The Series on The Top Ten Short Sale Questions Asked By Houston & Spring TX Sellers
Continues With Question #7: What is a HAFA Short Sale?
In February 2009, the Government introduced the Making Home Affordable Program (Click Here to learn more) — a plan to stabilize the housing market and help struggling homeowners stay in their homes. One of the possible ways to help families stay in their homes is to modify mortgages to make them more affordable through a program called the Home Affordable Modification Program or HAMP.
While many families have received help through HAMP, far too many won’t be able to keep their home even with a loan modification. For these families, the Treasury Department has established a new short sales program called the Home Affordable Foreclosure Alternatives Program or HAFA. HAFA is designed to streamline short sales by providing a uniform process and standard forms, as well as incentives for families and their mortgage servicers to complete the process. It offers homeowners who sell their homes under HAFA $3,000 to help cover their moving costs. HAFA may be able to help you through the difficult process of selling your home and moving to another home.
Who is eligible for HAFA? (New policies effective: June 1, 2012)
- Occupancy Requirements
There are now no occupancy requirements and borrower cannot have purchased a residential property in previous 12 months.
- Relocation Assistance
$3,000 relocation incentives are limited to owner or tenant occupied properties at the time of short sale.
- Mortgage Payments and Debt/Income Ratio
Mortgage payments may now be allowed to exceed 31% of gross monthly income if it keeps the homeowner current on their mortgage (at borrowers request).
- Secondary Lienholders
Secondary Lienholders may now receive a maximum of $8,500.
- Credit Bureau Reporting
Credit Bureau Reporting will now be “Account Status Code = 13 (Paid or closed account/zero balance) or 65 (Account paid in full/a foreclosure was started) as applicable.
The program:
- Offers homeowners who sell their homes under HAFA $3,000 to help cover their moving costs.
- Complements HAMP by providing a viable alternative for borrowers (the current homeowners) who are HAMP eligible but nevertheless unable to keep their home.
- Uses borrower financial and hardship information already collected under HAMP.
- Allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).
- Prohibits the servicers from requiring a reduction in the real estate commission agreed upon in the listing agreement (up to 6%).
- Requires borrowers to be fully released from future liability for the fi rst mortgage debt and, if the subordinate lien holder receives an incentive under HAFA, that debt as well (no cash contribution, promissory note or deficiency judgment.
As a Certified Distressed Property Expert (CDPE), I am uniquely qualified to walk distressed homeowners through the many foreclosure alternatives that are available. If you or someone you know could use my help, call me today or visit my website to set up a free, confidential consultation. Together, we will work to the best possible solution for any situation.
Previous Posts In The Series on The Top Ten Short Sale Questions Asked By Houston & Spring TX Sellers:
Question # 6: Will A Loan Modification Help Me?
Question # 5: How Does A Divorce Affect A Short Sale?
Question #4: How Will A Short Sale Affect My Taxes?
Question #3: How Does A Short Sale Affect My Credit?
Question #2: Why Should I Do A SHort Sale?
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