The South Coast Real Estate Round-Up

Distressed Homeowners find help in HAFA program

July 16th, 2010 9:58 AM by Christopher Terry

When you are a homeowner in distressed its hard to know who or where to turn for help. Between the phone calls and the letters who do you trust? Where can you get unbias answers to your questions?

The Treasury Department and HUD can help. On April 5, 2010 HAFA was launched. The purpose of HAFA (Home Affordable Foreclosure Alternative program) is to give homeowners who qualify for HAMP (Home Affordable Modification Program) but are unable to keep their home a viable option to foreclosure.

So why is HAFA such a great option for homeowners who qualify?

Let's review the HAFA program and provisions:

  • The program compliment HAMP, homeowners who are eligible for HAMP but nevertheless unable to keep their home.
  • The program uses the financial and hardship information collected in connection for consideration of a loan modification. (This saves the homeowner time and frustration.)
  • Program allows the homeowner to get PRE-APPROVED short-sale terms BEFORE listing the property. (This can drastically shorten the time frame to actually close compared to a non HAFA short sale.)
  • Requires that Lenders who participate in HAMP to also participate in HAFA. The program requires that borrowers be FULLY RELEASED from future liability for the first mortgage debt. (1st mortgage only, no cash contribution, promissory note, or deficiency judgement is allowed.)
  • Program sets up a standard system for processes, documentation, and timeframes/deadlines.
  • Program provides financial incentatives:
    • $3,000 for borrower relocation assistance;
    • $1,500 for servicers to cover administrative and processing costs;
    • Up to $2,000 for investors who allow a total of up to $6,000 in short sale proceeds to be distributed to subordinate lien holders, on a one for three matching basis.
  • All servicers who participate in HAMP are required to implement HAFA in accordance with their own written policy, consistent with investor guidelines.

Watch a short video that explains HAFA, and visit the FAQ and Resource pages at  Or call Christopher Terry for a FREE 1 hour consultation.

Posted in:General
Posted by Christopher Terry on July 16th, 2010 9:58 AM


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