Distressed Seller's Statistics Astounding

In today's ever changing Real Estate market some new changes are giving distressed homeowners just the guidelines they have been looking for in the new HAFA program which answers many of the questions and frustrations today's sellers are experiencing.  The need for specialty trained Realtors and Financial Advisors is greater than ever.  Contact Lynn anytime to discuss how the the HAFA program can benefit you.  A general summary and some major points of the program are below, they can be confusing, but don't worry, help is just around the corner.  Simply complete one of the contact boxes located throughout this website and send it in, I'll contact you right away and get you headed in the right direction.

Summary

The Home Affordable Foreclosure Alternatives (HAFA) Program offers a set of guidelines and financial incentives to lenders in order to streamline and simplify the short sale and deed-in-lieu of foreclosure process. The program is overseen by the US Treasury Department, administered by Fannie Mae, regulated by Freddie Mac and executed by participating lending institutions. On April 5, 2010, the program will activate and run until December 31, 2012, unless extended. The program in its current state does not support loans owned or guaranteed by Fannie Mae or Freddie Mac, but these organizations may implement their own HAFA-based programs in the future.

What is HAFA?

The Home Affordable Foreclosure Alternatives (HAFA) Program is a government-sponsored initiative overseen by the US Treasury Department and administered by Fannie Mae assisting all Home Affordable Modification Program (HAMP)-eligible homeowners in avoiding foreclosure, specifically through short sales or deeds-in-lieu of foreclosure.

HAFA directs lenders to assist eligible homeowners in quickly and effectively implementing short sales or deeds-in-lieu by providing financial incentives to lenders that carry out foreclosure alternatives. The program was introduced in part with the intent to remove the stigma from short sales and help keep communities from being destroyed through massive foreclosures. HAFA in its current state is only applicable to conventional-type, non-Governmental Serviced Enterprises mortgages and therefore does not apply to loans owned or guaranteed by Fannie Mae or Freddie Mac. These organizations may have plans to release their own versions of HAFA.

Details of HAFA

HAFA was introduced to simplify and streamline the short sale process. HAFA accomplishes this in the following ways:

HAFA provides financial incentives as follows:

• Homeowners qualify for $3,000 (updated March 26, 2010; was previously $1,500) in Borrower Relocation Assistance after a short sale or deed-in-lieu has been completed (may classify as taxable income in some cases7)
• Financial incentives for servicers participating in the program include up to $1,500 (updated March 26, 2010; was previously $1,000) servicing bonus upon completion of a short sale or deed-in-lieu
• Financial incentives for investors include up to $2,000 (updated March 26, 2010; was previously $1,000) for those who allow a total of up to $6,000 in short sale proceeds to be distributed to subordinate lien holders. This reimbursement will be earned on a one-for-three matching basis8
• Lenders pay all servicing fees — homeowners have no out-of-pocket expenses9

Who is Eligible for HAFA?

Most homeowners facing financial hardship are eligible. As a rule, if a homeowner is eligible for HAMP but cannot pay the mortgage, then he or she is eligible for an assisted short sale through HAFA. However, loans owned or guaranteed by Fannie Mae or Freddie Mac do not qualify. Servicers must consider possible HAMP eligible borrowers for HAFA within 30 calendar days if the borrower has met one or more of the following criteria

• Does not qualify for a HAMP Trial Period Plan
• Does not successfully complete a HAMP Trial Period Plan
• Is delinquent on a HAMP modification by missing at least two consecutive payments
• Requests a short sale or deed-in-lieu12

For a loan to qualify, it must meet the following criteria:

• The property is the borrower's principal residence
• The mortgage loan is a first lien mortgage originated on or before January 1, 2009
• The mortgage is delinquent or default is reasonably foreseeable
• The current unpaid principal balance is equal to or less than $729,750
• The borrower's total monthly mortgage payment exceeds 31 percent of the borrower's gross income (as defined in HAMP Supplemental Directive 09-0113)
• The mortgage is not owned or guaranteed by Fannie Mae or Freddie Mac

This has been a brief overview of just one of the programs available for distressed homeowners.  Contact Lynn for your personal review.