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What You Need To Know About Home Affordable Foreclosure Alternatives (HAFA) Program

Author: Roby Smith

We are aware of how foreclosure has affected the real estate market and the economy. However, this has most of all affected the homeowners and their families. Many have been trying to avoid it. In fact, the government has been trying to help them keep their properties. They have launched programs like the Home Affordable Modification Program to help borrowers manage their debts better. Even with this type of help, not all homeowners are able to keep their home. Some continue to have financial troubles.

Even with the modification, some are still bound to lose their home. In order to avoid this, the government offered the HAFA or the Home Affordable Foreclosure Alternative. But who can benefit from HAFA and how does it work?

HAFA explained:

This program took effect April of 2010. This aids those heading for a short sale or deed in lieu of foreclosure. However, one has to qualify first. Those who qualify for HAMP but will evidently be delinquent or foreclose their homes are normally eligible. Keep in mind that this is for first lien mortgage. Secondary mortgages are not qualified. In addition to that, the property concerned should be the principal residence of the borrower. The property maybe vacant for about 9 months but it should be established that it was the primary property of the borrower.

There are other conditions and limitations of the program. One condition is that the principal balance of the mortgage should not exceed a specified amount. The minimum amount varies depending on the type of property you own. For instance, if you have a single-family property, your principal balance should be less than $729,750. Other amounts are identified for other types of properties.

Another condition is the amount of monthly mortgage you are paying. It has to be not less than 31% of your income. The monthly mortgage payment will include the principal amount due that month, taxes, interest, insurance and the like.

How HAFA can help you?

This is very helpful for those who are gearing to short sale and deed in lieu of foreclosure. However, the lender has to be a participant of the HAFA and it has to be the primary mortgage. If you are someone eligible applying for a short sale, expect to have a reply from your lender within 10 days after submitting your application. Although this will not promise approval, you can rest assured that you will not be waiting for a long time as the case of many homeowners. In addition to that, you will receive financial assistance to help you in your relocation after closing a deal.

Another major benefit of the HAFA is that you are released of any obligation to settle the deficiency of the mortgage balance and selling price of the property. This will surely help you have a good start.

HAFA is a great program. However, make sure that you qualify first. Understand the guidelines of the program so that you know what requirements you are going to present. If you are confused, talk to a competent real estate agent or real estate lawyer.

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Article Source: http://www.articlealley.com/article_2179459_33.html