Home Affordable Foreclosure Alternative Program

Taking effect on April 5th- the US Treasury department will put into effect the HAFA program. This program is to help struggling home owners to streamline the short sale or Deed in Lieu of Foreclosure processs. This program provides incentives to mortgage services, bank investors and to the borrower for relocation assistance.

Currently- depending on the bank who has to approve the short sale- an approval can take up to 8 months. During the time- the potential buyer may have moved on to another home, forcing the property back on the market.

The HAFA program has specific timeframes and will speed up the short sale process.  In order to take advantage of the HAFA program, the property and seller must have gone thru the HAMP (a loan modification program), have been found ineligible. The seller must wait 30 days and then the bank will approve the short sale and determine the price at which the home can be sold. Once the home is approved- it can be released on to the market as a HAFA approved short sale- and once a purchase contract is received- the bank then has 14 days to sign off on the contract and allow the sale.

The other benefit to this program is that the seller is released from future liability for the mortgage debt. (no promissory notes, cash contributions or deficiancy judgements will be issues by the lien holder)

While this program has it’s benefits- both to the seller and the potential buyer- the banks will now be determing at what price the home can be sold. This takes away the negotiating power of the potential buyer for these homes.

If you have any questions on this program- how to qualify, the banks/loan servicers participating in this program, etc- please contact me directly. (lisa@landdgroup.com)

As always- I welcome your comments and thoughts!