The New Home Affordable Foreclosure Alternative 
the Al & Dee Real Estate Group at RE/MAX by the Gulf 

HAFA, the Home Affordable Foreclosure Alternative program will be effective April 5, 2010, and designed for homeowners who have applied for assistance through HAMP, but have had no success with their loan modification or refinance.

First, understand HAFA is voluntary. Lenders who received Federal government funding, also known as TARP Money, are being "encouraged" to participate. Yet, even those lenders are allowed to interpret HAFA guideliness "in accordance with best business practices".  Second, HAFA does not apply to any Freddie Mac or Fannie Mae loans. Eight out of every ten short sale loans are backed by these securities, and that's about 60% of all mortgage in this country.

Bottom line... the HAFA program is expected to streamline the short sale and deed-in-lieu process. Here are the requirements:

• The home must be the principle residence of the homeowner
• The first mortgage must have been taken out on or before Januart 1, 2009
• The mortgage is delinquent or will be in the foreseeable future
• The unpaid balance owned on the first mortgage can not be more than$729,750
• The monthly mortgage payment has to be more than 31 percent of the homeowner's gross income

If you answer YES to all of the above then:

• The homeowner has 14 days to request HAFA assistance after being denied under HAMP
• Lender has 14 days to accept the homeowner into the HAFA program
• Lender establishes the sales price
• Homeowner must work with a certified in distressed sale real estate agent and is allowed 120 days to obtain an offer
• When an offer is submitted, the lender has 10 days to accept or reject the offer
• When the transaction closes then...
  • The lender receives $1,000 from the Federal Government
  • The homeowner receives $1,500 from the Federal Government
  • The first lien holder agrees NOT to pursue collection of any shortage
  • The second lien holder (if any) MAY agrees not to pursue collection of any shortage

As is typical with government programs, this is all explained (note a trace of sarcasm) in an easy to read 43 page document that can be view by following this link.

Still have questions? Give us a call at 228.374.0002 or email us at al@alndee.com

  

NEED A CMA? Or do you know of someone who may need to know their home's worth? Perhaps you would like to know what the home down the street sold for? Regardless, give us a call and we'll get right on it. Call us at 228.374.0880 or send us an email and we'll call you right away.

Contributed by Al & Dee Allegue
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