The Treasury Department’s decision to raise the amount servicers can pay second-mortgage holders for a lien release should give its short sales program a boost, according to an industry expert.Second-lien holders can veto any short sale so Treasury raised the buyout limit by $2,500 to $8,500 in March along with other improvements to its Home Affordable Foreclosure Alternatives (HAFA) program.
“HAFA is really a nice program at this point,” said Travis Olsen, co-president of Loan Resolution Corp.
Since its rollout in the spring of 2010, servicers have completed 40,000 HAFA short sales. However, “the numbers have picked up a lot in the last year,” Olsen told ASR sister publication National Mortgage News.
With the increase in the second-lien payoff limit, Olsen sees much more HAFA activity coming down the road.
“I can see numbers doubling from 40,000 to 80,000 in closed short sales in a year,” Olsen said.