HAFA is part of the HAMP Program and provides financial incentives to servicers and borrowers who utilize a short sale or a deed-in-lieu to avoid a foreclosure on a HAMP eligible loan. Both of these foreclosure alternatives reduce the need for potentially lengthy and expensive foreclosure proceedings. These options help preserve the condition and value of the property by minimizing the time a property is vacant and subject to vandalism and deterioration. Additionally, these options can provide a better outcome than a foreclosure sale for borrowers, investors and communities.
The HAFA Program is available for homeowners who meet the HAMP qualifications and:
1. Do not qualify for a trial mortgage modification under HAMP;
2. Do not successfully complete the trial period for their modification;
3. Miss at least two consecutive payments during their modification period; or
4. Request a short sale or deed-in-lieu of foreclosure.
The HAFA Program streamlines both the short sale and deed-in-lieu options to make them easier for a homeowner to work with their servicer. Under the program, an eligible homeowner is evaluated for HAFA within 30 days of the qualifying event, the servicer accepts the short sale payoff in full satisfaction of the mortgage, and the homeowner can receive $3,000 to help with relocation costs.
See changes to HAFA Program in my April 6, 2012 post.
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