Options for Those Not Meeting HAFA Eligibility

The Home Affordability Foreclosure Alternative was introduce last November 2009 and went into effect April 1, 2010; it's an alternative to those who qualified for HAMP but for whatever reason did not complete the program and need to sell their home.

HAFA is designed specifically for conventional type loans to help homeowners streamline the short sale process and avoid a foreclosure. But again, here's a broken program that the government developed and left it up to the lenders to voluntarily participate in.

However, if a lender is participating in the HARP program then they must adopt the new HAFA program. What I think is positive with HAFA is that a homeowner who started out with the HAMP program but became delinquent on their new modification loan can now switch to the HAFA program and sell their home.

There are many borrowers who have defaulted on their new modified mortgage loan and ultimately face foreclosure again but HAFA gives you, sort of a second chance to avoid foreclosure.

What I do not like is, no matter what type of application you submit whether it's for HAMP, HARP or HAFA you're at the mercy of someone else accepting or rejecting that application. Applications for HAFA will probably be rejected much more that accepted; not because lenders don't want to readily accept a good deal but imagine the numbers that will overwhelm the banks? Every time you have such a high number of applicants for a program the lenders undoubtedly send out more resounding "NO's"!

To qualify for HAFA, Borrowers must meet these basic eligibility criteria

• Property must be borrower's primary residence
• The mortgage loan is the first lien originated before 01/01/09
• The mortgage is delinquent or default is reasonably foreseeable
• The current mortgage balance is $729,750 or less
• Homeowner's monthly mortgage payment exceeds 31% of their gross income

And the best news of all...lenders are expected to provide an approval letter 10 days from the date the offer is received - no more waiting on eggshells for months to get notification if the short sale has been approved.