The Home Affordable Foreclosure Alternatives Program (HAFA) is a government-sponsored program aimed to provide additional alternatives to foreclosure. Aside from loan modification (the government’s HAMP program) and underwater refinance (the government’s HARP program), the Treasury has also provided options for distressed borrowers through short sale and deed-in-lieu of foreclosure. This program is a little bit tricky, and you really need to understand the ins and outs when speaking with mortgage servicers about a HAFA short sale.
I received a call the other day from an agent that was having trouble with his short sale processing, particularly with the second lien holder. Apparently, the second lien holder said that he would agree to the short sale if (and only if) he received the $8500 allowed through the Treasury’s HAFA Program. Apparently, this negotiator was a little overzealous and under-informed. It’s true that the Treasury has made some changes to the Program guidelines; however, changes are not required to be put into play by the mortgage servicers/participants until June 1, 2012. (And, the thing about the $8500 is not quite as it seems.)
Check out or download this handy chart in order to learn more about how HAFA is going to be changing in a few short weeks (and also check out the line about the $8500).
Photo: James Bowe