HAFA

Home Affordable Foreclosure Alternatives Program (HAFA)

In 2009, the Treasury Department introduced the HAFA program to provide a viable option for homeowners who are unable to keep their homes through the existing Home Affordable Modification Program (HAMP). The HAFA program took effect on April 5, 2010 and sunsets on December 31, 2012.

Home Affordable Foreclosures Alternatives Program: Guidelines and Forms

HAFA provides incentives in connection with a short sale or a deed-in-lieu of foreclosure (DIL) used to avoid foreclosure on a loan eligible for modification under the HAMP program. Servicers participating in HAMP are also required to comply with HAFA.

A list of servicers participating in HAMP (including HAFA) is available Click Here.

HAFA Provisions

  • Complements HAMP by providing a viable alternative for borrowers (the current homeowners) who are HAMP eligible but    nevertheless unable to keep their home.
     
  • Uses borrower financial and hardship information already collected in connection with consideration of a loan modification.
     
  • Allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).
     
  • Requires borrowers to be fully released from future liability for the first mortgage debt (no cash contribution, promissory note, or deficiency judgment is allowed).
     
  • Uses standard processes, documents, and timeframes/deadlines.
     
  • Provides the following financial incentives.
     
  • $3,000 for borrower relocation assistance.
     
  • $1,500 for servicers to cover administrative and processing costs.
     
  • Up to $2,000 for investors who allow a total of up to $6,000 in short sale proceeds to be distributed to subordinate lien holders, on a one-for-three matching basis.
     
  • Requires all servicers participating in HAMP to implement HAFA in accordance with their own written policy, consistent with investor guidelines. The policy may include factors such as the severity of the potential loss, local markets, timing of pending foreclosure actions, and borrower motivation and cooperation.

REALTORS® continue to raise issues with NAR about shorts sales and the HAFA process. NAR has created an online mailbox for REALTORS® to share their experiences and provide specific examples of the problems they are facing with lenders. These emails will be collected and used by NAR in its ongoing discussions with lenders and the Treasury Department.

Please note this mailbox is for data collection purposes only, and not all submissions will receive a response. You may send an email detailing your experiences toHAFA@realtors.org.


 

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Testimonials

I am writing this in response to your request for feedback for the services of your Barstow Real Estate Group's Agent, Nancy J. Wunker.

First, let me explain that Nancy listed the property with Jack Fordyce who held the property as part of his Trust Estate. Jack was 87 years old; the property had been a rental for the past many years and was in need of updating and repairs. Nancy helped him tremendously in obtaining workman, supplies and services. Jack lived in Huntington Beach while the property was in Barstow so this assistance was extremely appreciated.

Ironically, on the day that Jack passed away, an offer was presented for the purchase of the property and I, as Successor Trustee of Jack's Trust, was thrust into immediate service. You can imagine what it was like losing a family member and at the same time having to attend to: accepting an offer to purchase, signing disclosures and all of the papers necessary to open escrow and providing all the documentation necessary for me to take over as the seller on property that I knew nothing about and was located quite a distance from me.

This was in addition to handling other duties of the Trust, such as transferring bank accounts, paying funeral expenses, obtaining Death Certificates, to name just a few; and all quite overwhelming.

As you know, in all Real Estate transactions, time is of the essence when you have a buyer that is ready and able to perform so everything had to happen quickly and accurately in order to have a smooth transaction. Nancy was the ultimate professional. She took charge and handled so many details I can't begin to list them all but included finishing some of the repairs, taking care of anything that the inspectors and the lenders found necessary to fix, handling escrow procedures and countless other tasks that were necessary including forwarding all the faxes that needed signatures, etc., turning on utilities, dealing with issues regarding the pool. She was on top of everything and kept me informed as well.

The escrow was slated to be closed January 18, 2016, and it closed December 9, 2015 in a mere 50 days from offer to close.

As you can see, I would not have been able to accurately describe her value in your survey. She performed above and beyond my expectations and made my duties as Successor Trustee so much easier in an already stressful time.

Thank you for the opportunity to again express my gratitude for Nancy's services.

Carol Halperin, Successor Trustee

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