The HAFA (Home Affordable Foreclosure Alternatives) guidelines apply to lenders who voluntarily participate in the HAMP (Home Affordable Modification Program).
The Department of Housing and Urban Development (HUD) says more than 100 servicers have signed up to participate in HAMP, covering more than 89% of mortgage debt outstanding in the country.
Qualifications are as follows:
* Must Apply for the HAFA
* Property is principal residence.
* Mortgage originated before Jan. 1, 2009.
* Mortgage is not owned or guaranteed by Fannie Mae or Freddie Mac, GSEs are expected to release their own version of the HAFA soon.
* Borrower is delinquent or default is foreseeable.
* Homeowner demonstrates hardship.
* Borrower’s total monthly housing payment exceeds 31 percent of gross income.
* Unpaid principal does not exceed $729,750.
According to HAFA rules, lenders now must offer a short sale in writing to the borrower within 30 days if the borrower does not qualify for or complete a loan modification. Borrowers then must respond within 14 days to the lender’s short sale agreement.
Once an offer is submitted, it must be presented to the lender withint three days along with the buyers mortgage approval. The lenders must approve or deny the contract within 10 days.
HAFA rules also state that lenders must release borrowers from the obligation to repay the difference between the sales price and the loan amount. No deficiency judgments are allowed for a first or second loan.
Other HAFA Incentives
In the past, short sales were especially difficult for homeowners with more than one loan on their home, since the home sale typically repaid only the first mortgage. HAFA’s financial incentives include a payment of up to $3,000 for second mortgage holders. Even though this is much less than what most home owner have incurred it’s better then nothing for the second lein holder.
Longer you wait more tedious the process gets for you and me to resolve. To learn more please send me an email at deepak@HouseInSoCal.com