If your attempts to refinance or modify your mortgage were unsuccessful and you’ve made the decision to transition to more affordable housing, the Home Affordable Foreclosure Alternatives (HAFA) program is designed for you.
HAFA streamlines the timeframe for Shot Sale approval by standardizing the process and establishing minimum performance guidelines. In addition, sellers can receive up to $3000 to help them move into a new residence
The HAFA Program offers you two options for transitioning out of your mortgage: a Short Sale or a Deed-in-Lieu (DIL) of foreclosure. In a short sale, your mortgage company allows you to sell your home for less than you currently owe (to learn more about Short Sales, Click here to go to our Short Sale Qualification page).
With a Deed-in-Lieu of Foreclosure, your mortgage company permits you to give the title back. This is accomplished by signing a Grant Deed or Quitclaim Deed in favor of the mortgage company, thereby transferring ownership of the home to them (to learn more about Deeds-in-Lieu of Foreclosure, click here to go to our Deed-in-Lieu of Foreclosure page).
In either scenario, HAFA offers benefits favorable to the vacating homeowner, including:
- A HAFA short sale completely releases you from your mortgage debt after selling the property. Any remaining balance is forgiven by the bank
- In a HAFA short sale, your mortgage company works with you to determine an acceptable sale price.
- HAFA has a less negative effect on your credit score than foreclosure or conventional short sales.
- When you close, HAFA may provide up to $3,000 in relocation assistance.
The general HAFA eligibility guidelines are set forth below:
- SPACIAL NOTE: HAFA has been extended to December 31, 2013, but Freddie Mac’s participation ended on December 31, 2012. If Freddie Mac owns your loan and and you’re seeking transition assistance please click here to go to our California TAP (Transition Assistance Program) Page.
- You must have a documented financial hardship.
- You have not purchased a new house within the last 12 months.
- Your first mortgage balance is less than $729,750.
- You obtained your mortgage on or before January 1, 2009.
- You must not have been convicted within the last 10 years of felony larceny, theft, fraud, forgery, money laundering
or tax evasion in connection with a mortgage or real estate transaction.
