The HAFA Program

The HAFA Program - Foreclosure Alternatives for Homeowners

  

The Home Affordable Foreclosure Alternatives (HAFA) program is for borrowers who, although eligible for the government Home Affordable Modification Program (HAMP), are not able to secure a permanent loan modification or cannot avoid foreclosure. HAFA provides protection and money to eligible borrowers who decide to do a Short Sale.

HAFA Benefits to the Homeowner

Homeowners who are eligible for HAFA are given an equitable way to avoid foreclosure by performing a Short Sale.  Homeowners benefit by receiving fair time frames for completing each step of the process, compensation for moving expenses and protection from collection actions by their lenders. Some of the key benefits are:

• Borrowers receive $3,000 for relocation assistance.
• Lenders must allow the opportunity for the borrower to attempt a Short Sale before following through with a foreclosure.
• Borrowers are fully released from future liability for the first mortgage debt – lenders cannot ask for a cash contribution, promissory note, or deficiency judgment to complete a short sale.  Additionally, junior lien holders (i.e. 2nd mortgages) who participate in the HAFA incentives must also release borrowers from future liability.

Qualifications and Eligibility

In order to qualify for HAFA, borrowers must meet the basic eligibility criteria

• The property is the borrower’s principal residence.
• The first mortgage originated before January 1, 2009.
• The mortgage is delinquent or default is reasonably foreseeable.
• The mortgage’s unpaid principal balance is no more than $729,750.
• The borrower’s total monthly mortgage payment exceeds 31% of their gross income.
• The mortgage also needs to be serviced by a lender who is participating in the HAMP program (the majority of lenders are).