financialcounselor

Mortgage Company Offers HAFA Program, then Reneges at the Last Minute

In Housing Horror Stories on June 8, 2012 at 12:13 am

I’ve written a lot about the trials and tribulations of people desperate to get accepted into the government’s housing program in order to have their mortgage payment reduced, and hopefully, be able to keep their home. I’ve tried to illustrate the craziness and the frustration that many people deal with as they navigate their mortgage company’s application processes, which frankly, could drive a person nuts.
Well, today I spoke to a lady who was sobbing because she was denied entry into a program that would have helped her get rid of her house.  See, the government has another program called the Home Affordable Foreclosure Alternative. What this does, is it streamlines the process for people who want to give up their house through a short sale. In addition to making the sale go through a lot quicker, the homeowner gets $3,000 for relocation expenses.
This woman, Carla, saw a huge drop in her income, I’m talking 60 percent, and she knew there was no way she was going to be able keep up with her house payments. So she approached her mortgage company about short selling the house. And they told her they would put her in this HAFA program and give her the $3,000 to move. To Carla, this was the answer to all her prayers, because she had nothing to pay for a move and a security deposit on a rental. So Carla got herself a realtor and began packing. A buyer was found, and the closing date for the sale was set.
Well, three days before the closing, her mortgage company told Carla that she was not approved for HAFA after all, and she would not be getting the three big ones. And this poor woman was scheduled to be out of the house within days after the closing. So here it was a week before she had to move and give a check to her new landlord, and the money she was banking on to pay for it all wasn’t going to be there. And now she was on the phone sobbing to me.
We called the mortgage company and were told that the investor who held her loan did not participate with the HAFA program, even though five months earlier she was told that yes, the investor does participate in HAFA and she was approved for it.
“Let me ask you something,” I said to the mortgage company phone rep. “Why did you tell this lady months ago she was approved for this program, if the investor you work for doesn’t even participate in it?”
You know what the guy answered me? He said, “I don’t know.”
“Well, she can’t move without that money, which your company told her she would be getting. And she needs to be out of the house in a week. Why wasn’t she notified earlier than three days before closing that she’s not approved for this? Do you know the answer to that?”
Of course he didn’t.
My advice to Carla was to call off the sale, and let the bank foreclose. That would take a while, and in the meantime she would hopefully save up the money to move.
That’s why I always tell my clients, don’t bank on anything a mortgage company says. As you can see, the people giving out the information don’t even know what’s going.

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