Many real estate agents have become advocates of another tool from President Obama’s Making Home Affordable program called Home Affordable Foreclosure Alternatives. It is designed to help delinquent or struggling mortgage borrowers short sell their home if they don’t quality for a mortgage modification through the Home Affordable Modification Program—HAMP.
Many homeowners, at first glance, qualify for a HAMP loan modification. However, troubled homeowners across the country have reported extreme difficultly getting a loan modification from their lender through HAMP. Some sellers and agents are turning to HAFA as a solution.
Any lender participating in HAMP must participate in HAFA. In a HAFA short sale, the government will preapprove your short sale and you are guaranteed four months to sell your home with your agent.
A HAFA short sale will shield you from bullying tactics employed by lenders during your short sale and after. If you qualify, the federal government has the final say. Once the transaction is complete, you are free of your lender and won’t be subject to other shady practices like a deficiency judgment where a secondary lender comes after you for a lost chunk of change.
Other HAFA short sale requirements
You only qualify for a HAFA short sale if you don’t qualify for HAMP. In fact, in order to qualify for a HAFA short sale, you must apply for a HAMP loan modification and be rejected. Beyond that, you and your home must meet certain criteria:
–Yours is a personal residence
–The mortgage amount does not exceed $729,750
–You are delinquent or anticipate not being able to pay your payments in the near future
–The mortgage is from before Jan 1, 2009
–You were denied a HAMP loan modification