For homeowners who are no longer able to make monthly mortgage payments, there is a viable, affordable solution. In order to avoid foreclosure on your home if you are experiencing financial difficulty or distress, a good alternative is participating in the HAFA® program. The Home Affordable Foreclosure Alternatives program is available specifically for you and other homeowners now facing pending or possible foreclosure proceedings.
Advantages Offered to Homeowners by HAFA
HAFA currently offers two transitional methods enabling homeowners to sell their homes while avoiding foreclosure. One method is a short sale and the second is a Deed-in-Lieu (DIL) of a foreclosure proceeding. With a short sale transaction, your mortgage company permits you as owner to sell your home for a sale price lesser than (or “short” of) the balance you currently owe on your mortgage. With a DIL agreement, you are allowed to transfer your home property title, and thus its ownership, back to your mortgage company. The HAFA program includes provisions that make it a beneficial choice for many homeowners facing foreclosure, including the following advantages:
- With HAFA participation, you as homeowner can obtain free information and advice from well-informed counselors and licensed experts in the real estate industry who are all approved by HUD.
- When you enter into a HAFA short sale, you are released from all mortgage debt as homeowner after completion of your home sale. You are no longer obligated to pay the amount falling short of the total balance you formerly owed on your house. The agreement servicer guarantees waiver of payment of your mortgage balance due.
- When you are engaged in a HAFA short sale for your home property, you and your current mortgage company or servicer will work together to determine and agree upon an appropriate home sale price.
- HAFA is much kinder to your credit score than either a traditional short sale or a foreclosure proceeding will be.
- On your closing date, HAFA may grant you $3,000 for the purpose of your relocation.
How to Determine Your Eligibility for the HAFA Program
Basic criteria necessary for qualifying for the HAFA program as a homeowner includes the following requirements:
- You are experiencing financial problems or hardship that has been documented.
- You have not bought a home property during the past year.
- The amount you owe for your first mortgage equals or is less than:
- $729,750 for single-family-home owners
- $934,200 for 2-family-home owners
- $1,129,250 for 3-unit home property owners
- $1,403,400 for 4-unit home property owners.
- You acquired this mortgage on or prior to January 1, 2009.
- Your home property has not been condemned.
- You have not been convicted of felony larceny, fraud, money laundering, forgery, tax evasion or theft relative to a realty property transaction or mortgage during the past ten years.
How to Apply for the HAFA Program
Assistance through HAFA is currently available to homeowners with mortgages that Fannie Mae and Freddie Mac own or guarantee and mortgages through upwards of 100 servicers that are HAMP® (Home Affordable Modification Program) participants. Often, mortgage companies working with homeowners for the first time will encourage these property owners to seek other options for funding assistance before applying for acceptance by the HAFA program. When you as homeowner and your mortgage company agree that you should apply to HAFA, you can then submit an RMA form (Request for Mortgage Assistance). In the event that you have already received an offer or multiple offers, you may be required to also submit an Alternative RASS (Alternative Request for Approval of Short Sale) and an executed home sales contract.
HAFA Approval Requirements Developed by the U.S. Treasury Department
The servicer must list each potential borrower’s basic eligibility ratings for HAFA along with any shortcomings based on examination of:
- Borrower’s mortgage payment delinquency status and likelihood of default;
- Any pending foreclosure proceeding;
- Any current stipulations or requirements by an investor or mortgage insurance company;
- Status of any subordinate lien;
- Current property value or loan-to-value;
- Current borrower assets.
How HAFA and HAMP Work Together to Benefit Homeowners
The HAFA program offers a very attractive alternative to homeowners who otherwise would face costly foreclosure proceedings. This program provides homeowners and mortgage companies with incentives to engage in short sales or DIL transactions to prevent the need for foreclosures. HAFA is now available to any HAMP-eligible homeowner-borrower who does not meet qualifications for a trial period plan; does not complete a trial period plan; does not make two consecutive payments as agreed to for the duration of a HAMP modification; or makes a request for a short sale or for a DIL. HAFA successfully simplifies the process of both a short sale and a DIL by defining a standardized procedure, shortening time allowance for process completion and clarifying documentation requirements.
Is Your Home About To Be Foreclosed On In Virginia, Maryland or Washington D.C.?
If you are concerned that you will lose your home you need to speak with an experienced foreclosure defense lawyer as soon as possible. Please contact us online or call our Vienna, Virgnia office directly at 703.991.7978 or our Rockville, Maryland office at 301.637.5392 to schedule your case consultation.