Banks are outsourcing HAFA deals to 3rd party companies right now & they're going to send out their own appraiser & chances are very high the value will come back completely inflated.
You also need to ask the listing agent RIGHT NOW, if the seller has 2 loans & if that 2nd lien is higher than $100K. If it is, the likelihood of HAFA being approved will be slim to none, because the 2nd lien holder won't allow it. This is because under HAFA rules, the 1st lien holder will ONLY offer the 2nd $6,000 max.
You should also find out what type of loan the 2nd is, purchase money or equity loan. If their 2nd lien balance is less than $100K, but it is an equity loan or a cashed out refinance, it will likely be denied for HAFA because they'll want a 30% payout to release the lien paid in full & that will exceed the $6K the 1st will pay under HAFA rules.
HAFA is more or less a total failure nationally, you may be waiting 30-60 days to see if the seller is going to be HAFA approved & if they aren't, your process will start all over again, which could take another 60 days to get traditional short sale approval.
Realtor Since 1996
When does the independent appraisal come in? During the HAFA or the short sale approval? How long does the short sale approval typically take given I meet all the HAFA requirements?
That all depends. Did the seller go through the HAFA RASS (request for approval of short sale) approval process before listing? This is a system where the home owner gets "pre-qualified" for the short sale and their lender gives them the price at which their realtor needs to list and market the property. If this is the case and your offer is at the required price, you should see final approval relatively quickly, although I have not yet seen 5 days.
If the property was listed before the owner went through the RASS process, then please note HAFA guidelines have never shown a 5 day turn around time. More like 30 days, assuming that the listing agent stays on top of the lender. Otherwise, you could find yourself in the 45-60 day range. And yes, there is a chance the bank will counter. Per HAFA guidelines, an independent appraisal needs to be done to set the HAFA value. In my experience, these tend to be at the high end of market value, and sometimes over market value, although not always. It kind of depends on the luck of the draw.
Hopefully you fall into the first category and your offer will sail through the system effortlessly. Make sure you have your loan lined up, because the bank will want you to complete the purchase as quickly as possible.
Dare to Dream.
Shel-lee Davis, QSCÂ®
Certified Distressed Property Expert â€“ CDPEÂ®
Short Sale & Foreclosure Resource â€“ SFRÂ®
Certified HAFA Specialist â€“ CHSÂ®
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RE/MAX Palos Verdes Realty
Bank of America for instance, has a few different 3rd party vendors who handle x%/certain HAFA file negotiations for the loans they service (like REDC, or Loan Resolution Corp). Each appears to handle it a bit differently (the process) based on my experiences. Unfortunately, there is no way to tell you exactly how the process will play out, for you. HAFA offers are supposed to be more streamlined, structured, and and quick. I've heard of getting approval in 10-14 days...and more of an average around 30-45. It just depends from what I can tell.
Whether or not they make a higher counter, will be based *mostly* on what the fair market value for the home is, as determined by them and or their independent verification process, which may utilize a BPO (broker price opinion/appraisal). If your offer is under fair market value, there's pretty good odds you'll receive a counter offer. If you're working with a good Realtor, they should be able to indicate to you where, with respect to market value, your offer stands. Likewise, banks sometimes (go figure) make mistakes, and act on bad information, ie - their value is too high or their value is too low.
Best of luck with your offer!