I just finished a conference call with the U.S. Treasury’s Director of Policy for Homeowner Preservation, Laurie Maggiano. The conversation was in regards to the Government’s new plan to stimulate short sales, and she shed light on the effectiveness HAFA. No surprise, it’s not working well. That said, she encouraged us to be patient, and reminded us that HAMP did not initially work either, but has since become more-effective.
The initial goals of HAFA were to streamline the short sale process, and make things more-efficient in regards to what documents to submit, and who to submit them to. HAFA also intended to provide timelines, roles for all parties involved, and essentially remove the veil that banks seem to intentionally keep over the process. Other intended benefits of the HAFA program for Sellers include the release of deficiency liability, and placing money into Seller’s pockets upon closing ($3,000!). But what has REALLY happened since the HAFA program came out in Q4 of last year?
The answer so far is: Not much. In fact, professionals ‘in the trenches’ like me even scoff at the HAFA program, as it’s frankly made our professional efforts less-effective, and caused us unnecessary headaches. To expand on what I mean, the biggest obstacles of HAFA really are the jr. liens (2nds, 3rds, HOAs, etc.), and them releasing their deficiency rights (when applicable). In the beginning they lead us to believe that they will cooperate with our efforts, but when it comes down to it, they do not. The time it takes to discover this though we’ve lost valuable time, collected an extensive amount of unnecessary documents from the seller, and have possibly lost the buyer as well.
According to Laurie Maggiano, they are fixing this problem. How? First, required and dedicated Escalation Teams within each lender. Second, they are requiring a certain level of participation from each lender, instead of the program being voluntary as it has been in the since initiated in Q4 of last year. Last, they are listening to RE Brokers for suggestions on who to improve their systems, since we are the ones dealing with them on a daily basis.
Let’s hope these adjustments to HAFA work, making all of our efforts just little bit easier…