How HAFA Can Help You

If you qualified for a loan modification and were unable to work out a plan you could afford, and you otherwise qualify under the Home Affordable Foreclosure Alternative Program (HAFA), you should know what you can expect for participating in the program.

First and most important, you will have a plan for completing a short sale or deed in lieu of foreclosure. Many short sales languish for months. Often buyers get fed up and walk out of the deal, just waiting for the seller’s lender’s response. HAFA is expected to speed up the short sale process; prior to listing the property, homeowners will receive pre-approved terms for their short sales.

Second, and also important, you will be released from liability for any portion of the debt that is not paid. In other words, if you bought your home with a $300,000 mortgage, and sold the home for $250,000 in a HAFA-approved short sale, you will not be liable for the $50,000 balance to your lender.

Third, if you are able to complete a short sale or deed your home to the bank in lieu of foreclosure, you will receive $1500 towards your moving costs.

Of course, your bank is not required to sign up for HAFA, but banks that do sign up receive some incentives also. Namely, the bank can get $1000 towards covering their administrative costs. If the bank is a secondary lienholder and agrees to relinquish its lien, the bank can get up to $3000 of government monies through a matching program.

If you are having trouble with your loan payments, look into HAFA to see if you qualify! For a list of criteria to qualify for HAFA, click here.