Foreclosure Alternatives Program Changes

There has been much attention over the changes to several of the government’s Making Home Affordable Programs. The Home Affordable Refinance Program (HARP) has been expanded in the new 2.0 version to reach more homeowners in need of lower mortgage payments. Now, the Home Affordable Foreclosure Alternatives (HAFA) program has also had some significant changes made in efforts to help more homeowners find ways to avoid foreclosure.

HAFA

HAFA is a government sponsored initiative that offer is homeowners a chance to take advantage of several options, including the Home Affordable Modification Program (HAMP), which may allow for a mortgage modification or short sale option.  The original Home Affordable Foreclosure Alternatives program was created and released in 2009, but has since undergone some much needed changes.

Set to go into effect on June 1, 2012 the new HAFA program will be extended until the end of December 2013. The new version will also remove occupancy requirements that previously mandated eligible homeowners live in the property for the 12 months prior to applying for the program. The new HAFA will lift the mortgage payment cap, which previously limited the payment to 30% or less of the homeowner’s gross monthly income. Homeowners may also now be able to receive up to $3,000 in relocation incentives for pursuing short sales, as well as have their credit report reflect a Status Code 13 (paid or closed) rather than carry a notification of “settled” or “satisfied”.