Home Affordable Foreclosure Alternative

HAFA

• The HAFA program:
  • Allows you to sell your primary residence if you have no equity.
  • Allows you to sell without any penalty or commitments to repay your mortgage company the difference or “Non-Recourse“.
  • Pays you…the seller…up to $3,000.00 for moving expenses or “Cash For Keys”.
  • Pays off your 2nd liens or 3rd liens without any “Re-course” or promise to repay.
• How do I apply?
  • You must use a Licensed Real Estate Agent from your state to initiate the HAFA process
  • The process may require the following:
    • Financial Worksheet
    • Bank Statements
    • Most Recent Pay stubs or Unemployment Documentation
    • Hardship Letter of Explanation
      • Loss of employment.
      • Relocation of employment (100 miles from primary residence).
      • Death.
      • Divorce.
      • Most life altering circumstances that result in a loss or reduction of income.
    • 2 years Federal Tax Returns or Explanation
• How Long does it take?
  • The application process takes up to 10 days from the time all your Short Sale documents are submitted.
  • Once a HAFA approval is received, the sale will take  from 30 to 60 days to close, much ike a standard sale.
• How will my credit be impacted?
  • Your credit may report “Satisfied for less than agreed” ,  ”Paid less than agreed”, “Settled”, etc…
  • Your credit score is very subjective and based on your specific debt to income ratio.
    • Most credit scores are impacted between 50 and 100 points.
    • Late Mortgage Payments or Default in payments may have a greater impact.
• What if I owe back property taxes?
  • In most cases, your mortgage company will pay your late or defaulted property taxes.
• Will HAFA pay IRS or State tax liens?
  • No, however, the IRS and most states, upon notification and submission of a few documents will allow the property to be sold as long as their is no “gain” to  the seller or what is known as a Short Sale.
• Some considerations not covered by HAFA
  • Investor owned, 2nd or vacation homes, vacant land
  • Strategic Short Sale
    • Where you simply want to sell the property to get out from underneath the debt.
  • Freddie Mac or Fannie Mae backed loans
    • These two government backed entities will have a program that mirrors HAFA but as of this date, the program has not been rolled out by either entity.