Monday, July 9, 2012

Saxon Clueless With Hafa? - Short Sale Classes

In this article we wanted to share some insight into how the HAFA program is being processed by Saxon. When we spoke with Saxon's Short Sale Department, it was clear that the process is still very new to them as they have yet to work through a short sale to closing. What we did gather from Saxon is the current process with closing HAFA transactions. We wouldn't be surprised if Saxon makes changes in the future to improve HAFA transactions.

When the HAFA program kicked in early 2010, many real estate agents were excited to see that some standard processes were put in place to encourage short sales and to help decrease lender response times. As we move through 2010, the real estate industry is yet to see the benefits of HAFA.

1) Initial contact from homeowner - Borrower speaks to the HAFA Short Sale Dept by phone to notify them of wanting to submit a short sale packet via their HAFA program. There is an option to speak with a Saxon Spanish speaking representative as well.

2) Sign Letter of Solicitation - A HAFA Letter of Solicitation is sent to the borrower via US Mail. This letter is to be signed and returned to Saxon via fax or US Mail. If this is not received, the processing of the short sale will not continue.

3) BPO (Broker's Priced Opinion) Completed Saxon will order a BPO and review the report when received to decide how to move forward with the Short Sale. At this point, the BPO value needs to be in line with the purchase offer and if it is not, negotiations will have to occur in order to move the short sale file forward. Send in any market information that supports the purchase offer that was submitted.

4) HAFA Package sent to Borrower Once the BPO is received by Saxon, a HAFA packet is sent to the borrower via US Mail. The borrower completes this paperwork and returns it via US Mail. This paperwork is required to qualify the Borrower under the HAFA program.

At this point, the borrower waits to see if they qualify for the HAFA program. This is important because it will determine the outcome of the approval. Specifically, how much realtor commissions are allowed. HAFA guarantees 6% of commission to the real estate agents and if the short sale is not qualified under HAFA, Saxon may cut this commission down to 5%.

Keep in mind that there is a Short Sale Secrets Department that deals specifically with HAFA transactions and another department that handles non-HAFA transactions. What this means is that there will be different contact numbers to call for status and different negotiators assigned to the file.

If your short sale begins processing with the regular Short Sale Department and it qualifies for HAFA later, it will be moved to the HAFA Short Sale Department and assigned to a new negotiator. If you submitted your short sale file to the HAFA Short Sale Department and it ends up not qualifying for HAFA, it will be moved to the regular Short Sale Department.

In one of our short sale submissions, we had called to verify receipt of a BPO that was ordered by Saxon and they had no updates in their file that a BPO was ever ordered. After some confusion and investigating, Saxon realized that the BPO was ordered via the HAFA Short Sale Department and we had to call a different number for status.

Another item to note is that if you already submitted a short sale via Saxon's non-HAFA Short Sale Department, you can always pursue qualifying for HAFA afterwards and it the file will be moved over to the HAFA Short Sale Department.

If you are unsure whether or not the borrower may qualify for the HAFA program, visit the website If you determine that your borrower would not qualify for the HAFA program, submit your short sale package to Saxon's non-HAFA Short Sale Department. Doing this upfront investigating will help you from wasting time with having your short sale file moved from one department to another and yet waiting for a new negotiator to be assigned.

Chase Unknown to HAFA's Process

In this article we wanted to share some insight into how the HAFA program is being processed by Chase. When we spoke with Chase's Short Sale Department, it was clear that the process is still very new to them and they being that the program is very new, they do not know enough about the program. Chase did not know in too much detail about the HAFA forms Short Sale Agreement (SSA) or the Request for Approval of a Short Sale (RASS).

The standard response from Chase was to visit their website for HAFA information and download the Short Sale Information Packet. After visiting their website, they had no information on HAFA and there was no information on how to qualify for HAFA.

When the HAFA program kicked in early 2010, many real estate agents were excited to see that some standard processes were put in place to encourage short sales and to help decrease lender response times. As we move through 2010, the real estate industry is yet to see the benefits of HAFA. We wouldn't be surprised if Chase makes multiple changes in the future to improve HAFA transactions and we will continue to report any changes that occur.

