HAMP and HAFA

{A Home Affordable Refinance helps eligible homeowners whose loans are held by Fannie Mae or Freddie Mac refinance into more affordable mortgages.}

HAMP FAQs

Home Affordable Foreclosure Alternatives Program (HAFA)

In 2009, the Treasury Department introduced the HAFA program to provide a viable option for homeowners who are unable to keep their homes through the existing Home Affordable Modification Program (HAMP). The HAFA program takes effect on April 5, 2010—although some servicers may implement it sooner, if they meet certain requirement–and sunsets on December 31, 2012. To find out if you qualify for HAFA please fill in the form below and I will get back to you asap.

Please be ready to provide me the following at the first meeting:

1. Information about your first mortgage, such as your monthly mortgage statement
2. Information about any second mortgage or home equity line of credit on the house
3. Account balances and minimum monthly payments due on all of your credit cards
4. Your most recent income tax return
5. Information about your savings and other assets
6. Information about the monthly gross (before tax) income of your household, including recent pay stubs if you receive them or documentation of income you receive from other sources
7. It may also be helpful to have:  A letter describing any circumstances that caused your income to be reduced or expenses to be increased (job loss, divorce, illness, etc.) if applicable

HAFA provides incentives in connection with a short sale or a deed-in-lieu of foreclosure (DIL) used to avoid foreclosure on a loan eligible for modification under the HAMP program. Servicers participating in HAMP are also required to comply with HAFA.

HAFA Provisions

• Complements HAMP by providing a viable alternative for borrowers (the current homeowners) who are HAMP eligible but nevertheless unable to keep their home.
• Uses borrower financial and hardship information already collected in connection with consideration of a loan modification.
• Allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).
• Requires borrowers to be fully released from future liability for the first mortgage debt (no cash contribution, promissory note, or deficiency judgment is allowed).
• Uses standard processes, documents, and timeframes/deadlines.
• Provides the following financial incentives:
  • $3,000 for borrower relocation assistance;
  • $1,500 for servicers to cover administrative and processing costs;
  • Up to $2,000 for investors who allow a total of up to $6,000 in short sale proceeds to be distributed to subordinate lien holders, on a one-for-three matching basis.
• Requires all servicers participating in HAMP to implement HAFA in accordance with their own written policy, consistent with investor guidelines. The policy may include factors such as the severity of the potential loss, local markets, timing of pending foreclosure actions, and borrower motivation and cooperation.

In 2009, the Treasury Department introduced the HAFA program to provide a viable option for homeowners who are unable to keep their homes through the existing Home Affordable Modification Program (HAMP). The HAFA program takes effect on April 5, 2010—although some servicers may implement it sooner, if they meet certain requirement–and sunsets on December 31, 2012.

HAFA Guidelines and Forms

HAFA provides incentives in connection with a short sale or a deed-in-lieu of foreclosure (DIL) used to avoid foreclosure on a loan eligible for modification under the HAMP program. Servicers participating in HAMP are also required to comply with HAFA.

Here are the main components of the program in a nutshell:

Sellers may qualify for the program if they meeting the following conditions:

• Property is a primary residence
• Borrower is delinquent or about to be delinquent on the mortgage
• Loan was made prior to 1/1/09 and is less than $729,750
• Total monthly mortgage payment exceeds 31% of (pre-tax) income.
• Not a Fannie Mae loan or a Freddie Mac Loan.

Contact info:  Fannie Mae: 1-800-7FANNIE (8am to 8pm EST), Freddie Mac : 1-800-FREDDIE (8am to 8pm EST)

HEFA Administrator and Compliance Agent: Fannie Mae is the Program Administrator and Freddie Mac is the Compliance Agent in the process.

Borrowers must first attempt to qualify for the HAMP (loan modification program) and other alternatives. Borrowers may qualify for the HAFA Program if:

• They do not qualify for a Trial Period Modification
• They do not successfully complete the Trial Period Modification
• They are delinquent on the HAMP Modification
• They request a short sale or deed-in-lieu

Please call me @ 949 748-9834 or email at deepak@HouseInSoCal.com There is lot more to know, here are few more useful links:

HAFA 4 page brochure

HAFA Making home affordable