What is a HAFA short sale?

HAFA, which took effect on April 10, 2010, was designed to allow homeowners who couldn’t qualify for a loan modification through HAMP to sell their home on a short sale.  See “What is Home Affordable Foreclosure Alternative program (HAFA)?” to learn more about the program eligibility and benefits.
 
Participation in the HAFA program will not allow homeowners to save their home, they will at least eliminate the effects of a foreclosure (deficiency judgement, tax liability, etc.) on a homeowner’s credit.  In other words, the bank must accept the short sale as “payment in full” and have no further recourse against the homeowner once the sale is complete.
 
*Homeowners must still meet the eligibility criteria for the HAMP program (principal residence, first-lien mortgage, serious delinquency, unpaid balance under $729,750, and a mortgage payment over 31 percent of gross income) in order to qualify for HAFA.
 
Both the homeowner and the lender receive monetary incentives to participate in the HAFA program.  There are also strict timelines associated with HAFA which must be followed to be in compliance.

*Please note that these are guidelines for HAFA short sales and are subject to change at any time.

If you have any other questions about HAFA short sales, please contact us.