HAFA- Home Affordable Foreclosure Alternative
What is HAFA?
The Home Affordable Foreclosure Alternatives (HAFA) is an extension of HAMP (Home Affordable Modification Program). HAMP resulted in only 166,000 permanent loan modification from 3.3 million homeowners who requested HELP. It was obvious an extension to the the program was desparately needed. HAFA is a government-sponsored initiative overseen by the US Treasury Department and administered by Fannie Mae assisting all Home Affordable Modification Program (HAMP) - eligible homeowners in avoiding foreclosure, specifically through short sales or deed-in-lieu of foreclosure. This program is now in effect and has players from every corner of the industry. Real Estate Agents, Lenders and Technology vendors are teaming up and will be working together to automate and streamline the process, making "qualified" Short Sales easier to close.
HAFA directs lenders to assist eligible homeowners by implementing short sales or deeds-in-lieu by providing financial incentives to lenders that carry out these foreclosure alternatives through the program's guidelines. The program was introduced in part to help keep communities from being destroyed through massive foreclosures. HAFA in its current state is ONLY applicable to conventional-type, non-Governmental Serviced Enterprises mortgages and therefore does not apply to loans owned or guaranteed by Fannie Mae or Freddie Mac. These organizations may have plans to release their own versions of HAFA.
Who is Eligible for HAFA?
Most homeowners facing financial hardship are eligible. As a rule, if a homeowner is eligible for HAMP but cannot pay the mortgage, then he or she is eligible for an assisted short sale through HAFA. However, loans owned or guaranteed by Fannie Mae or Freddie Mac do NOT qualify.
Servicers must consider possible HAMP eligible borrowers for HAFA within 30 calendar days if the borrower has met one or more of the following criteria:
Does not qualify for a HAMP Trial Period Plan
Does not successfully complete a HAMP Trial Period Plan
Is delinquent on a HAMP modification by missing at least two consecutive payments
Requests a short sale or deed-in-lieu
For a loan to qualify, it must meet the following criteria:
The property is the borrower's principal residence
The mortgage loan is a first lien mortgage originated on or before January 1, 2009
The mortgage is delinquent or default is reasonably foreseeable
The current unpaid principal balance is equal to or less than $729,750
The borrower's total monthly mortgage payment exceeds 31 percent of the borrower's gross income
The mortgage is not owned or guaranteed by Fannie Mae or Freddie Mac
Which Lenders are participating in HAFA?
Click this link to see the lenders that have agreed to participate in the HAFA program. To check your eligibility statuses please contact us by clicking on the Short Sale Right For Me? tab prompting you to our Online Questionaire. One of our first steps will be to determine your eligibility. If you are NOT eligible we can still assist you in the Short Sale using the traditional methods.
Incentives to Participate
The US Treasury Department has put incentives on this program to assist the lenders and the homeowners to participate. Lender will receive money to off-set their loss and homeowners will receive $3000 in relocation money.