An Obama housing initiative that I can totally agree with
On November 30th 2009, the Treasury department came out with a new set of guidelines called “Home Affordable Foreclosure Alternatives – Short Sale and Deed-in-Lieu of Foreclosure” or HAFA for short. It is the new addition to the Home Affordable Modification Program (HAMP) (HAMP is meant to help homeowners get their loans modified but in my view the HAMP plan has not been successful because most lenders were unwilling to reduce the principal amount owed by the borrowers especially when home values have dropped significantly – now enough of my opinion on HAMP and back to HAFA the reason you are reading my blog post).
The scheduled effective date for HAFA is April 5, 2010 but smart servicers and lenders will be wise to implement the program before that time (with enough pressure from homeowners, I am sure the wise lenders will not wait till then, so learn as much as you can about HAFA and start calling your lender to task). Once HAFA is in full effect, homeowners will be accepted into the program as long as all the requirements are met and the paperwork is received on or before December 31, 2012 (Hence I have more than enough time to start working on providing you a solution as your Real Estate Agent especially if you reside in Maryland).
So what is HAFA proposing as the foreclosure alternatives for Homeowners?
Simply put, Treasury has proposed that lenders (and/or servicers) offer Short Sales or Deed-in-Lieu (DIL) as the alternatives to foreclosure for homeowners who are unable to be approved for a HAMP modification request, a HAMP modification was offered and not accepted by the homeowner, the homeowner falls out of a HAMP modification or the homeowner requests for a short sale or DIL. The HAFA program is meant to streamline the use of short sales and DIL by lenders and make the entire process a lot simpler and quicker!
