HAFA with Wells Fargo

HAFAThe summary information about the home affordable alternatives model is simple prepared by Wells Fargo and does not represent any determination by the Treasury as to servicer’s compliance with the policies of treasury and guidance for HAFA. Treasury does not support any language or policy described in the model.

Eligibility requirements: – According to guidelines of Treasury a loan meets the basic eligibility criteria if the servicer verifies that all of the following conditions are met: 

  • The mortgage is a first lien originated on or before January 1, 2009.
  • The mortgage is negligent or default is reasonably foreseeable.
  • The current unpaid principal balance is less than or equal to: o $729,750 for a one-unit property
    • $934,200 for a two-unit property
    • $1,129,250 for a three-unit property
    • $1,403,400 for a four-unit property
  • The property is not incriminated.

Treasury requires that a borrower have a documented financial hardship, evidenced by a signed Hardship Affidavit or Request for Mortgage Assistance (RMA), wherein the borrower has represented that he or she does not have sufficient liquid assets to make the monthly mortgage payments. If a borrower is current or less than 60 days negligent and would like to be considered, they may still be eligible pending further review of their financial situation. Loans with a scheduled foreclosure date may still be considered for Home Affordable foreclosure Alternatives (HAFA) depending on the timing of the scheduled foreclosure sale.

Relocation Assistance: – The borrowers who occupy the property may be eligible to receive relocation assistance upon successful completion of the short sale or deed in lieu if they were occupying the property at the time of requesting assistance and meet all other HAFA eligibility requirements.

Documentation requirements: –

Documents that may be required for pre-approval to follow a short sale:

  • Hardship Affidavit/RMA

Documents that may be required when once a purchase offer has been made for a short sale:

  • Hardship Affidavit/RMA
  • Purchase Agreement and Estimated HUD-1
  • Proof of buyer funds or buyer’s pre-approval or commitment letter on lender letterhead
  • Subordinate lien holder’s written approval and agreement not to pursue deficiency balance
  • Non-Owner Occupant Certification for each non-owner residing in the property who will be required to relocate
  • Proof of occupancy for the borrower or any non-borrower occupant, such as lease agreement, copies of utility bills, etc
  • Dodd-Frank Certification
  • HAFA Affidavit

Documents that may be required for a deed in lieu of foreclosure:

  • Hardship Affidavit/RMA
  • Subordinate lien holder’s written approval and agreement not to pursue deficiency balance
  • Non-Owner Occupant Certification for each non-owner residing in the property who will be required to relocate
  • Proof of occupancy for the borrower or any non-borrower occupant, such as lease agreement, copies of utility bills, etc
  • Dodd-Frank Certification
  • HAFA Affidavit

Valuations: –

Establishing property value

Valuation is obtained based on investor guideline.

Disputed valuations

If there is a dispute, the borrower must submit a written request for re-evaluation and provide us with a recent estimate of the property value and a reasonable basis for that estimate. If there has been a change in the property condition that impacts the value then please submits your documentation supporting the change in property condition. The information submitted by the borrower will be reviewed by Wells Fargo, and if warranted, Wells Fargo will re-evaluate the short sale request and consider lowering the minimum net sales proceeds (MNSP).

Periodic reassessment of value

Wells Fargo orders a new valuation every 90 days during the HAFA process. Once the new value is received Wells Fargo will review to determine if the MNSP has changed. If the MNSP has decreased Wells Fargo will communicate the change to the borrower, if the MNSP has increased Wells Fargo will not change the MNSP if the NOSS has already been issued and has not expired.

Payments during marketing period: –

The Borrower should continue to make payments due under the loan terms until the short sale is closed. Wells Fargo does not require any additional payments or changes in payment during the marketing period.

Deed-In-Lieu Policy (DIL)/Special programs: –

Subject to investor and insurer approval, a DIL may be an option if the short sale marketing period expires without an acceptable offer or if the borrower does not want to follow a short sale, with the following requirements:  

  • Borrower must provide clear and marketable title.
  • There must be no unfavorable change in property condition during the DIL process.
  • Property must be left in broom clean/swept condition.
  • Occupants will be provided a leave date of no less than 30 calendar days from the termination date of the NOSS or the issuance of the DIL agreement, whichever is later. The occupants may voluntarily agree to vacate at an earlier date.
  • If the property involved is rental property, the borrower must provide a signed Non-Owner Occupant Certification from each occupant who may receive relocation assistance payment because they will be required to relocate. The borrower must also provide proof that the property is the primary residence of the non-owner occupants. Acceptable documentation includes a lease agreement, copies of utility or phone bills, etc.
Home Affordable foreclosure Alternatives (HAFA) with Wells Fargo by