In order to get better information from Chase with regards to HAFA, we had to contact someone from the executive response team. We were able to gather better information on the process of submitting HAFA short sale transactions.

1) Borrower makes initial contact The borrower must call the HAFA Helpline at 866-326-0086 and request a HAFA Eligibility Letter to be sent to their current mailing address. This letter is received after 5-7 days. If nothing is received after a week, call the HAFA Helpline again to make another request. It is important to follow up on receipt of the letter to ensure your short sale file is moving forward.

2) Borrower receives HAFA Eligibility Letter What is sent to the borrower is the standard Chase Short Sale Information Packet with an additional page specific to HAFA and details all the conditions required to qualify for the HAFA program. To view these requirements on the internet, we were instructed to visit

3) If the short sale file qualifies under the HAFA program, 6% real estate commission are allowed, otherwise they will drop it to their standard 5%. Therefore, it is beneficial to the real estate agents if they go through the process of qualifying the borrower under HAFA.

4) If you submitted a short sale packet, you can still pursue HAFA qualifications. It is our recommendation to verify whether or not the borrower can qualify for the HAFA program upfront to save you some time on processing.

Historically, Chase has been very slow to process short sale transactions, and with additional guidelines with HAFA, we expect Chase to take some time before their negotiators are up to speed with how to process HAFA transactions. It has been WHB Solutions experience to educate Chase short sale negotiators on short sale processes, especially when they are Chase specific.

We have found the negotiators to be easy to work and follow internal guidelines to the T but information shared internally is not always good. On many occasions we have had to share Chase internal processing changes to negotiators assigned on our other files, which ended up working in our favor as the new internal changes allowed us to process our short sale file faster.

It is our recommendation to investigate whether or not your short sale transaction qualifies for the HAFA program upfront as it will help to make sure you can get 6% real estate agent commissions. Also, we encourage you to escalate your questions if the Chase contact you are communicating with cannot give you an answer to your question.

Keep in mind that short sale negotiators in general have a lot of files to work on and follow processes very closely. Do not expect them to go the extra mile to help you structure your short sale transaction that will be to your advantage. All they are looking for is to process and close the short sale file. The motivation is to close as many files as they can as they receive bonuses based on performance.

Dealing with HAFA Transactions in Bank of America's Equator

In this article we wanted to share some insight into how the HAFA program is being processed by Bank of America, specifically how Equator handles HAFA transactions. When the HAFA program kicked in early 2010, many real estate agents were excited to see that some standard processes were put in place to encourage short sales and to help decrease lender response times. As we move through 2010, the real estate industry is yet to see the benefits of HAFA. We wouldn't be surprised if Bank of America makes multiple changes in the future to improve HAFA transactions and we will continue to report any changes that occur.

Currently, we have an existing file submitted in Equator. The borrower called Bank of America to pre-qualify for the HAFA program and we were told the short sale file was flagged as HAFA qualified. However, after logging into Equator, there is no indication that the file was qualified for HAFA, which led to some concern.

WHB Solutions has analyzed and closed hundreds of short sale transactions and we know that when dealing with short sales, verify everything. Do not take the word of someone on the other side of the phone. Therefore, to overcome our concerns about whether or not our short sale file was in fact HAFA qualified, we contacted the negotiator assigned to our file and was informed that he does not work on HAFA transactions!

No calls were ever made to inform us of this fact and we jumped on the phones to Bank of America's Short Sale Department to confirm that our file was in fact qualified for HAFA. We were then told that the file will be assigned to a HAFA negotiator and we should get an update of this new contact in a week. We were also told that the short sale file will remain open in Equator until a new negotiator is assigned. Whew!

We thought we were in the clear with this file but then we realized based on our past experience that when a file moves to a new negotiator the short sale process is interrupted. A BPO (Broker's Priced Opinion) had already been ordered and we were not sure if this BPO would still be valid. We then called back to Bank of America and they mentioned that the BPO would still be valid and would be reviewed by the new negotiator.

