The Home Affordable Foreclosure Alternatives (HAFA) Program is a government sponsored program that allows borrowers (homeowners) that are in financial trouble to avoid foreclosure either through a short sale or a deed in lieu of foreclosure. The program is designed to be implemented either after the HAMP loan modification has failed or (as recently amended) is in process as an option to sale. There are different guidelines to the program dependant on whether or not your loan is a Fannie Mae/Freddie Mac or a non government sponsored enterprise (GSE). The combination of these holders equates to more than 90% of the home loans out now so it is a program that should continue to grow in success as servicers and real estate professionals embrace and help implement it for their clients. The program not only offers up to $3,000 in relocation funds to the borrowers on a successful closing but also provides financial incentives to the servicers and first lien investors for their cooperation.
Overview of the basic guidelines for eligibility is as follows:
- The property must be your principle residence. Property can be vacant or rented up to 12 months prior to the Short Sale Addendum(SSA), as long as you can prove that it was your primary residence and that you have not purchased a 1-4 unit family property in those 12 months.
- The mortgage loan is a first lien originated on or before January 1, 2009.
- The mortgage is delinquent or default is reasonably foreseeable.
- The current unpaid principle balance is $729,750 or less. (Higher amounts apply to 2-4 unit properties).
- Borrower must be able to sign a Hardship Affidavit (or in some cases write a Hardship Letter explaining the circumstances of financial distress).
- Your lender has agreed to be a part of the HAFA/HAMP program.
- You have to be able to provide clear and marketable title.
You have to sign an “arms length transaction” affidavit.
Investors are allowed to implement their own standards in addition to these so it is impossible to detail every possible scenario.
Overview of the basic incentives of the program is as follows:
- An option to foreclosure becoming a part of your permanent history.
- Uses a standard process, documents and timeframes.
- Servicer must reply to an executed contract within 30 days.
- Provides financial incentives of up to $3,000 for your relocation.
- Requires you to be fully released from future liability for the first mortgage debt and if a subordinate lien holder receives a payment from the first lien holder to enable the transaction, that debt as well. (Forgiven debt could have tax and credit rating impact…you are advised to seek financial and tax advice from a professional.)
So in a nutshell it appears to be a great program that the majority of homeowners facing financial difficulty will at the very least need to be considered for. Please consult with a professional Realtor in your area about your circumstances and the current value of your home for information detailed to your situation. You will be advised to seek legal advice since a short sale is not always in the best interest of every homeowner. If you live in Temecula, Murrieta, Wildomar, Lake Elsinore, Menifee or Winchester that professional Realtor is us! We’d love to talk with you about your situation and see how we can help. April (951) 522-0518 or Gary (951) 522-6308 or email us at firstname.lastname@example.org
Tarbell Realtors is not associated with the government and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.