Home owners whose mortgage payments are unaffordable and who are interested in transitioning to more affordable housing may be eligible for a short sale or deed-in-lieu of foreclosure through the Home Affordable Foreclosure Alternatives (HAFA) Program. HAFA is offered through MakingHomeAffordable.gov, a program of the Departments of the Treasury & Housing and Urban Development.
A short sale is a transaction in which the lender agrees to accept less than the mortgage amount owed by the current homeowner. The benefit of a HAFA short sale is homeowners are no longer responsible for the difference between what they owe on the mortgage and the amount that their home sells for. HAFA provides servicer, seller, and junior lien holder incentives for these transactions and is designed to simplify and streamline use of short sales and deeds-in-lieu of foreclosure.
HAFA is available for mortgages that are owned or guaranteed by Fannie Mae and Freddie Mac or serviced by Home Affordable Modification Program (HAMP) SM participating servicers – find a list at http://www.makinghomeaffordable.gov/get-assistance/contact-mortgage/Pages/default.aspx.
For eligibility requirements and more information on mortgage assistance, call (888) 995-HOPE (4673). Counselors will help you understand your options, design a plan to fit your situation, and prepare your application. This 24-7 service is free and available in more than 160 languages.
On May 25, 2011, the Treasury Department released the HAFA Alternative Request for Short Sale (Non-Profit Purchaser) form removing certain “arm’s length transaction” requirements for short sales. The change will increase the number of eligible borrowers and offer more individuals the opportunity to stay in their homes.
For more information visit http://www.makinghomeaffordable.gov/Pages/default.aspx.
Sources: www.makinghomeaffordable.gov, realtor.org.
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