Home Affordable foreclosure Alternatives Program is just one of the programs available to Home owners seeking help from foreclosure. Lori Bowers did a great job on this article.
Take note, H A F A, are four letters you are certain to hear more about in the coming months. What in the world is HAFA? It is the short sale agreement form used by the U.S. Treasury Department and President Obama's Administration, which stands for Home Affordable Foreclosure Alternatives program.
HAFA provides additional options to homeowners and lenders to avoid costly foreclosures by offering incentives to borrowers and banks who utilize a short sale or deed-in-lieu to avoid foreclosures.
HAFA is not a law but rather guidelines for banks to follow if they choose to. HAFA was created as an option for homeowners who have been determined not to qualify for the Home Affordable Modification Program (HAMP).
Who qualifies for HAFA? Beginning April 5 the Treasury Department's rules state that qualification will be for primary residences only. Additional criteria will be for loans originated prior to Jan. 1, 2009, and are less than $729,750. Homeowner's must be delinquent on their mortgage or close to it and the total monthly mortgage payment must exceed 31 percent of before-tax income. Freddie Mac and Fannie Mae loans do not qualify for the program but they are expected to release similar guidelines.
Homeowners who do not qualify for the modification trial period under HAMP or don't successfully complete the trial period would be able to pursue the HAFA short sale plan. In other cases, the homeowner's Realtor can request an alternative request for approval of sale (ARASS) from the mortgager to help avoid a foreclosure.
Here is the best part of HAFA: lenders are forbidden from pursing the borrower for any portion of the first mortgage debt and they can not ask for a cash contribution or promissory note! The homeowner may also be eligible for up to $1500 in moving costs through HAFA.
Please contact me for additional information on this program or any other short sale questions.
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