New Short Sale Alternative
The Treasury Department introduced the HAFA (Home Affordable Foreclosure Alternatives) program in 2009.This program was created to provide a practical alternative for homeowners unable to keep their homes through the current Home Affordable Modification Program (HAMP). The HAFA program took effect on April 5, 2010.
This program provides an incentive for completing a short sale or deed-in-lieu of foreclosure, to homeowners, their mortgage servicers, and investors. These options allow homeowners to leave their home to acquire more affordable housing and alleviate their mortgage debt under HAFA.
Who is this program for? Those who: 1. do not meet the requirements for a trial mortgage modification under the Making Home Affordable Program; 2. do not successfully finish the trial period for their modification; 3. fail to pay at least two successive payments during their modification period; or 4. ask for a short sale or deed-in-lieu of foreclosure
Who is Eligible for HAFA Program or Also known as Short Sale Program?
To qualify the property must the principal residence and the mortgage has to have originated prior to
2009.
Typically, this option is only offered after all other options to save the home have been exhausted. Additionally, the borrower must meet certain eligibility requirements to qualify for a short sale. These include:
1) The borrower must be able to show proof that their home is currently worth less than the unpaid balance.
2) The mortgage is in default or near default.
3) The homeowner must prove they are in financial distress.
4) The homeowner has no assets they can draw from to maintain mortgage payments.
