To reduce the rising number of foreclosures, the U.S. Treasury Department introduced a new federal program that streamlines the short sale process, while removing mortgage-related liabilities for people unable to keep their homes.
The Home Affordable Foreclosure Alternatives (HAFA) program started April 5, 2010 and ends December 31, 2012. HAFA is designed for homeowners who have applied to the Home Affordable Modification Program (HAMP) for assistance but have not had success with their loan modification program, and for homeowners who have requested a HAFA short sale or deed-in-lieu.
To participate in HAFA, you must still meet HAMP’s eligibility criteria:
- Home is principal residence
- First-lien mortgage is in delinquency or default is reasonably foreseeable
- Loan closed before January 1, 2009
- Unpaid loan balance is under $729,750
- Mortgage payment is over 31% of gross income
To participate in HAFA, you must still meet HAMP’s eligibility criteria:
- $3,000 relocation incentive paid at closing.
- Allows you to sell with no out-of-pocket expenses.
- Reduces future liability and tax implications.
- Credit impact can be far less severe then as compared to a foreclosure.
- Mandatory release from future liabilities related to your first mortgage, including cash contributions, promissory notes and deficiency judgments.
- Subordinate lien holders that receive HAFA incentives must also agree not to pursue
deficiency judgments. - Back on the road to being a home buyer in three years or less.
Contact us today to find out today if a HAFA Short Sale is right for you! As your Certified HAFA Specialist Team I will provide you with world-class service every step of the way.
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