The prospect of losing a home is terrifying, but it’s something a significant amount of home owners are faced with in the current day. The enormous strain our economy has placed on property owners has left an alarming percentage of honest, hard-working people with an acute struggle to maintain their mortgage payments.
In the more unfortunate scenarios, years of timely payments can spiral into late payments, partial payments, and the eventual threat of foreclosure. A disturbing degree of corporate downsizing, federal lay-offs, and large numbers of businesses closing shop have influenced high unemployment rates. This has unfortunately put many people out of their homes. The HAFA program has been put in place to help prevent the worst-case scenario from descending upon more families.
The main focus of the “Home Affordable Foreclosure Alternatives” program is to provide assistance to homeowners who are under significant financial strain. HAFA encourages borrowers who are eligible to list their homes for a short sale to avoid foreclosure. The HAFA program also grants financial assistance for relocation costs. At the Guldi Group, we’re invested in ensuring our clients are treated fairly during the short sale of their homes, and we assist them in applying for relocation assistance funds. A recent client was awarded 30,000 in relocation assistance funds after listing their home in a short sale to avoid foreclosure. The minimum amount this program awards is 3,000. The HAFA program is an important one, and we’re here to help walk our clients through the process.
Who Is Eligible For HAFA?
Eligibility is determined by the U.S. Department of Treasury. In order to participate in the program, your loan will need to have been requested and approved by or before January 1, 2009. Payments will still be made after you’ve applied for the program.
The outstanding balance of first-lien loans is allowed up to $729,750 for an owner-occupied home. Two-unit residences are allowed a maximum of $934,200 The unpaid amount remaining on loans for three-unit properties can reach $1,129,250, and four-unit residences have a maximum allowance of $1,403,400. If your loan was issued by Freddie Mac or Fannie Mae, you will need to contact them for more information on their own assistance programs.
The home you wish to list for short sale should not be involved in a foreclosure process to be seriously considered for the HAFA program. It isn’t a deal-breaker if your home is involved in one, but the clock is ticking, and you should contact us, so we can help to assess your current options.
How Do I Apply?
After contacting a real estate agent who specializes in distressed real estate transactions with a desire to participate in the program, you’ll declare hardship on an official affidavit. The real estate company will also ask you to fill out an authorization form to allow them to speak with all involved parties. A broker price will then determine the home’s current property value. This is called a BPO. Once a BPO is obtained, a local real estate agent will be sought to list the property if they have no objections to the appraisal.
Regulations require the real estate agent to be local to the area where the short sale will be held. The home must also be listed at fair market value. You may have to wait up to 45 days before the SSA is issued. Once you receive it, you’ll have 14 days to sign and return it. While the home is listed, you’ll be expected to pay at least 31 percent of your gross income.
Does The Bank Make Home Owners Pay Anything After A Successful Short Sale?
With HAFA, you can list your home for sale at market value, and you won’t owe an additional balance or fees. With a short sale, you’ll be listing for a smaller amount than you owe, but the debt will be satisfied when the home sells. Your credit will also avoid the strain a normal short sale would place on it.
How Is A Deed-In-Lieu Different Than A Short Sale?
A Deed-In-Lieu essentially allows you to turn your deed over to the bank. The bank is then considered the owners of the deed. If your attempts at a short sale are unsuccessful, you may want to apply for a DIL.
You may not qualify for a Deed-In-Lieu if you’ve taken out a second mortgage, however. In first-lien situations, a DIL allows you to avoid foreclosure and a blow to your credit score. It will impact your score, but it won’t be as harsh as the mark of a foreclosure. Following a successful Deed-In-Lieu, you will receive a cash incentive. This action will signal an absolute conclusion to your debt if it’s conducted through the HAFA program. You cannot be made to pay an additional balance. There are other DIL arrangements, however. Be sure you research the protections the HAFA program’s DIL process affords you.
Whichever program you decide to apply for, HAFA can help you to gain piece of mind, and preserve a decent credit rating. No one mortgages a house thinking they’ll eventually face foreclosure. The emotional roller coaster the prospect of losing a home can create for you isn’t something you have to face alone. Contact one of our dedicated agents, and see how we can help you to relieve yourself of debt, and receive the relocation assistance you deserve.
If you need to get your home listed to avoid foreclosure, contact us today.