What Is Hafa All About?

What is HAFA All About?

What is HAFA All About?

The Home Affordable Foreclosure Alternatives Program is also known as HAFA. HAFA, is sponsored by the government , and was designed to help homeowners that are eligible to get short sales pre-approved and listed before releasing them of any future liability to the debt. HAFA is a newer program that was rolled out in April of this year, so its definitely worth brushing up on the facts if you arent familiar with this program.

You need to understand that this program refers to primary mortgages, or what some lenders refer to as first lien mortgages. However, its important for you to know that any loans that are owned by Freddie or Fannie wont qualify. These entities may end up with their plans for this program, but we arent certain at this time whether or not this is something they will do.

HAFA is designed to take the homeowners financial information and take them through what is known as a Waterfall Process. The Waterfall Process, is actually related to HAMPA, the Home Affordable Modification Program. The process essentially breaks down what the homeowners has that is outgoing versus their income, and the bank will try to get it below a certain percentage in order to see if the home loan can modified to be more affordable for them. Within that, there are financial incentives for all parties involved. For the homeowner, it is a matter of a better payment. For the servicer, it means they still have money coming in to cover everything. For the investors, it means there is a resolution so they arent having to take a loss. They are able to help the homeowner maintain everything in a way that allows everyone to remain in stable position financially.

One other benefit of these programs, is the timeframe that they enforce for the process to take place. It is designed to use the appropriate documents, and at the same time has to be done in a timely manner so that the short sale or deed-in-lieu can be processed. Its a time sensitive matter, so the banks and the homeowners dont have any time to spare in this situation.

The investors can release the homeowner of the debt, but in some cases that may not happen. I am not sure why any one particular lender would have this thought process, but life in itself is so unpredictable. I think more and more banks are seeing that this is a much better solution, so that will probably change for the better as we all work together.

For more information on the home modification, and what it takes to qualify, you can visit www.inlandempireshortsaleresource.com.

by: Mayer Dallal

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