A rundown of HAFA

The expansion of the government's Home Affordable program introduces new benefits for those homeowners who are no longer able to retain their home but would still like to avoid foreclosure. To qualify under Home Affordable Foreclosure Alternatives (HAFA), you must meet the eligibility criteria for the Home Affordable Modification Program (HAMP).

Why should I consider a HAFA short sale?
If you owe more on your mortgage than your home is worth and are unable to keep up with your mortgage payments, a HAFA-eligible short sale will:

• Help you avoid foreclosure
• Allow you to be "fully released" from any further liability on your mortgage
• Provide financial assistance of $3,000 to help with relocation expenses  

Am I eligible?
Homeowners who meet the eligibility requirements for the Home Affordable Modification program are eligible under the Home Affordable Foreclosure Alternative program, even if you have been unable to complete the Home Affordable modification process. Following are some general eligibility criteria:

• You are facing hardship which prevents you from being able to maintain the monthly mortgage payments.
• Your mortgage is on your primary residence
• Your mortgage is a first lien mortgage originated on or before January 1, 2009
• The outstanding balance of the loan is under $729,750 for single family property.
• Your total monthly payment on your primary mortgage is more than 31% of the gross income of all borrowers on the mortgage.  
• You have already been considered for Home Affordable Modification and one of the following are true:
• You do not qualify for a Trial Period Plan
• You have not successfully completed the Trial Period Plan
• You are delinquent on your Home Affordable Modification, missing at least two consecutive payments
• You request a short sale or a deed-in-lieu

How is the HAFA program different than a regular short sale?
The HAFA program is part of President Obama's Home Affordable program. This provides new guidelines designed to simplify and speed up the short sale and deed-in-lieu process as well as offer homeowners some additional financial assistance. The eligibility criteria are based on the terms set forth under this government initiative. If you do not meet the eligibility criteria under HAFA, there is a good chance that you may still be able to work with your lender on a short sale.

What if I don't qualify under HAFA but am interested in a short sale?
Your lender will most likely still consider a regular short sale, even if you do not meet the HAFA eligibility requirements.

In a HAFA short sale, how is the value of my property determined?
Your lender will independently establish property value and an approved list price (if you have asked for participation in HAFA BEFORE you have an offer on your home. If so, the home's pre-approved listing price may be based on either:

• an appraisal performed in accordance with standard appraisal practices
• one or more Broker Price Opinions, of which must be dated within 120 days of the Short Sale Agreement 

How long will the short sale process take?

• You will be allowed 120 days (with extensions up to a year possible) to market and sell the property.
• The property must be listed with a licensed real estate agent experienced in selling properties in the neighborhood.  

Marketing of the property may run at the same time as the foreclosure process. No foreclosure sale can take place during the marketing period specified in the Short Sale Agreement as long as you're acting in good faith to sell the property.

Can I select my own real estate agent or are they assigned by the lender?
You should select your own agent. Select one that is familiar with short sales, HAFA, and your area, and one you are comfortable working with.

Is there a fee to participate in HAFA?
No. But you may be required to make partial mortgage patments during the process.

How long will this program be offered?
This program will accept eligible borrowers until December 31, 2012.

Go HERE to check if you are eligible