Home Affordable Foreclosure Alternatives – HAFA
RELIEF ON THE HORIZON?
In light of the rising number of property foreclosures in the United States and with a reported 16% of all mortgages in trouble, the government has expanded the Home Affordable Modification Program (HAMP) to include provisions and incentives for servicers to allow short sales or deeds-in-lieu as positive options for eligible homeowners in default who wish to avoid foreclosure. While HAMP has modified almost 120,000 mortgages, it has proven to be slow and has left a large number of borrowers out in the cold. The new program is called Home Affordable Foreclosure Alternatives (HAFA). Participation in HAFA cannot save the homeowner from losing his or her property, but it can eliminate the effects of a foreclosure on the homeowner’s credit. HAFA takes effect on April 5, 2010.
HAFA provides incentives in connection with a short sale or a deed-in-lieu of foreclosure (DIL) used to avoid foreclosure on a loan eligible for modification under the HAMP program. Servicers participating in HAMP are also required to comply with HAFA. A list of servicers participating in HAMP is available at MakingHomeAffordable.gov.
HAFA applies to loans not owned or guaranteed by Fannie Mae or Freddie Mac, which will issue their own versions of HAFA in coming weeks.
Compliments of Andrew Hoffman, Mortgage Partners Santa Fe 505-629-4161
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