Within a week, the borrower was sent a short sale package with specific paperwork on the HAFA program. Keep in mind that Bank of America's guideline is to send this information to the borrower via US Mail and they will not fax or email this information. Most likely, this information is sent certified mail and must be verified as delivered to the borrower for liability reasons.

Summarizing how Bank of America deals with HAFA transactions, expect the following processing events:

1) Borrower makes initial contact The borrower must call Bank of America to get pre-qualified for the HAFA program.
2) Borrower receives HAFA Package Bank of America sends out a Short Sale packet with HAFA information to the borrower's mailing address.
3) Currently, Equator has no way of showing that a short sale file submitted is qualified under HAFA. Bank of America mentioned that it may update their system to reflect this event.
4) If the short sale file qualifies under the HAFA program, 6% real estate commission are allowed, otherwise they will drop it to their standard 5%. Therefore, it is beneficial to the real estate agents if they go through the process of qualifying the borrower under HAFA.
5) If you submitted a short sale packet, you can still pursue HAFA qualifications. It is our recommendation to verify whether or not the borrower can qualify for the HAFA program upfront to save you some time on processing.

Bank of America - HAFA

I have a short sale in progress, currently in Equator. The status is Valuations, and the buyer just called in for HAFA qualification. According to the front line rep, the file was indeed "tagged" with a HAFA notation, and that our current negotiator would remain with the file.

The number 877.452.3908 is the HAFA line for customers, and they run 8am-8pm EST. Currently, the number is heavily impacted, and it was recommended that borrowers call in early to get through. (8am EST is 5am PST).

I asked the negotiator for next steps, and asked if we should upload the SSA and Alternative RASS into the Library for review.

Bank of America - Equator

Race to the finish. Two files - exact same floor plan in the same complex, one started late Jan, the other late March. However, the main difference seemed to be that in the second property, three different escalation requests had to be made in order for the negotiator to be prompted to take action.

First property - Third Party Auth (3/26), Short Sale Submitted (3/29), Negotiator Assigned (4/5), Valuations Stage completed (5/17), First counter submitted 5/14, Accepted 2nd counter 5/18.

Second property - Third Party Auth (Jan 27), Short sale submitted (Feb 2), Negotiator Assigned (Feb 23), 3 escalations submitted until Valutaions completed (5/5), First Counter (5/17), Second Counter (5/19), Accepted 2nd (5/19)

Other notes: Both properties were listed for ,000. The BPO came back on the first at .5K, but still the first counter came in at ,500. Same for the second property - so this shows that the bank is trying to get over BPO as an initial tactic. #1 has a offer price of .5, while the second property has an initial offer price of .5, and because prices have been dropping, has reduced their price to k.

Case:

PNC + National City

First loan with PNC, 2nd loan with National City. PNC acquired National City - but the short sale applications are being processed by their respective departments. The reps are still not authorized to speak to one another, which prompted us to created a Third Party Authorization that will allow them to speak to one another

In my case, National City was asking for a large contribution (40%), to approve the short sale, something that the PNC investor would never grant. This prompted us to get managers in each department to speak to one another to resolve, but they were not permitted to do so until they received the Third Party Authorization that allowed them to speak to each other.

PNC does participate in the HAFA program, but needs to check whether the investor behind the loan also agrees to participate.

A best practice that we should always remember to do.

Whenever you get a "win" of any kind from a bank rep, it is a great opportunity to get the contact information of their managers in order to write a "Thank you" letter.

Ricardo was the foreclosure technician who helped me process a postponement. I asked him for his manager's email and followed through with my thank you letter.

Look carefully at what came back - the telephone number of his manager Maria (it's in her signature), and it looks like another manager was cc'd on the email - Quinnie Wright.
Now I have three "go-to" people at Bank of America - Ricardo, Maria, and Quinnie - just from the simple courtesy of sending out a thank you email.

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