The U.S. Treasury is trying to make short sale more attractive to lenders and homeowners through the “Home Affordable Foreclosure Alternatives Program” or “HAFA” along with the updated HAFA changes for 2011 and HAFA changes for June 2012 supplemental directive. What Treasury is trying to do is help streamline the short sale process by suggesting guidelines to the participating lenders. That’s “suggestions” and “guidelines”. That does not equal “requirements” in the way I read it. Here is a summary of the program, who is eligible, and what you might expect to change if you do qualify for the HAFA program. Remember, I am condensing here and pointing out what might be important to you, the homeowner, as it relates to short sales. There are many details, requirements and forms that make up this new program.
ARE YOU ELIGIBLE?You might be eligible for HAFA if your lender participates in the Home Affordable Modification Program (HAMP), and your mortgage is not underwritten by Fannie Mae or Freddie Mac. HAMP offers you the opportunity for assistance by lowering your payments or delaying payments to keep you in your home. You must meet the HAMP requirements as follows, to be part of HAFA, whether or not you choose a modification. These qualifications are:
- You have missed payments or are about to default.
- You got your primary mortgage before Jan. 1, 2009
- You are a natural person (not a corporation, partnership, LLC etc)
- Your mortgage is for a one- to four- unit residential property.
- Your property has not been condemned.
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Your current unpaid principal balance is less than or equal to
- $729,750 for a one-unit property.
- $934,200 for a two-unit property.
- $1,129,250 for a three-unit property.
- $1,403,400 for a four-unit property.
- You must not have been convicted within the last 10 years of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction.
