Homeowners contemplating a HAFA short sale need to be aware that if their loan is a Fannie Mae loan, Fannie Mae will not do a HAFA short sale within 60 days of a scheduled auction date. In California, what does that mean?

California foreclosure law provides a 3 month window for the first stage of foreclosure (filing of the Notice of Default notice). The final window is when the Notice of Trustee Sale notice is filed, which can be as short as 21 days.

Because of the “dual track” process, the time clock keeps running even if a homeowner applies to their lender for a short sale. It can take months for a lender to approve a traditional short sale, while a HAFA application will take at least 30 days for review, then time to negotiate a deal. It’s not unusual for 2 months to go by until a homeowner gets their final pre-approved HAFA short sale.

How do you know if you’ve got a Fannie Mae loan? Click here for Fannie’s loan lookup site. So needless to say, once the Notice of Default has been filed, the homeowner needs to quickly begin their HAFA application process.