Home Affordable Foreclosure Alternatives Program - HAFA Short Sale Program

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 takes effect on April 5, 2010—although some servicers may implement it sooner, if they meet certain requirement. The program will end on December 31, 2012.

Home Affordable Foreclosures Alternatives Program: Guidelines and Forms

Basic Overview

Does not take effect until April 5, 2010
Pertains to 1st Lien Non-GSE Mortgages
Utilizes borrower’s financial information through HAMP
Financial incentives provided to borrowers, servicers and investors
Sets limits on lender response time
Lender forfeits ability to pursue deficiency judgment
Caps claims of subordinate lenders

Requirements

A loan is eligible if all of the following conditions are met:

Property is borrower’s principal residence
Loan is a 1st lien mortgage
Originated before Jan 1, 2009
Mortgage is delinquent or default is reasonably foreseeable
Current unpaid balance is equal to or less than $729,750
Borrower’s total monthly mortgage payment exceeds 31% of borrower’s gross income

Incentives

$3,000 to Borrowers for relocation costs
Will be deducted from gross sale proceeds at closing
$1,000 to Servicers for administration and processing fees
Servicer may not charge borrower any processing fees and MUST pay all out-of-pocket expenses
$1,000 to Investors for subordinate lien holder payoff
For every three dollars spent to release liens, buyer or investor is reimbursed one dollar – capped at $3,000

Process & Timelines

Please contact us for a detailed outline of how the HAFA program works specifically for your mortgage lender and your situation.