The Home Affordable Foreclosure Alternatives program (aka HAFA) is supposed to help homeowners who are unable to retain their home under the Home Affordable Modification Program (aka HAMP) by providing short sale incentives and guidelines.
Here are a few highlights from the program, which begins this Monday, April 5:
- Allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).
- Requires borrowers to be fully released from future liability for the first 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 is allowed).
- Uses a standard process, uniform documents and timeframes/deadlines.
- Provides financial incentives: $1,500 for borrower relocation assistance; $1,000 for servicers to cover administrative and processing costs; and up to a $1,000 match for investors for allowing a total of up to $3,000 in short sale proceeds to be distributed to subordinate lien holders.
This 14-minute video from NAR Government Affairs digs into more details with answers to questions such as, “Are servicers required to participate in HAFA?” (2:57)
If you just can’t get enough of this stuff, you can also view the 49-minute webinar, “Understanding HAFA: The Home Affordable Foreclosure Alternatives Program,” and read through NAR’s HAFA Information Packet.