New Rules For Home Affordable Foreclosure Alternatives (HAFA)

Starting April 5, 2010, the new rules of the Home Affordable Foreclosure Alternatives (HAFA) program will govern many short sales. The new rules’ intent is to expedite the short sale process and avoid foreclosures to achieve a quicker housing recovery.
Currently, many short sales are taking up to a year to negotiate, a timeframe that often results in the buyer or seller walking away from the deal and the house getting foreclosed on.
Under the HAFA rules created by the government, the borrower receives pre-approved short sale terms prior to putting the home on the market.
To be eligible for HAFA, the lenders voluntarily participate in the Home Affordable Modification Program (HAMP). This covers about 89 percent of mortgage debt outstanding in the country. HAFA homeowners should apply for a loan modification first with HAMP or miss payments during the HAMP trial period.
Other HAFA program requirements include;
1. Property must be principal residence.
2. Mortgage loan originated before Jan. 1, 2009.
3. Mortgage is owned and guaranteed by Freddie Mac or Fannie Mae.
4. Borrower is delinquent or default is foreseeable.
5. Homeowner demonstrates hardship.
6. Borrower’s total monthly housing payment exceeds 31 percent of gross income.
7. Unpaid principal does not exceed $729,750.
This program provides hope for homeowners who are facing foreclosure. If the rules of HAFA make sense to the lenders and are executed efficiently, it will open an avenue for a quicker housing recovery, which is as we know is long overdue. (SEE IF YOU QUALIFY)