There is a newer government-sponsored program called HAFA (Home Affordable Foreclosure Alternatives) that helps homeowners who are want to sell their home as a short sale. A short sale is a situation in which the homeowner owes more in liens and such than the value of the property. Basically, they are upside down on their mortgage and/or other liens on the property and/or cost of selling. HAFA was initiated by the U.S. Treasury Department under the Obama Administration.
The program allows homeowners, who are provided with incentives that will help them take advantage of either a short sale, in which the borrower and the lender or loan servicer agree to sell the home for less than the value of the loan; or a deed-in-lieu of foreclosure, in which the homeowner voluntarily gives the deed of the property to the lender or loan servicer.
HAFA helps homeowners who qualify sell their homes by giving them pre-approved short sales terms before listing the property. They are fully released from future liability for the first mortgage debt, and can receive $1,500 for borrower relocation assistance. Investors and servicers can also receive financial assistance through the program for administrative costs, processing fees, etc.
The program has many rules and guidelines, so if interested, it is important to find out if you qualify for this type of incentive. For example, the home has to be a primary residence. I found these 2 articles to be particularly informative: http://makinghomeaffordable.gov/hafa.html and http://hafa-program.com.
If a homeowner does not qualify for HAFA, they can still sometimes sell their home as a regular short sale. So, there is still hope even if the HAFA program is not an option.
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