What’s Happening with HAFA?

by Five Fantastic Lawyers™ on July 9, 2012

The following is a guest blog post regarding HAFA in the US.

If you have done any prior research regarding short sale incentive programs, then you may have heard of the Home Affordable Foreclosure Alternatives (HAFA) program.  What this program does is assist homeowners who are considering short sales or a deed in lieu (DIL) of foreclosure, in order to avoid foreclosure on their homes.  HAFA was created back in 2009, but has seen some change in recent months.  The new updates announced by the Obama Administration took effect on June 1 of this year.

According to the most recent Making Home Affordable Report published in April 2012, there have been a whopping 44,749 HAFA agreements completed since the program began.  Some experts say that this is not as much as was expected, but that is still a great deal of homeowners who were able to take advantage of the program.

Through the recent updates, it appears that now even more homeowners will be able benefit, as the changes have addressed some important deficiencies in the original program, such as second lien-holder compensation.  Here is a sample of some of the key changes:

  1. Most importantly, homeowners considering a short sale now have until the end of 2013 in order to submit a short sale agreement and become eligible for the program.  The homeowner could also submit a request in writing in order to be considered for a short sale agreement and still be eligible.
  2. In the original program, HAFA required that any homeowner participating in the program had to actually be living in the home they wished to short sale and it was deemed their primary residence, or they at least had to have lived on the property within the 12 months prior.  With the new HAFA updates, these requirements no longer exist.
  3. HAFA’s original program set 2nd lien compensation at $6,000.  Now; however, that number has changed to $8,500.
  4. Finally, the HAFA updates dictate that if a homeowner makes a request to make a full payment on their loan in order to stay up-to-date on that loan, the mortgage lender can accept it.  Why is this important?  Because staying up-to-date on their loan while going through the short sale process will allow a homeowner to maintain their credit rating.  While a homeowner’s credit will be affected slightly after the short sale, it will not take as much of a hit as long as the homeowner stays current with their lender.

HAFA is an excellent incentive program for any homeowner hoping to avoid foreclosure.  Plus, it could provide qualified participants up to $3,000 at the close of escrow in order to assist with any moving expenses.  If you are interested in selling your home and qualifying for HAFA, the best thing that you can do is contact a short sale specialist in the Las Vegas area today.

Charity Jackson is a freelance writer who wrote this article about HAFA for Short Sale Las Vegas experts Rothwell Gornt. Check out the Rothwell Gornt blog for more about Short Sales and Las Vegas real estate.

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