What Is HAFA?

 http://www.youtube.com/watch?v=8TXx8rKy-Ow

The Home Affordable Foreclosure Alternatives (HAFA) Program1 is a government-sponsored initiative led by the US Treasury Department assisting all Home Affordable Modification Program (HAMP)-eligible homeowners in avoiding foreclosure, specifically through short sales or deeds-in-lieu. First introduced November 30, 2009 in Supplemental Directive 09-092 as part of HAMP, HAFA assists eligible homeowners in quickly and effectively implementing short sales by providing financial incentives to lenders that work in conjunction with HAMP to assist homeowners in need. The program was introduced in part with the intent to remove the stigma from short sales and help keep communities from being destroyed through massive foreclosures. HAFA in its current state is only applicable to conventional-type, non-Governmental Serviced Enterprises (non-GSE) mortgages and therefore does not apply to loans owned or guaranteed with Fannie Mae or Freddie Mac. These organizations may have plans to release their own versions of HAFA.

Details of HAFA

HAFA was introduced to simplify and streamline the short sale process. HAFA accomplishes this in the following ways:

• Compliments HAMP by providing viable alternatives for borrowers who are HAMP-eligible
• Utilizes borrower financial and hardship information collected in conjunction with HAMP, eliminating the need for additional eligibility analysis
• Allows the borrower to receive pre-approved short sale terms prior to the property listing
• Prohibits the servicer from requiring, as a condition of approving the short sale, a reduction in the real estate commission agreed upon in the listing agreement
• Requires that borrowers be fully released from future liability for the debt
• Uses standard processes, documents and timeframes
• Provides financial incentives to borrowers, servicers and investors

HAFA provides financial incentives as follows:

• Financial incentives for lenders participating in the program include a $1,000 servicing bonus
• Homeowners can receive up to $1,500 in relocation assistance (which, in some cases, may classify as taxable income) after a short sale or deed-in-lieu has been executed
• Lenders pay all servicing fees - homeowners suffer zero out-of-pocket expenses

To find out more about this exciting government sponsored program or to see if you may be eligible, please contact me and I will get back to you shortly.