Don’t Overlook A Home Affordable Foreclosure Alternative

: Chris Lee Law Firm

  Filed under: Short Sales

family short saleThe nation’s glut of upside down mortgages is a headache for policymakers and banks alike. With nowhere to go for banks, many have resorted to outright bullying and subtle pestering to coerce borrowers into paying. Many borrowers just can’t do it—there is nowhere to make more money. One program, Home Affordable Foreclosure Alternatives—HAFA—is another opportunity to force your bank to play fair and avoid foreclosure.

Why a HAFA short sale may fast track your home

It should first be said that HAFA is an option only if a home loan modification is not. If you don’t quality for HAMP, HAFA then becomes a default option.

Your bank must consider you for HAFA if loan modification is an option. Most banks are not interested in foreclosure, as it leaves them with less. Instead, if and when a bank approves of a HAFA short sale, they are then obligated to play by government rules. This means you won’t be jerked around on the agreed short sale price, so long as your bank agrees to the conditions of a HAFA short sale.

There are generous incentives for banks to accept a HAFA short sale. Banks receive $1,500 to cover the administrative fees and costs of a short sale, and investors are eligible to receive 2,000 dollars.

Borrowers are protected under a HAFA agreement the following ways:

  • Lenders must give borrowers pre-approved terms of a short sale—no waffling on the price later
  • Lenders can’t require a cash contribution from the borrower to make up for the difference lost on a short sale
  • Borrowers cannot be subject to a deficiency judgment after the sale is completed
  • Borrowers are also eligible for 1,500 dollars to relocate under a HAFA short sale agreement

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