Starting Point Real Estate understands homeowners can be forced to deal with difficult real estate situations. If you are unsure of the right decisions to make, consult the experts of Starting Point Real Estate. If a homeowner is no longer able to afford mortgage payments and needs to consider a more reasonable living situation, they should consider the Home Affordable Foreclosures Alternatives (HAFA) program.
Homeowners struggling to sell their home in as a short sale are getting some relief because of the HAFA program. Normally, short sales are a long and complicated process. HAFA is designed to help home avoid foreclosure. Before the homeowner puts the home on the market, the lender provides them with preapproved short sale terms. This shortens the short sale process and makes the process easier to understand.
If a borrower does not meet all 5 requirements, they are not eligible for HAMP. The main goal of HAFA is to avoid foreclosures. HAFA allows borrowers to be relieved of repaying the difference between the sales price and loan amount. If you are trying to sell your home as a short sale, it is beneficial to be rejected by HAMP in order to be eligible for HAFA. You can also be accepted in to HAFA if you stop making your loan modification payments.
There are several specific qualifications in order to qualify for HAFA.
- Lenders that participate in HAFA waive the right to a deficiency judgment.
- Sellers will receive a government payment of $3,000 at close of escrow to cover relocation expenses.
- Sellers will not be required to make a seller contribution.
- Lenders must agree not to foreclose during the short sale process.
- With the exception of Fannie Mae, Freddie Mac, VA and FHA loans, the sellers’ mortgage payment does not need to exceed the 31% ratio after 2/1/11.
If you are looking to avoid foreclosure, the HAFA program may be a good alternative. Starting Point Real Estate can provide assistance you in avoiding a short sale and guide you through the HAFA procedure.