New Hope for South Florida Homeowners!
The Treasury Department announced on November 30th the new housing guidelines that will affect America’s homeowners. This program is officially called the Home Affordable Foreclosure Alternatives Program (HAFA). HAFA applies to loans not owned or guaranteed by Fannie Mae or Freddie Mac – both whom will be issuing their own HAFA versions within the next month. This is a part of the Home Affordable Modification Program (HAMP).
HAFA’s goal is to simplify and streamline the use of short sales and DIL (Deeds In Lieu) options by adding a few rules (43 pages of guidelines).
- Requires that borrowers be fully released from future liability for the debt (NO DEFICIENCY JUDGMENT)
- Allows the borrower to receive pre-approved short sale terms prior to the property being listed
- Provides financial incentives to borrowers ($1,500 for borrower relocation assistance), servicers ($1,000 to cover administrative and processing costs), and investors (up to $1,000)
- Provides alternatives for borrowers who are HAMP eligible
- Utilizes borrower financial and hardship information collected along with HAMP
- Prohibits servicers from requiring a reduction in the real estate commission agreed upon in the listing agreement.
Effective April 5, 2010, however participating servicers may elect to implement HAFA prior to that date as long as certain guidelines and an agreement is signed by December 31, 2009.
Borrowers must be considered by servicers that are HAMP eligible within 30 days that the borrower requests a short sale or DIL.
Borrowers Must be considered for a HAMP modification and other retention programs offered by the servicer (lender) prior to being considered for HAFA.
Read the full short sale guidelines