The Home Affordable Foreclosure Alternatives (HAFA) Program is a recent supplement to the Making Homes Affordable Program that was implemented earlier this year. HAFA was released November 30, 2009 and provides additional options to avoid foreclosures plus also offers incentives to borrowers and investors who utilize a short sale or deed-in-lieu.
This plan goes into effect April 5, 2010 and ends December 31, 2012. Borrowers who have mortgages through Freddie Mac and Fannie Mae, as well as those held by 14 mortgage servicers, including the five largest fall under these new guidelines. The plan also provides incentives to borrowers. If you complete a short sale you will be released from all mortgage debt and receive $1,500 in moving expenses. The plan allows the borrower to obtain a pre-approval for short sale conditions before their home is put on the market. Currently, servicers will not discuss acceptable terms until an purchase contract has been received.
HAFA has also streamlined the documents used during a short sale. One standard set of documents will minimize the complexity of short sales and the time it takes to complete a short sale. Caps have also been set for payments to subordinate lien holders (second mortgages). Previously these mortgage companies wanted large payments to release their claim, thus blocking a successful short sale. Another change is that lenders will now have only 10 days to approve or reject a short sale once a complete package is presented.
There are many more changes that you can read about in the Home Affordable Foreclosures Alternatives guidelines. REVATS has helped real estate agents with marketing and closing short sales. If you would like help in this process, please contact us.
