Home Affordable Foreclosure Alternatives
In 2009, the Treasury Department introduced the HAFA program to provide a viable option for homeowners who are unable to keep their homes through the existing Home Affordable Modification Program (HAMP). The HAFA program took effect on April 5, 2010 and ends on December 31, 2012.
There have been Numerous Improvements made and the process has been streamlined to make it easier for Homeowners to Qualify and Avoid Foreclosure. The current HAFA system has the following guidelines:
- Borrower is Unable to Afford their Home whether or not they have received a Loan modification
- The servicer can still qualify the borrowers eligibility for HAFA while they are still considering HAMP
- A Financial Hardship Exists – Borrower Must sign Hardship Affidavit – Lender MAY request verification of financials.
- No Fees can be charged to the Homeowner for the program
- Owner has decided to actively pursue a Short Sale through a qualified real estate brokerage
- Standardized Short Sale Agreements and Offer of Acceptance
- The sale must be an “arm’s length’ transaction between buyer and homeowner
- Servicers will now determine the Net Return for Investors
- Must allow at least 120 days to market and sell the property
- No foreclosure can occur during the marketing period.
- Servicer Must respond within 30 days
- Property can be vacant or rented – Borrower must prove primary residence occupancy in prior 12 months and No new home has been purchased
- First lien mortgage originated before 1/1/09
- Requires borrowers to be fully released from future liability for the first mortgage debt (no cash contribution, promissory note, or deficiency judgment is allowed)
- 2nd lien mortgage receives up to $6000
- Mortgage is at least 60 days late or default is imminent
- Unpaid principle balance Less Than $729,750 for home
- The homeowner can receive up to $3000 in re-location assistance upon sale
- Services have the option for Alternative Deed in Lieu (DIL) Programs after the marketing period and homeowner may also qualify for HAFA relocation