What in the World is HAFA

HAFA was introduced to simplify and streamline the short sale process. HAFA accomplishes this by utilizing

standardized forms and by setting forth strict timeframes that both the servicer and borrower must adhere

to. The following is a 6-step summary of this streamlined process:

1. Servicers must consider HAMP eligible borrower for HAFA within 30 days of the date the borrower:

• Does not qualify for trial period plan

• Does not successfully complete trial period plan

• Is delinquent on HAMP modification by missing at least two consecutive payments

• Requests a short sale or Deed-in-Lieu

2. Servicer must proactively notify the borrower in writing of the availability of a short sale and

deed-in-lieu

•Servicer allows borrower 14 days to contact them with interest in these options

•After this timeline servicer has no further obligation to extend the HAFA offer

3. Servicer issues Short Sale Agreement (SSA) along with Request for Approval of Short Sale (RASS)

Document

• The servicer will send documents either proactively or at the request of the borrower

4. Once SSA is issued the borrower must sign and return SSA within 14 days of its effective date,

along with real estate broker listing agreement and information regarding subordinate liens

• Borrower is allowed 120 calendar days from SSA effective date to obtain a contract

• Can be extended up to one year with servicer approval

5. Within three days following the receipt of an executed purchase offer, the borrower (or listing

broker) must submit a completed RASS to the servicer

6. Servicers have 10 days to accept or deny a short sale request (RASS)

HAFA is the only program that gives you cash for avoiding foreclosure through a short sale

or deed-in-lieu of foreclosure. If you complete a short sale or deed-in-lieu, then up to $3,000

in Borrower Relocation Assistance may be available to aid in your transition. The biggest

gain of HAFA, however, is that it helps you get your life back if you feel like there are no

other solutions when faced with foreclosure.

What’s in it for the Homeowner?

Homeowners qualify for $3,000 in Borrower Relocation Assistance

• Will be deducted from gross sale proceeds at closing

• May classify as taxable income in some cases

Why Would my Lender Participate in HAFA?

Lenders and servicers receive $1,500 in administration and processing fees for each

successful short sale transaction under HAFA guidelines

• Servicer may not charge borrower any processing fees and MUST pay all out-ofpocket

expenses

If I Have More Than One Lien Holder, Why Would They Release My Debt?

Under HAFA, subordinate lien holders receive up to $6,000 to release liens

What Motivates Investors to Buy a Short Sale?

Investors are given $2,000 for subordinate lien holder payoff as well as a great deal on a

properly maintained property

• For every three dollars spent to release liens (up to $6,000) investor is

reimbursed one dollar (up to $2,000)

Although the HAFA program is aimed to simplify the short sale process, HAFA itself, can

often be a difficult and confusing process to understand. Here are just a few things to keep

in mind when considering HAFA as an alternative to foreclosure:

1. The lender waives rights to seek a deficiency judgment, absolving the

borrower of their debt

2. The servicer must assess the property value and cannot charge the borrower

in advance

• May be added to outstanding debt if transaction is not completed

3. The servicer must review title and cannot charge the borrower in advance

• May be added to outstanding debt if transaction is not completed

4. Servicer must notify borrower of short sale and deed-in-lieu as foreclosure

avoidance alternatives, acting in the borrower’s best interest and seeking a final