFA will be further along by the second birthday.

 

Happy Birthday, HAFA!

 

Photo: flickr Creative Commons by renaissancechambara

 

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Comments 4 New Comment

Rainer
75,287
Steve McCoole
Mortgage Alliance Group - San Diego, CA - NMLS#305667

Congress has voted to discontinue HAMP citing its ineffectiveness.  Ombama has said he will veto.

Lack of suffcient documentation from the borrowers has been an issue with all modifications.  The documentation is similar to that of a new loan or refinance.  Interesting how getting together proper documentation if difficult for borrowers when they don't have a loan officer, processor or RE Agent who has a vested interest in the transaction holding their hands throughout the process.

Thanks for the good post Melissa.

April 04, 2011 09:45 AM
Rainmaker
1,146,891
Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents
Put 40 years of experience to work for you
Lyon Real Estate

I think part of the problem is there is much going on between the lines in these HAFA short sale transactions and agents who don't work them don't know how to counsel their sellers to fit those guidelines. As a result, sellers get rejected. I've discovered this because I've recently experienced a huge bump in my approved HAFA short sales since I've figured this out. Now i take on only the sellers who fit the guidelines and, as a result, my HAFA short sales are getting approved. The government makes it very tough to qualify for HAFA.

April 04, 2011 03:40 PM
Rainmaker
958,357
Endre Barath, Jr.
Realtor - Los Angeles Home Sales 310.486.1002
Berkshire Hathaway HomeServices

Unfortunately every time the Government tries to do something Good the Result is the Opposite. When Bureaucrats write the Rules vs experienced business people the result is "red tape" . We need a "red tape removal squad" like on the commercial for South West Airlines...

April 04, 2011 08:02 PM
Rainmaker
267,306
Inna Ivchenko
Los Angeles / Valley Homes
Mannis Real Estate Group

Well, it is Sept/12 and HAFA is still around. Things are changing. In November we are expecting new set of rules. But, it is becoming better, as of March/12 we have 42% of HAFA short sales in Cali~ HAFA will not go anywhere any time soon.

From financialstability.gov:

~ 11 million families in trouble:
• 6 million delinquent or in some stage of foreclosure
• 2.4 million likely HAMP/HAFA eligible 60+ day delinquent loans
• As of 3-30-2012, there are 994,000 active permanent HAMP modifications
• Total U.S. delinquency rate 7%
• Unemployment rate nationwide 8% (nearly 12.5 million Americans unemployed) with California at 11%
• 5.3 million estimated “long-term unemployed”
• There has been a 50%-75% increase in HAFA transactions started over each prior month. Approximately 40,252 completed. (42% in CA)

 

September 16, 2012 01:09 AM
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Melissa Zavala

Broker, Escondido Real Estate, San Diego County
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Broadpoint Properties