There are different types of short sales programs.  Some lenders have created their own short sale programs.  Some lenders follow the guidelines of the federal program “Home Affordable Foreclosure Alternatives” or HAFA.  Some lenders utilize versions of HAFA.

In February 2009, the Treasury Department created a program under the Obama Administration” Making Home Affordable  Program” (MHA) called “Home Affordable Foreclosure Alternatives (HAFA) to provide relief to homeowners facing foreclosure who were unable to keep their homes under the “Home Affordable Modification Program”.

Recent policy enhancements to the HAFA program have been designed to more closely align with the short sale guidelines from Fannie Mae and Freddie Mac, as well as expedite the short sale process.

*One of the major advantages of a short sale through HAFA is that sellers are released from future liability or deficiency judgments. Here’s how HAFA can assist a seller:

• HAFA improves the short sale process by creating uniform guidelines and timeframes.
• Homeowners may be eligible for $3000 in financial incentives, called “Relocation Assistance.”
• HAFA also provides up to $8500 to pay second lien holders, if applicable. 

Are You Eligible?

• The mortgage must have been established prior to January 2009.
• The homeowner must owe more on their mortgage than the current value of the property.
• The homeowner must be late on payments or be in danger of default.  This is called a “hardship.”   If a homeowner is 90 days or more delinquent with a FICO score of less than 620, they will be considered to have an automatic hardship.
• The unpaid principal balance of the mortgage cannot be more than $729,750.
• HAFA approval must be established by December 31, 2013.
• Closing on a HAFA short sale must be completed by September 30, 2014.
• The homeowner must be determined to be ineligible for a loan modification program or other foreclosure avoidance option.
• The sale of the property must be an “arms length” transaction.

HAFA is designed for conventional loans and does not apply to FHA or VA loans.  If your loan is owned by Fannie Mae or Freddie Mac, these entities offer programs similar to HAFA. Before you proceed with a loan modification or a short sale, you’ll want to see which entity owns your mortgage:

Fannie Mae
1-800-7fannie
www.fanniemae.com/loanlookup

FreddieMac
1-800-Freddie
www.freddiemac.com/mymortgage

Remember, even if the HAFA program does not apply to your situation, help may still be available for you.  Contact us to learn more – 813.294.5786