It was promoted as a way to get through the short sale mess so much quicker. A 10 day turnaround from the banks, a pre-approved short sale price BEFORE the listing goes live. The banks get a little extra incentive from the government to move quickly, the seller gets a little bit of money to leave the home in a clean and orderly fashion, the new buyer doesn’t have to wait for 3 months before hearing if the bank will accept the offered priced.
On January 6th 2011, American Banker posted an article quoting the California Association of Realtors (CAR) that fewer than 400 properties have successfully made it through HAFA by the end of September.
The primary cause is that “Servicers are ignoring HAFA guidelines altogether”. CAR’s president Beth Peerce wrote in the letter that “countless consumers have lost deals, primarily because servicers take so long to review and approve short sales that potential buyers gave up or walked away from the deal.”
Having worked both the listing side trying to get the pre-approved HAFA and from the buyer side waiting 9 weeks for the “10 day response” to a HAFA short sale, I know first hand that the program isn’t working. Now I know that it’s not just me and my clients, it’s not working for almost anyone.
You can read CAR’s full letter here: