In efforts to help homeowners suffering with mortgage debt troubles, the government has enacted several programs to reduce the number of families that could face foreclosure. One source of foreclosure help has been in the form of short sales through The Home Affordable Foreclosure Alternatives Program, which has recently been extended another year.
Homeowners interested in a short sale have another year to take advantage of the HAFA Short Sale Program. Extended through December 31, 2013 the program will allow more borrowers to apply for a streamlined short sale process to resolve their mortgage debts instead of facing a foreclosure.
The first step, is to apply for the Home Affordable Modification Program. Their eligibility rules are:
- Only personal residences are eligible.
- The mortgage amount must be less than $729,750.
- The borrower suffers a hardship such as loss of income, an increased mortgage payment or an unexpected increase of expenses.
- The mortgage originated before January 1, 2009.
- The mortgage payment is more than 31% of the borrower’s gross monthly income.
It is important that borrower know whether their lender participates in HAMP because those that do are more likely to also offer help under HAFA. Further, lenders that offer HAFA assistance are also more likely to stick to the 10 day short sale approval guideline.