Understanding HAFA

Making Mn Homes Affordable – Are You Eligible?

What in the World is HAFA

How to Apply for HAFA

Details of HAFA

HAFA – FAQ – For Minnesota Homeowners

Understanding HAFA

New Help Has Arrived!

The rising number of foreclosures in this country is simply too big to ignore. That is why a government-backed program has been released that aims at streamlining foreclosure avoidance options.

Short sales and deeds-in-lieu are dignified solutions to foreclosure, and now the government is making them easier, quicker and more accessible through the Home Affordable Foreclosure Alternatives Program, or HAFA.

With one in six homeowners struggling to make mortgage payments, you are not alone, and there are options available. With the free report provided here, find out if you qualify for the HAFA Program. Simply fill out your information below to get started on your new chapter of financial stability.

Please read this report to learn the facts, and contact me to begin your journey to a solid, stable tomorrow.

Understanding HAFA:

New Alternatives and Available?

The Government’s Home Affordable Foreclosure Alternatives Program is here.. and you need a advocate.

You may have heard it before, but now it’s taking affect: Our Federal Government is actively trying to comat the millions of foreclosures happening across the country. To address this need for new options, an initiative is in effect called the Home Affordable Foreclousre Alternatives Program, or HAFA. While the details of what this means to the government, lenders, servicers and agents are complicated, you-the homeowner–need to clearly understand the new solutions available to you.

This report provides a straightforward explanation of HAFA and, more importantly, what it meansto you.

First: What is HAMP?

The Home Affordable Modification Program (Hamp) was introduced March of 2009 to assist homeowners whose mortgage payments were too high for their income levels(more specifically, those exceeding 31 percent of their income).

For homeowners whose mortgage payments are only slightly out of reach, HAMP can lowe the payments, allowing them to stay in their homes. Unfortunatelly for most homeowners facing financial hardship, HAMP can’t offer a large enough mortgage reduction, so most who enter the program don’t qualify or end up defaulting on the modified mortgages.

OK, so what is HAFA?

HAFA, or Home Affordable Foreclosure Alternatives, is the government’s newest program put into place to beneifit homeowners who do not qualify for HAMP assistance. Released in April 2010, this program is designed to expedite foreclosure avoidance options for homeowners in need. By promoting the swift execution of a short sale or deed-in-lieu, HAFA can potentially save millions of homeowners from the financially devasting event of foreclosure.

In a short sale, the property is sold for less than the mortgage amount in order to avoid the foreclosure process.

In deed-in-lieu of foreclosure, the property is given fully to the lender because the homeowner can no longer make payments, and the property is then sold to retrieve part of the loan balance owed.

SPECIFICS:

In order to qualify for the HAFA program, you first have to meet the intial HAMP criteria.

You Must

Be delinquent on your mortgage payment or face imminent risk of default.

Occupy the property as your primary residence:

Have a mortgage originated on or before January 1, 2009:

Have an unpaid principle balance no greater than $729,750 for a one unit property and

Have total monthly mortgage payments exceeding 31percent of your gross income.

If you meet the above criteria, but a mortgage modification still leaves you with a unfavorable mortgage. HAFA becomes your primary solution to avoid foreclousre, salvage your credit score, and move on wih dignity through a short sale or deed-in-lieu

SPECIFICS:

HAFA only applies to loans that are not owned or guarnteed by Fannie Mae or Freddie Mac. A HAFA short sale or deed-in-lieu only applies to first lien mortgage laons, but the program does offer lender incentives to assist homeowners who have multiple mortgages on their property.

How Can HAFA Help Me?

HAFA can potentially save you a lot of grief andheartach by creating a standardized processes and stting limits on how long a lender can wait to respond to short sale requests. Currently, short sales can be lenghy transactions, making it difficult for potential buyers of your home to remain in the process.

The program requires participating lenders to determine what they are willing to accept before dealing with the short sale request– similar to other pre-approval processes. This is so the lender can’t abruptly change how much money it wants to receive from the short sale. The fewer curveballs a lender can throw, the better.

HAFA also benefits homeowners by stopping a lender’s ablity to pursue a deficiency judgement after a short sale or deed-in-lieu has been completed.

SPECIFICS:

A deficiency judgement is an action taked against a debtor or borrower whose foreclosure sale or short sale did not cover the entire mortgage debt owed to the lender. A lender’s ablity to pursue this course depends on the conditions of the orginal loan.

prohibition of a deficiency judgement means your lender can’t come knocking on your door to collect the portion of the mortgage not covered by the transaction. Such protection allows you to more quickly regain financial stablity and move on with your life.

Homeowners may also receive a $3,000 incentive upon completion of a short sale.

Why Are Lenders Participating?

HAFA offers lenders an incentive of up to $6,000 for a successful processed short sale or deed-in-lieu. The lenders are not permitted to charge you—the homeowner–any processing fees or out=of-pocket expensees, and this incentive is given to them in exchange for that limitation.

The truth is, a select few lenders and mortgage servicers may not participate in the HAFA program. But despite this, a lender almost always loss more money in a foreclosure tahn in a short sale or deed-in-lieu. If a lender is convinced that a homeowner has no way of paying the current mortgage, they will be concerned with salvaging as much of their investment as possible, so short sales are generallly the best option for them as well.

What If My Agent Can’t Find a Buyer for My Home?

If you attempt a short sale under HAFA and a transaction does not close by the program deadline, the lender will receive your deed-in-lieu of foreclosure. This will provide effectively the same result for you sice either way you will have a more positive solution to foreclosure, your mortgage debt will be forgiven, your credit score will besalvaged, and you will receive the $3,000 incenive to help with moving cost.

Which Lenders Are Currently Participating?

List of Participating HAFA banks

Generally speaking, lenders who participate in HAFA are also participating in HAMP. As a CDPE, I can alwyas provide the most up-to-date list of lenders participating in HAFA,. Following is the U.S Treasury Department’s report of HAMP involvement as of January 2010

“These (HAFA) options eliminate the need for potentially lenghty and expensive foreclosure proceedings, preserve the physical condition and value of the property by reducing the time a property is vaccant, and allow the homeowners to transition with dignity to more affordable housing”

David Stevens, Commissioner of the Federal Housing Administration