What are HAFA Short Sales?
HAFA is a government-subsidized Home Affordable Foreclosure Alternatives program for distressed homeowners which allows the sale of their homes to avoid foreclosure even if the sales price is not enough to pay off their existing mortgage loans. Under HAFA, a participating lender will pre-approve the terms of a short sale and give the borrower a least 4 months to market and sell the property using a licensed real estate professional. The HAFA program is effective from April 5, 2010 to December 31, 2012.
The eligibility requirements for a HAFA short sale include the following:
Property must be borrower's principal residence
Loan must be a first trust deed orginated before 2009
Loan must be delinquent or default must be resonably foreseeable
Current unpaid principal balance must be $729,750 or less for single-family home (or higher amounts for 2 to 4 units)
Borrower must be eligible for, but unable to complete a loan modification under the Home Affordable Modification Program (HAMP)
The government incentives under HAFA are...
$3,000 to borrower for relocation expenses
$1,500 to servicer for each successful short sale
$1 reimbursement to investor for every $3 paid to extinguish junior liens up to $2,000 maximum not to exceed 6% of unpaid balance
Click here for more information on the HAFA program and the procedures.