What In the World Is HAFA?
Right now, more than 1 in 7 mortgages is currently not being paid. So, take your neighborhood, your street and look around. At least one of your neighbors isn’t paying their mortgage, and it’s probably more. To make things worse, almost a quarter of all mortgages are underwater. The owners owe more than what the home is worth today.
Now, the government has created the Home Affordable Foreclosure Alternatives, or HAFA, program to help homeowners who can’t afford their mortgages. It’s goal is simple: to keep as many homeowners out of foreclosure as possible through the use of Short Sale and Deed-in-lieu, two foreclosure alternatives.
A short sale happens when the lender accepts the sale price of a home even when that amount is less than what is owed on the mortgage. This allows the current homeowner to sell the property to a new homeowner, preventing the home from becoming vacant.
In a Deed-in-Lieu, the homeowner signs the property back to the lender in an agreement that allows the lender to sell the property after it is vacated and regain part of their investment. Both of these options allow the homeowner to avoid the difficult foreclosure process.
Here’s how HAFA works.
1. HAFA sets a structured time frame on the short sale process, eliminating unnecessary delays that often lead short sales to failure.
2. HAFA also provides cash incentives to the lender and homeowner for a successful short sale or deed-in-lieu. And it’s real money. $3000 for the homeowner. This makes the transaction more appealing to both parties.
3. Then, in order to help homeowners move on with their lives, HAFA prohibits the lender from collecting the leftover mortgage balance after the short sale has been completed.
HAFA is a major step forward in foreclosure avoidance. But homeowners must meet certain qualifications to be eligible for the program. To learn if you’re eligible and what the details of the plan are, contact me today at 619-741-0111.
