Housing Affordable Foreclosure Alternative
The Home Affordable Foreclosure Alternative (HAFA) program, in a nutshell, prevents your lender/servicer from foreclosing on your property until both Short Sale and Deed In Lieu options have been exhausted. Some of the highlights of the program include:
- Allows borrowers to receive pre-approved short sale terms before listing the property.
- Requires borrowers to be fully released from future liability for the first mortgage debt and, if the subordinate lien holder receives an incentive under HAFA, that debt as well (no cash contribution, promissory note, or deficiency judgment is allowed). - Uses a standard process, uniform documents, and timeframes/deadlines.
- Provides financial incentives: $1,500 for borrower relocation assistance; $1,000 for servicers to cover administrative and processing costs; and up to a $1,000 match for investors for allowing a total of up to $3,000 in short sale proceeds to be distributed to subordinate lien holders.
- Allows borrowers to remain in home for at least 120 days and can be extended to one year.
- Requires servicers to respond to purchase offer within 10 days of receipt of all information.
In our opinion this is the most exciting and fundamental change to the Short Sale process. We are hoping this will bring an end to the months and months of waiting on a short sale lender to either accept or deny an offer and will allow all of our frustrated buyers to actually close on a home and bring in a new surge of motivated buyers.
We understand that in order to a short sale to occur that there is some devastation – someone is unfortunately losing their home. But what does excite us about the HAFA program is that the act of losing their home doesn’t also evolve into ruining their future. HAFA provides a viable alternative to foreclosure with less impact on your credit report, a guaranteed forgiveness of debt, and a respectable way to leave your home – with a “SOLD” sign in the front yard. Please contact us so that we can go over all of the details with you on a personal level. Our goal is to provide genuine service IF you need it. Just call us.
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