HAMP program – Home Affordable Mortgage Program for loan modification. This is where the home owner must start. 80% of loan modifications fail.

HAFA program – Home Affordable Foreclosure Alternative Program refers to the short sale process expedited.
HAMP starts with a phone call from the seller/borrower requesting the loan mod through HAMP. Only 20% of these requests actually get approved.

More Interesting Stats:

3 million Hamp program packages that have been sent to clients.
1 million loan mods in process.  Which leaves 800,000 short sales coming up that are currently in the pipeline.
How much does the borrower’s credit get dinged by a short sale?

There is no benefit to your credit score in doing the HAFA Program.
“Vantage Score” – a new credit bureau reporting agency that a lot of lenders are now moving toward for scoring on loans. They did a survey on 400.000 clients and they broke them down into four groups of 100,000 borrowers each.

1. group one – borrowers have perfect credit, then did a short sale.
2. group two – borrowers are behind on their mortgage, but all the rest of their credit was good.
3. group three borrowers – are behind on all credit, but the mortgage is great
4. group four borrowers – trashed every part of their credit.

• On average, those in group one had their credit score drop between 110-140 points.
• Those in category number two had their credit score drop by an average of 75 points.
• Those in category number three had their credit score drop by an average of 40 points.
• Those in category four had their credit score drop by an average of 0-20 points and in some cases their credit score went up because it made their credit better.

A Foreclosure can drop a credit score by 200-300 points.
A Borrower could possibly qualify for a new loan in 2 years with a short sale Or 4 years with a foreclosure.
Currently 3.2 million homes are in foreclosure.
10 % of all loans are currently 60 days late.
30% of all homes are upside down and the number is expected to rise to 42% by end of 2010.
HAFA is not for Freddie Mac or Fannie Mae. They will, however, have a very similar program out soon.
Purpose of the HAFA program is to standardize the process
Forms.
Requirements.
There are some more requirements coming that you may not have seen yet, where the borrower could be required to make payment through the process to qualify.
SSA 7 page agreement.
RASS is the form you use to submit your offer and the service provider will need to respond to you within 10 days. If they turn your offer down, they must provide a reason as to why they turned it down.

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