February 22, 2012

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HAFA Short Sales

What is a HAFA short sale?

HAFA stands for Home Affordable Foreclosure Alternative, and was a program implemented by the government to help assist struggling homeowners by providing a government backed short sale program.

What are the benefits of a HAFA short sale?

There are several benefits that a HAFA short sale provides.

  1. The bank, under a HAFA short sale, must waive any deficiency judgment. A deficiency is what is left over after you sell the property for less than what’s owed on the balance. So, let’s say you owe $200,000 on your home and you sell it for $150,000, you would have a deficiency of $50,000, this creates a “short sale.” Under a HAFA short sale the bank has to waive this deficiency, but this applies to first mortgages only.
  2. Under HAFA guidelines at closing you can receive a relocation check of $3000.
  3. HAFA short sale timelines generally are faster than a traditional short sale.
  4. Once it is determined that you can participate the foreclosure proceedings are halted.
  5. If you do not sell your home through a short sale process, through HAFA you can do a deed-in-lieu of foreclosure and still receive relocation money and have the deficiency balance waived.

To participate in a HAFA short sale you first have to meet the Eligibility requirements.

You may be eligible to apply for a HAFA short sale if you meet all of the following:

  • You currently reside in the home or have lived there in the last 12 months, and if you have moved out you have to maintain the home, meaning keeping the utilities on, etc…
  • You have a documented, verifiable financial hardship.
  • You have not purchased another house within the last 12 months.
  • Your first mortgage balance is less than $729,750 for the principal amount.
  • You have to have obtained your mortgage on or before January 1, 2009.
  • You must not have been convicted within the last 10 years of felony larceny, theft, fraud, forgery, money laundering, or tax evasion in connection with a mortgage or real estate transaction.

If you meet these requirements and would like to find out more information about the HAFA short sale program, contact us today!!