To HAFA or Not to HAFA?

Real Estate Agent with Ask4Ferguson - Your House-SOLD Name in Real Estate

I attended a Continuing Education Course on Short Sales this past week put on by Joel Zieve.  Joel is a full time short sale negotiator in Michigan.  During the class he put out phenomenal information that banks and other institutions could never teach you due to they are in the business of protecting their banks assets and not looking out for the best interest of the seller in distress or for that matter the Realtor who is trying to help them out.


One subject that was brought up was HAFA (Home Affordable Foreclosure Alternatives).  I will be very brief on some the pros and cons of the program.  If you would like more in depth information, please contact myself or I can put you in touch with Joel himself.


Basically HAFA provides an option for homeowners who are unable to keep their homes thru the existing Home Affordable Modification Program (HAMP).  HAFA provides incentives in connection with a short sale or a deed-in-lieu of foreclosure (DIL) used to avoid foreclosure on a loan eligible for modification under the HAMP program.


The advantages of HAFA are:

1.        1st mortgagee waive deficiency.

2.       1st Mortgagee orders appraisal/BPO Up Front (so you know what they will accept)

3.       Guaranteed 6% commissions

4.       Uses standardized processes, documents, timeframes/deadlines

5.       Seller receives up to $3000 at closing


The disadvantages:

1.        If the short sale is denied, or house does not close within 120 days, seller is forced to accept a deed in lieu of foreclosure (if you are a realtor it terminates your listing agreement)

2.       Seller must continue making payments at 31% of gross income (and yes I did say GROSS!)

3.       Seller must still live in house

4.       2nd mortgagee must accept 6% of balance (up to $6,000) and settle account with no deficiency.

5.       Seller must first apply for HAMP first

6.       Property must be in (and kept in) ‘’good condition”

7.       Seller must continue to pay utilities, assessments and association dues.


Again, this is just a brief outline of what you can expect with a HAFA program.  As agents that work with short sales (and you should in this market) you must educate yourself with the HAFA program.


For more information and free reports about the foreclosure process and short sales, please visit


Enjoy your day and keep on keepin on!



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Cindy Jones
Integrity Real Estate Group - Woodbridge, VA
Pentagon, Fort Belvoir & Quantico Real Estate News

BoA just offered one of my clients the HAFA option.  They had to turn it down before they would move on with the short sale process.

Jun 20, 2010 01:20 PM #1
Mike Linkenauger
Jacksonville, FL
Short Sale Specialist Network

HAFA has been a big bummer, but we expected alot of this.  Hopefully the new guidelines will help some.  As one of the new HAFA program guidelines that went into effect Feb. 1st, 2011, the 31% debt to income ratio does NOT need to be proven by the borrower.  In other words, it is like a "stated income short sale" to some degree!  Pretty good news for the program.  We have a great discussion and info group for the HAFA short sale program, and we are releasing an updated HAFA guide next week as well -

Mar 02, 2011 05:10 PM #2
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L. Scott Ferguson

Sunny Florida Real Estate Professional
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