What is HAFA?
HAFA stands for Home Affordable Foreclosure Alternatives Program which offers incentives to homeowners, their mortgage servicers and the investors for completeing a short sale or a deed-in-lieu of foreclosure. The homeowner incentive can be $3000 to help with relocation costs.
A short sale is a sale of a mortgaged home in which the net proceeds of the sale may be less than the total amount due on the first mortgage.
A deed-in-lieu is a voluntary transfer of ownership of the property to the servicer— provided the title is free and clear of additional mortgages, liens, and encumbrances. A deed-in-lieu of foreclosure may be considered by the servicer when the homeowner has not been successful in short selling the property.
The HAFA program is part of the Making Home Affordable Program (HAMP) - the Obama Administration's plan to get the housing market back on track. By August 1, all Fannie Mae and Freddie Mac servicers must incorporate Home Affordable Foreclosure Alternative (HAFA) into their operations and offer HAFA solutions such as short sale and deed-in-lieu options to eligible borrowers. Fannie and Freddie stipulate that HAFA can be applied only after “all other home retention workout options have been exhausted.”
What are the Benefits of HAFA Participation?
1. $3000 incentive to homeowner to assist with relocation costs.
2. Lender will release borrower from all liability for repayment of first mortgage debt.
Do I Qualify?
Your loan may meet the eligibility requirement if you can answer "yes" to the following questions:
1. Is this loan for my primary residence?
2. Is my mortgage loan delinquent or is default reasonably foreseable?
3. Is the current unpaid principal balance equal to or less than $729,750?
4. Is the mortgage loan a first lien mortgage originated on or before January 1, 2009?
5. Does my total monthly mortgage payment (principal and interest only) exceed 31% of my gross monthly income? Run the Calculations HERE.
View the example below. This individual does not qualify.
