HAFA Compliments HAMP

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The real estate industry is abuzz about the Obama Administrations recent introduction of the Home Affordable Foreclosure Alternative Program (HAFA). Many homeowners/borrowers are confusing HAFA with the Home Affordable Modification Program (HAMP).

HAFA is a program designed for homeowners who don’t qualify for a loan modification under HAMP. Under HAFA, homeowners may be able to avoid foreclosure by selling their homes in a short sale or by transferring title to the lender through a process called a “deed-in-lieu of foreclosure”.

HAFA compliments the HAMP program because it provides the homeowners/borrowers who may be HAMP eligible but for some reason are not able to keep their homes, a viable alternative to foreclosure.

The new streamlined process allows homeowners/borrowers to receive pre-approved short sale terms from their lenders as opposed to submitting an offer and waiting months for an approval that may never come. The terms must include the minimum acceptable net proceeds and allowable closing costs. Now that’s a novel idea.

If a short sale is approved under HAFA, the homeowner/borrower is not allowed to contribute any cash as a condition to close the escrow. In fact, the homeowner is given $3000.00 for relocation assistance.

All homeowners/borrowers are released under HAFA of any further obligation to repay the debt. That’s right. Under HAFA, lenders are not allowed to ask the homeowner to sign a promissory note and they are prohibited to pursue a deficiency judgment! The lender, under HAFA can no longer go after the homeowner for the short fall!

If any of these programs can help you or someone you know I strongly suggest that you go on-line for details at Financial/Stability.gov. In my 30 year career I have never seen a time when a knowledgeable Realtor was more important. The decisions faced by today homeowners, from using the correct forms, timing, the program one chooses taxes or no taxes, can make or break ones financial future.

Seeking the advice of a knowledgeable real estate professional is a matter of good home dollars and Sense