A critical detail a lot of sellers miss when I speak with them regarding the Home Affordable Foreclosure Alternatives program (HAFA) is if the lender has sent a letter inviting
them to do a HAFA short sale, they have 14 days to respond to them or they do not have to allow the seller to do a HAFA short sale! I don't feel that lenders want to be restricted by these HAFA regulations so more often than not they use this as an excuse not to do it. Most sellers I speak to weren't even aware they got this "invitation" from their lender.
Another consideration for those lenders still willing to do it is if
they are about to start a foreclosure, some lender’s guidelines to their servicers
prohibit considering the property for a HAFA short sale if the
foreclosure process has started. Also, if the foreclosure is less than seven business
days away, some servicers will not stop the foreclosure, relying on the
wording in the Making Home Affordable Manual concerning Escalation
Cases where they do not have to stop the foreclosure if it is less than 7
business days away. As a side note, if you have a Fannie Mae loan, you
need permission from Fannie Mae (not just the servicer) to start a HAFA
short sale if the foreclosure sale date is 60 days or less in the
future.
