SCRA Protection – second lien holder and HAFA

Compliance > Lending > Service Members > SCRA
Q: In a short-sale situation, if a bank is the second-lien holder and the first-lien holder is trying to make a HAFA loan, is the second-lien holder obligated to complete the short sale under HAFA guidelines?
 
A:  No, second-lien holders are not obligated to accept the maximum second-lien release payment of $8,500 and waive all deficiencies. However, all of the largest lenders generally do cooperate, since they also have first liens that they would like to short sell under HAFA and they need the cooperation of their peers. Some smaller second-lien holders also accept the HAFA terms because the alternative is often foreclosure.
 
 
ADDITIONAL INFORMATION – This Q&A was released by the Federal Reserve Board, in follow up to their Servicemember Financial Protection Webinar that was presented on September 10, 2012 - https://www.consumercomplianceoutlook.org/2013/first-quarter/servicemember-financial-protection-webinar/
 

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