Are you a good candidate for a short sale? Are you aware of the HAFA program and how it can help owners who can’t afford their mortgage payments? If you’re behind on your mortgage, thinking about a short sale/foreclosure or can’t afford your property any more, the HAFA program may be for you.
What is HAFA? HAFA stands for Home Affordable Foreclosure Alternatives. What the HAFA program allows homeowners to do is to either do a short sale of the property or to sign a deed-in-lieu of foreclosure. If you sell the home through a short sale, the lender agrees to allow you to sell the home for less than you owe them. If you sign a deed-in-lieu, the lender accepts title of the home from you and ownership of the property is transferred back to them.
HAFA helps homeowners who are delinquent in their mortgage payments because the homeowners are able to get advice from HUD approved counselors regarding their options as well as speak with licensed (and hopefully experienced) Realtors. One of the best benefits of HAFA is that unlike a conventional short sale where the bank may hold a deficiency judgment against the owners, the HAFA short sales don’t allow for a deficiency judgment and the deficiency between what the property is sold for and the amount owed is waived by the lender and servicer of the loan. The HAFA short sales are different in several ways. First, the lender is working directly with the homeowners to determine an acceptable sales price so you know that when you get an offer that is at the sales amount, the lender will review quickly and accept. Second, a HAFA short sale has less of a negative effect on your credit rating than a conventional short sale and definitely far less than a foreclosure which means that you’ll be able to get back on track quicker and buy a home once your credit is sufficiently restored. Third, the HAFA program can provide relocation assistance to the homeowners for up to $3,000 (and there may be other programs that the homeowner qualifies for which will give them additional funds at closing).
How to qualify for the HAFA program? There must be some kind of a financial hardship that can be documented whether it’s an illness/death in the family, loss of income, or loss of a job. The documentation can be in the form of medical bills, bank statements, employer documentation and w-2 statements. The lender will review all of these items to determine if you’re eligible for the program. You can’t have bought a new home to live in within the last 12 months (because that looks like maybe you don’t have a hardship after all to the lender). The mortgage on the home that you are delinquent on must have been generated on or before January 1, 2009 and the original balance must be less than $729,750. The homeowner can’t have a criminal record in the last 10 years for felony theft, fraud, forgery, money laundering or tax evasion relating to a mortgage or real estate transaction.
Only loans that are owned or guaranteed by Fannie Mae or Freddie Mac or serviced by other participating mortgage servicers are eligible for the HAFA program. If you want to know if your home in Naples, Bonita, Estero, or Marco Island will qualify for this program, give us a call and we’d be happy to review your situation and give an opinion regarding your options.
We can always be reached at 239.293.0246 and are happy to assist you however we can. We look forward to hearing from you.
Michael Bryant, Realtor and Anna Bryant Realtor & Attorney
