We’ve been getting a lot of questions lately about what HAFA is or how HAFA effects a seller during a short sale. First and foremost – for those of you that just thought: “What the heck is HAFA?”, it is the Home Affordable Foreclosure Alternatives. I’ll summarize the positives of this program and try to break it down as must as possible.
Fist and foremost, it’s important to note that this program is designed for home owners to actually work with the lender as opposed to just walking away from the home. In actuality, even though the lender doesn’t want to take a loss during the short sale (which they will), it’s more difficult for them to have to foreclose on the home and sell it themselves. After all, lenders make money on interest, not owning and selling real estate. Also, as previously written about, Fannie and Freddie are getting serious and making an effort to actually chase down homeowners who just bail. Making an effort to work with the lender through the HAFA program will actually stop this “chase” from the giants.
So what’s in it for the homeowner to actually go through this process? Well – there’s a couple things: First, the homeowner can get up to $3000 in relocation assistance. I would say this is somewhat of a positive. Think about it, you owe the bank thousands of dollars more but they are willing to pay you for the short sale. That seems like a decent deal. Here is the big one though: If you’re approved for HAFA, there can be no deficiency judgment for the outstanding balance. That’s huge. So for example if you owe $200,000 for your home and the bottom line is $150,000 – you don’t owe them the extra $50,000 and they can’t ask you for it! The third positive is that Fannie and Freddie will be satisfied that you worked with them to avoid foreclosure on the home. You won’t have to worry about a letter showing up asking for settlement or payment on your home loans anymore.
Feel free to contact us to discuss your personal situation.
Tony Ashworth
952-997-8899
