The Treasury Department released new guidelines for homeowners who are facing hardship; this program is called HAFA (Home Affordable Foreclosure Alternatives) which was released on November 30, 2009.
This program is part of Home Affordable Modification Program (HAMP) and for those homeowners who qualifies for HAMP loan modification but cannot afford to keep their homes. HAFA program provides incentives to homeowners and lenders who participates in short sale or deed-in-lieu to avoid foreclosure.
Lenders who are participating in HAMP program are required to participate in HAFA program to approve the short sale. Almost all the major lenders are participating in this program. For more information on HAMP program, you can visit their official website makinghomeaffordable.gov.
HAFA program is designed to make the short sale process easy for both the homeowners and lenders. The main highlight of this program:
- Borrowers who qualifies for Home Affordable Modification Program (HAMP) but unable to keep their home
- Borrowers to receive pre-approved short sales from their lenders before they list their properties
- Borrowers are protected from future liability for the first mortgage debt; that means there will be no deficiency judgment, no promissory note or no cash contribution in order to approve the short sale
- Borrowers get $1,500 for relocation assistance; servicers get $1,000 and investors get up to $1,000 and up to $3,000 to second lien holders
- Servicers to uses standard processes, documents, and timeframes/deadlines for short sale
- Servicers who participates in Home Affordable Modification Program (HAMP) requires to participates in HAFA program with their own written policy, consistent with investor guidelines. The policy may include factors such as the severity of the potential loss, local markets, timing of pending foreclosure actions, borrower motivation and cooperation
This new program is not for those homeowners whose loans are owned or guaranteed by Fannie Mae or Freddie Mac. If you would like to find out whether your loan is owned by Fannie Mae then click here or by Freddie Mac, then click here. These organizations will create their own program later for the borrower and servicers.
HAFA program will take effect from April 5, 2010 until December 31, 2012, but servicers may apply this program early if they meet certain requirements.
So, if you are a homeowners and having hardship, then call your lender to find out if you qualify for the Home Affordable Modification Program and if you qualifies for this program but cannot afford to keep the house then call the experienced short sale agent to help you with your short sale process. It is a good program for homeowners to avoid from foreclosure. If you are in bay area and need my help with short sale then call me at 510-366-9405.
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