Home Affordable Foreclosure Alternatives Program (HAFA)

Home Affordable Foreclosure Alternatives Program (HAFA)

HAFA Provisions

Complements HAMP by providing a viable alternative for borrowers (the current homeowners) who are HAMP eligible but nevertheless unable to keep their home.

Uses borrower financial and hardship information already collected in connection with consideration of a loan modification.

Allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).

Requires borrowers to be fully released from future liability for the first mortgage debt (no cash contribution, promissory note, or deficiency judgment is allowed).

Uses standard processes, documents, and timeframes/deadlines.

Provides the following financial incentives: $3,000 for borrower relocation assistance;

$1,500 for servicers to cover administrative and processing costs;

Up to $2,000 for investors who allow a total of up to $6,000 in short sale proceeds to be distributed to subordinate lien holders, on a one-for-three matching basis.

Requires all servicers participating in HAMP to implement HAFA in accordance with their own written policy, consistent with investor guidelines. The policy may include factors such as the severity of the potential loss, local markets, timing of pending foreclosure actions, and borrower motivation and cooperation.

REALTORS continue to raise issues with NAR about shorts sales and the HAFA process. NAR has created an online mailbox for REALTORS to share their experiences and provide specific examples of the problems they are facing with lenders. These emails will be collected and used by NAR in its ongoing discussions with lenders and the Treasury Department.

Please note this mailbox is for data collection purposes only, and not all submissions will receive a response. You may send an email detailing your experiences to HAFA@realtors.org.

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