Esperanza Butler Earns HAFA Certification
What Is HAFA?
Home Affordable Foreclosure Alternatives (HAFA)
HAFA is a government program that provides financial incentives to Borrowers, servicers and investors who utilize a foreclosure alternative (short sale or deed-in-lieu) instead of a foreclosure sale to transfer ownership.
Ultimately, foreclosure alternatives such as those mentioned above reduce the need for expensive foreclosure proceedings for the investor and the potential harmful effects a foreclosure would have on the Borrower.
The pre-foreclosure options typically help maintain the condition of the property and therefore, the preservation / value of the property by minimizing the time a property could potentially be vacant and subject to vandalism and deterioration through lack of maintenance.
Finally, pre-foreclosure options generally provide a substantially better outcome for investors and communities through lower loss severities for investors and fewer vacant properties for communities.
The Borrower who has already explored all other options at retaining their home and failed, now have a chance at a pre-foreclosure transition with financial support. Although the actual credit rating impact varies by Borrower based on other extenuating circumstances, pursuing a HAFA short sale or deed-in-lieu could result in a less negative credit impact.
An important component of the HAFA program is that future liability for the first and second liens must be released allowing a fresh start - in other words, no deficiency.
However, there is notice to the Borrower that the short sale may have an income tax and credit rating impact and a recommendation is given that the Borrower seeks professional help regarding these matters;