What is HAFA...Home Affordable Foreclosure Alternatives Program. The effective date for the updated HAFA program is April 5th 2010. What does it do...
- HAFA compliments HAMP (Home Affordable Modification Program) by providing eligible HAMP borrowers with other options in the event that are still unable to keep their homes
- Uses borrowers financial and hardship information that has already been collected by HAMP
- Allows borrowers to receive pre-approved short sale terms before the property is listed including net proceeds and acceptable closing costs
- Requires borrowers to be fully released from future liability for the first mortgage. If a subordinate lien holder receives an incentive under HAFA that debt is fully released also. This means there is no cash contribution, promissory note or deficiency judgment for the borrower. BIG PLUS for borrowers!
- It uses standard processes, uniform docs, and time frames/deadlines
- Provides financial incentives to borrower of $3000 for relocation assistance, $1500 for administrators to cover administrative costs and up to $2000 match for investors who allow a total of up $6000 in proceeds to be distributed to subordinate lien holders
- Requires all servicers participating in HAMP to implement HAFA in accordance with their written policy, consistent with investor guidelines
- Implementation deadline for servicers is April 5th, 2010. Program ends on Dec. 31st 2012.
Who is eligible? The borrower must meet the following:
- Borrower must meet the basic eligibility criteria for HAMP
- The property must the principal residence. In some cases the property may be vacant fo 90 days before the date of the SSA (Short Sale Agreement), ARASS (Alternative Request for Approval of Short Sale) or DIL (Deed In Lieu)
- First lien must be originated before 2009
- Delinquent mortgage or default is reasonably foreseeable
- Unpaid balance is no more than $729,750 (higher limits do apply for 2-4 units)
- Borrower's total monthly payment is more than 31% of gross income.
For more information go to www.realtor.org/shortsales