HAFA Update 2012 - Major Changes made.

Managing Real Estate Broker with Property Management & Sales at REALTY WORKS TEMECULA, CA 92590 (951) 217-6745 01233850

HAFA Update 2012 - Home Affordable Foreclosure Alternative Extended another year!HAFA UPDATE 2012

Friday, March 9th 2012, the Obama Administration announced major updates to the Home Affordable Foreclosure Alternative (HAFA) program. Created in 2009, HAFA is a government-sponsored (US Treasury) initiative assisting all Home Affordable Modification Program (HAMP) eligible homeowners in avoiding foreclosure through the short sales process & deed-in-lieu program.

These new  HAFA updates will be effective as of June 1, 2012, and will allow more distressed homeowners to seek assistance. Most importantly, the deadline for submitting for HAFA eligibility will be extended a full year, to December 31, 2013.

March’s 2012 updates to the HAFA program include:

  • The removal of occupancy requirements. Previously, HAFA required homeowners to have lived in the property within the last 12 months.
  • $3,000 relocation incentives will be limited to properties occupied by an owner or tenant at the time of the short sale.
  • Mortgage payments will be allowed to exceed 31% of the homeowner’s gross monthly income. This update will allow a homeowner to stay current on her mortgage and still qualify, minimizing the overall impact to her credit.
  • Secondary lienholders may receive up to a maximum of $8,500, up from $6,000 previously.
  • And one of the most dramatic changes: The Credit Bureau Reporting will be Account Status Code 13 (paid or closed account/zero balance) or 65 (account paid in full/a foreclosure was started), as applicable.

With these updates, a homeowner can be current on their mortgage, qualify for HAFA, continue to make their payments, and execute a short sale with minimum impact on their credit!

Contact Sidney Kutchuk, Temecula Certified HAFA Short Sale Agent 951-215-6745


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Dan Hopper
Keller Williams Realty Downtown LLC - Denver, CO
Denver Realtor / Author / Advocate/Short Sale

It is a shame that too many 2nd lien holders normally do NOT like to participate in the HAFA.  Yet, when they are the 1st lien holder, they will.  Once, in that 2nd position... they take a completely different attitude about "waiving" their rights of recourse!!  It is very ignorant for them to move in that direction.  They would be better off to take the HAFA allowable funds, and waive their right to recourse.  Most times the borrower will file a BK 7 and wipe out their attempts to collect an unsecured debt! (Yet, let's face it... we had a HAFA approved 1st lien with BOA, and FNMA would only allow 6% towards the 2nd's outstanding balance... that is a joke!)  A 2nd lien holder can sell their note to a 3rd party collector at 8-12 cents on the dollar!!  Needless to say. the HAFA approval ended up being denied since the 2nd lien holder would not participate!

So, will this improve the short pay-offs?  Probably not!

Mar 15, 2012 12:55 AM #1
Sidney Kutchuk
Property Management & Sales at REALTY WORKS TEMECULA, CA 92590 (951) 217-6745 - Temecula, CA
Property Management & Sales Experts 951-217-6745


By increasing the amount allowed to be paid to  a jr lien holder more HAFA deals will be approved. HAFA is an option and if the jr lien holder has to be paid more the seller can opt out of HAFA and go for a standard short sale.

Mar 15, 2012 01:06 AM #2
Bas Panch
SCV Home Buyer - Valencia, CA

Hi Sidney. Thanks for sharing this very helpful post and making HAFA easier to understand. You are definitely a top Temecula Short Sale Agent! Keep up the good work.


Mar 22, 2012 11:42 AM #3
Katerina Gasset
Get It Done For Me Virtual Services - Wellington, FL
Get It Done For Me Virtual Services

Good morning, Sidney. Great update on HAFA. You really know your stuff. You are an inspiration not only to lots of clients & short sale specialists out there but also to temecula short sale agents. You're doing a great job. Keep it up, Sidney. Thanks for sharing. 

Mar 23, 2012 07:49 PM #4
Kim & Kristine Halverson
www.LiveWorkSiliconBeach.com, Santa Monica Real Estate :) - Santa Monica, CA

Great Blog Sidney. Thanks for sharing this very helpful post .Its alot easier to understand now.Definitely a top notch.


Mar 26, 2012 02:41 AM #5
Edward Garcia
Great update.
Apr 05, 2012 03:09 AM #6
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Sidney Kutchuk

Property Management & Sales Experts 951-217-6745
Avoid foreclosure,ask me about your many no cost options
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