WHAT IS HAFA?
Affordable Foreclosure Alternatives or HAFA Short Sale comes from the Making Home Affordable or HAMP Government Program. Do you have to go through the process of a HAMP Loan Modification before you try the HAFA Short Sale? The answer is No. Homeowners may go straight to HAFA.
Most banks are part of the list of participating lenders for the HAFA Program including Bank of America, Wells
Fargo, Chase, GMAC, Citibank, Citi Mortgage, etc. If your mortgage is
owned by Fannie Mae or Freddie Mac, they also have their own version of the HAFA Short Sale.
The Home Affordable Foreclosure Alternatives Program offers incentives to borrowers, servicers, and investors that use it. Homeowners may receive up to $3000 for relocation assistance. The lender also agrees not to pursue the borrower or homeowner for any deficiency or the difference between the mortgage balance and the short sale proceeds. With HAFA, they cannot ask the seller for any additional money towards the Short Sale.
Some notes on the HAFA Short Sale Program:
- The Short Sale property must be the homeowner's primary residence OR should have been their primary home within 12 months of HAFA. Example, some people relocate for work and may have moved out of the property.
- Homeowner does not have to be late on their mortgage payment however, they must be in danger of Foreclosure or imminent default.
- The mortgage balance (1st mortgage) cannot be higher than $729,750.
- The HAFA Short Sale allows for payoff to 2nd loans or mortgages. 6% or overall $6,000.
- You may begin the HAFA Short Sale Program before you have received an offer from a buyer or after an offer has been received.
- It is important that you start HAFA before there is a foreclosure (sale) date placed on the property by The lender or they may not allow for HAFA if there is not enough time.
If you do not qualify for a HAFA
Short Sale, then you may attempt the traditional Short Sale.