Short Sale-HAFA (Home Affordable Foreclosure Alternative Program)

• Home Affordable Foreclosure Alternatives Program: Overview
  The Home Affordable Foreclosure Alternatives (HAFA) Program provides additional options to avoid costly foreclosures and offers incentives to borrowers, servicers and investors who utilize a short sale or deed-in-lieu (DIL) to avoid foreclosures.
  HAFA alternatives are available to all HAMP-eligible borrowers who:
  1. do not qualify for a Trial Period Plan;
  2. do not successfully complete a Trial Period Plan;
  3. miss at least two consecutive payment during a HAMP modification; or,
  4. request a short sale or deed-in-lieu.
  
  
  In a short sale, the servicer allows the borrower to list and sell the mortgaged property with the understanding that the net proceeds from the sale may be less than the total amount due on the first mortgage. Generally, if the borrower makes a good faith effort to sell the property but is not successful, a servicer may consider a DIL. With a DIL, the borrower voluntarily transfers ownership of the property to the servicer - provided title is free and clear of mortgages, liens and encumbrances. With either the HAFA short sale or DIL, the servicer may not require a cash contribution or promissory note from the borrower and must forfeit the ability to pursue a deficiency judgment against the borrower.
  HAFA simplifies and streamlines the short sale and DIL process by providing a standard process flow, minimum performance timeframes and standard documentation.

A. Short and simple all you need to know about the HAFA short sale program -

1. Homeowners who qualify for a HAFA short sale are fully released from future liability for the first mortgage debt. This means that the mortgage lender cannot come after the homeowner at any future time for repayment of the original loan.

2. A HAFA short sale allows for a $3,000 relocation assistance payment for homeowners. That's a one-time payment of up to $3,000 to help sellers with moving costs, rent security costs, etc.

3. Most major lenders are already on board with the new HAFA rules, including Citibank, Wells Fargo, Bank of America, Wachovia, Chase, , and the list continues to grow.