Details of HAFA?

HAFA was introduced to simplify and streamline the short sale process. HAFA accomplishes this in the following ways:

• Compliments HAMP by providing viable alternatives for borrowers who are HAMP-eligible

• Uses standard processes, documents and timeframes

• Provides financial incentives to borrowers, servicers and investors

• Requires that borrowers be fully released from future liability for the debt

• Utilizes borrower financial and hardship information collected in conjunction with HAMP, eliminating the need for additional eligibility analysis

• Allows the borrower to receive pre-approved short sale terms prior to the property listing

HAFA provides financial incentives as follows:

• Homeowners qualify for $3,000 (updated March 26, 2010; was previously $1,500) in Borrower Relocation Assistance after a short sale or deed-in-lieu has been completed (may classify as taxable income in some cases).

• Financial incentives for servicers participating in the program include up to $1,500 (updated March 26, 2010; was previously $1,000) servicing bonus upon completion of a short sale or deeds-in-lieu of foreclosure.

• Financial incentives for investors include up to $2,000 (updated March 26, 2010; was previously $1,000) for those who allow a total of up to $6,000 in short sale proceeds to be distributed to subordinate lien holders. This reimbursement will be earned on a one-for-three matching basis.

• Lenders pay all servicing fees — homeowners have no out-of-pocket expenses.

Source: Distressed Property Institute, LLC

If you'd like to discuss your scenario with Kevin Nakano, CDPE, please complete the online form and Kevin Nakano will follow up with you within one business day.

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