Home Affordable Foreclosure Alternatives (HAFA) With CitiMortgage

mortgage-house

All of those servicers who have signed agreements with the U.S. Department of the Treasury to participate in the Home Affordable Modification Program (HAMP) must consider those eligible borrowers who do not qualify for HAMP for other foreclosure prevention options including Home Affordable Foreclosure Alternatives (HAFA) which includes short sale and deed-in-lieu (DIL). However, each servicer has some judgment in determining additional eligibility criteria and certain program rules.

Eligibility requirements for Short Sale and Deed in Lieu: –

  • The loan must be owned by Citimortgage or by a private investor.
  • The mortgage loan is a first lien mortgage originated on or before January 1, 2009.
  • The mortgage is delinquent or default is reasonably foreseeable.
  • Loans currently in Foreclosure and Bankruptcy are eligible.
  • The borrower has documented a financial hardship that is evidenced by a signed Hardship Affidavit or Request for Mortgage Assistance (RMA), in which the borrower has expressed that he or she does not have sufficient liquid assets to make the monthly mortgage payment.
  • Foreclosure Sale Date:
    • Loans in foreclosure that have a sale date set which is less than 60 days from the date that the borrower requests consideration for HAFA are ineligible.
    • In addition, once a foreclosure sale has occurred the loan is no longer eligible.
  • First of all Citimortgage will evaluate the borrower for a HAMP modification prior to any consideration being given to HAFA options. Borrowers that meet the eligibility criteria for HAMP but who are not offered a Trial Period Plan, do not successfully complete a Trial Period Plan, or default on a HAMP modification will first be considered for the other loan modification or retention programs offered by Citimortgage prior to being evaluated for HAFA.
  • The property securing the mortgage loan is not criticized.
  • Mortgage Insurance:
    • For those loans that have mortgage insurance coverage, the transaction must follow with the agreement of Citimortgage that is done with the mortgage insurer; otherwise, Citimortgage must submit the transaction to the mortgage insurer and obtain approval for HAFA. A mortgage loan does not qualify for HAFA unless the mortgage insurer rejects any right to collect additional sums such as cash contribution or a promissory note from the borrower.
  • Private Investors:
    • Each private investor makes a decision as to whether or not they will participate in HAFA. When Citimortgage recommends a HAFA short sale on a loan serviced on behalf of a private investor, we seek such investor’s approval on a case by case basis.

Documentation requirements: –

Pre-approved Short Sale Notice (SSN);

  • Hardship Affidavit or Request for Modification and Affidavit (RMA)
  • Evidence of residency;
    • Citimortgage may request one or more the following to confirm principal residence including tax return, tax bill, utility bill, valid passport, driver’s license, Medicare card, permanent resident card or armed forces identification.
  • Subordinate lien documentation that is a payoff quote from any subordinate lien holder including written commitment from the subordinate lien holder that it will release the borrower from all claims and liability relating to the subordinate lien in exchange for receiving the agreed upon payoff amount.

Existing Offer Submitted prior to HAFA pre-approval of Short Sale;

  • Accepted purchase contract
  • The purchase contract must include a clause stating that the sale must represent an arm’s length transaction, and that the purchaser may not sell the property within 30 calendar days of closing and for the period between 31 and 90 calendar days of the closing, the purchaser is prohibited from selling the property for a gross sales price greater than 120% of the HAFA short sale price.
  • Buyer’s documentation of funds or buyer’s pre-approval or commitment letter on letterhead from a lender.
  • All information regarding the status of subordinate liens and/or negotiations with subordinate lien holders.

Valuations: –

Establishing Property Value: – Citimortgage will assess the current value of the property using a compliant evaluation. The valuation will be independent of the borrower and any other parties to the transaction. Citimortgage will not require the borrower to pay in advance for the valuation, but will add the cost to the outstanding debt in accordance with the borrower’s mortgage documents. The valuation must be less than six months old as of the date of the evaluation.

Disputed Valuations: – With the help of listing process, it is critical that Citimortgage and the borrower agree on the value of the home in order to get the property listed correctly to complete a HAFA short sale. If Citimortgage is using a value that the borrower or the borrowers real estate broker disagrees with such value may be disputed by:

  • Contacting your assigned Homeowner Support Specialist (this representative will be determined at the time you are reviewed for HAFA eligibility).
  • HAFA does allow a borrower to request an appraisal to be completed on their property. Citimortgage may add the cost of the appraisal to the outstanding debt of their mortgage in accordance with the borrower’s mortgage documents and applicable law.

Payments during marketing period: –

Citimortgage will identify in the SSN or DIL Agreement, the amount of the monthly mortgage payment that the borrower is required to make during the term of the applicable agreement and pending transfer of property ownership. Citimortgage requires the monthly payment to be the lesser of the borrower’s current monthly payment or 20% of the borrower’s gross monthly income.