Freddie Mac Also Releases HAFA Guidance

Mae was not alone in announcing its version of the Home Affordable Foreclosure Alternatives (HAFA) program Tuesday. Freddie Mac, in Servicer Bulletin No. 2010-12, also introduced a spinoff of the federal short-sale and deed-in-lieu program designed solely for Freddie Mac servicers and borrowers. Like Fannie's HAFA, Freddie Mac's program takes effect Aug. 1, though servicers may begin implementing the initiative immediately. Under Freddie Mac's implementation of HAFA, servicers must first consider a borrower for Home Affordable Modification Program (HAMP) and then for other home retention workout options before considering the borrower for HAFA. Once all other home retention workout options have been exhausted, eligible borrowers must be considered for a HAFA short sale. If the borrower is eligible for and agrees to a HAFA short sale, but the mortgaged property does not sell within the HAFA marketing period, the servicer may offer an eligible borrower a HAFA deed-in-lieu if authorized by Freddie Mac. The following financial parameters are unique to Freddie's HAFA and differentiate a HAFA solution from a Freddie Mac short payoff or deed-in-lieu: [list]Each subordinate lienholder, in order of priority, may be paid no more than 6% of the unpaid principal balance of its loan, until the $6,000 aggregate cap is reached, in exchange for release of the subordinate liens and satisfaction of the underlying debts;*Freddie Mac will accept the short-sale minimum acceptable net proceeds in satisfaction of the amount owed under the note and release of its lien; and*cash contributions or promissory notes will be requested or accepted from the borrower by Freddie Mac. Subordinate lienholders must also agree to release all liens without promissory notes or contributions from the borrower in order for the borrower to be eligible for HAFA.[/list] Freddie Mac will pay servicers $2,200 for every HAFA short sale and $1,500 for every HAFA deed-in-lieu. Following the successful closing of a HAFA short sale or deed-in-lieu, the borrower will be entitled to an incentive payment of $3,000 to assist with relocation expenses. SOURCE: [link=]Freddie Mac


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