Understanding YOUR Responsibilities,
Consequences & Benefits of HAFA



>>CHANGES TO HAFA, Dec. 28, 201<<



  • You, the homeowner, must meet all the requirements once you begin the HAFA short sale process. If you do not, your property will be taken by the bank via a deed in lieu without any further foreclosure process or expense to the lender.
  • You, the homeowner, are responsible for negotiating ALL subordinate liens on the property and settle for a total of no more than $3000 for all of them OR pay them off yourself . You can ask your Realtor to negotiate these - make sure they know what they are doing and have negotiated MANY short sales successfully. If you do not settle ALL for a total of $3000 or one lienholder does not agree to it, then your property will be taken by the lender with a deed in lieu of foreclosure. MOST HOAs are NOT agreeing to a settlement, thus you would fail the HAFA program. [Best to keep your HOA dues up to date.]
  • You, the homeowner, will pay 31% of your income monthly while the short sale is negotiated. If you miss a payment or are late, you can lose your property to the lender through the deed in lieu agreement you sign to enter the HAFA program.
  • The lender will set the price for your home, a Realtor will list it for that price and if it does not sell in the time frame alotted, you will fail the HAFA program and your home will taken by the lender through a deed in lieu of foreclosure.
  • Most of the lenders we have been dealing with do not even understand HAFA. However, if you sign the paperwork, it's on you and deed in lieu will be enforced.
  • You will very likely get a call from your lender telling you to sign up for HAFA and many will tell you that you qualify. You may and then again you may not. They will ask you to send them money and can, and often do, come back and tell you that you do not qualify. See the item above.
  • The new buyer cannot sell the property for 90 days - say goodbye to almost all investors and narrow your market considerably.
  • Want out? Just say NO TO HAFA and opt for a standard Non-HAFA short sale.
  • Contact Zwick Realty Group for a free consultation or to get your questions answered honestly.

HAFA without the fine print warnings:

HAFA at-a-glance

What is HAFA?

The Home Affordable Foreclosure Alternatives (HAFA) Program was announced on November 30, 2009 in a HAMP Update titled Introducing the Home Affordable Foreclosure Alternatives Program .

HAFA is a government sponsored initiative overseen by the US Treasury Department. This initiative is administered by Fannie Mae and is targeted to assist all Home Affordable Modification Program (HAMP) eligible homeowners in avoiding foreclosure. Options for avoiding foreclosure include short sales or deeds-in-lieu of foreclosure.

Supplemental Directive 09-09 offers incentives to lenders to assist homeowners in short sales or deeds-in-lieu. Lenders are encouraged to streamline the short sale process and are offered financial incentives to carry out these foreclosure alternatives. The Home Affordable Foreclosure Alternative program evolved to solve the massive issue with short sales processes and procedures being lengthy, confusing and somewhat unmanageable. HAFA currently only supports conventional loans and does not apply to loans owned or guaranteed by Fannie Mae or Freddie Mac.

Details of HAFA

The Home Affordable Foreclosure Alternative Program HAFA was introduced to simplify and streamline the short sale process:

  • HAMP or Home Affordable Modification Program has had lack luster success and many borrowers that did not qualify for HAMP needed a viable foreclosure alternative
  • HAFA aims to standardize the short sale process and set limits on approval time
  • All parties involved receive financial incentives to complete a short sale: borrowers, services, investors and real estate agents
  • HAFA mandates that borrowers be fully released from future liability for the debt
  • Borrowers must list their property with a licensed real estate agent and allows the borrower to receive pre-approved short sale terms prior to the property listing their property

HAFA provides financial incentives as follows:

  • Homeowners will have no out-of-pocket expenses and lenders will pay all servicing fees
  • HAFA qualified homeowners may receive $3,000 in Borrower Relocation Assistance after a short sale or deed-in-lieu has been completed
  • Servicers participating in the HAFA program receive up to $1,500 upon completion of a short sale or deed-in-lieu
  • Financial incentives for [loan] investors include up to $2,000 for those who allow a total of up to $6,000 in short sale proceeds to be distributed to subordinate lien holders

Important HAFA documents

Important documents for the Home Affordable Foreclosure Alternatives HAFA program:

Am I Eligible for HAFA?

The good news is that most homeowners facing financial hardship are eligible. If you are eligible for HAMP but cannot pay your mortgage, then there is a good chance that you qualify for a short sale via the HAFA program. Unfortunately, loans owned or guaranteed by Fannie Mae or Freddie Mac do not qualify.

If you meet one or more of the requirements below then services must consider your eligibility for HAFA within 30 calendar days:

  • You request a short sale or deed-in-lieu
  • You are delinquent on a HAMP modification or are missing at least two consecutive payments
  • Do not qualify for a HAMP Trial Period Plan
  • Do not successfully complete a HAMP Trial Period Plan

How does my loan qualify for HAFA?

  • Your loan is not owned or guaranteed by Fannie Mae or Freddie Mac
  • Your property must be your principal residence
  • Your principal balance is equal to or less than $729,750
  • Your loan is delinquent or default is imminent
  • Your loan originated on or before January 1, 2009
  • Your total monthly mortgage payment exceeds 31 percent of your gross income

How do I Apply for HAFA?

Once you have determined that you qualify for HAFA, it is imperative that you contact your lender and notify them of your interest in participating in the HAFA program. If you are unsure whether or not your meet the eligibility requirement you can contact Zwick Realty Group  for a free consultation.

HAFA FAQ For Homeowners

The Distressed Property Institute has put together a wealth of knowledge regarding the HAFA program. A FAQ for Homeowners can be read by clicking the links below:

Richard H. Zwick of Zwick Realty Group is a CDPE, or Certified Distressed Property Expert and has undergone extensive training for foreclosure avoidance options, specifically short sales. Richard also has 20 years experience with foreclosures, has successfully dealt with numerous short sales and foreclosures in the past few years and is focused on helping homeowners avoid foreclosure, along with the serious pitfalls with attempting to do so.

If you are a troubled homeowner, are under water with your mortgage, or have a family member or friend facing foreclosure, please give us a call for a confidential consultation about the possibility of a short sale and to review ALL your options BEFORE signing anything .

Call Richard Zwick at 407 494 1717or email  foreclosure.center@zwickrealtygroup.com

This site, Richard H. Zwick, Zwick Realty Group & Sand Dollar Realty are not providing legal or tax advice. The information provided is for educational and informational purposes only. It is recommended that sellers considering a short sale should consult an independent legal and tax adviser for more information.