How HAFA Can Help You

The Home Affordable Foreclosure Alternatives Program (HAFA)

Most people selling homes are doing so on a short sale. Before they’ve finished paying for the mortgage, homeowners may opt to unload their property for a hefty chunk of change and move on from a location.

Typically, such a move would leave the new property owner stuck with the remainder of the mortgage. This is disadvantageous to someone who may have just paid $100,000 or more to buy a property and it represents a potentially large risk for a new homeowner.

The HAFA program allows for sale of a home while also absolving the new owner of the remaining mortgage debt. It’s an interesting way of doing things but like other financial programs, the debt doesn’t exactly disappear; you pay for your new home a different way, is all.

The final sale price may not be as high as the homeowner would wish, or could be too high to reasonably sell given the economic circumstances of the neighborhood.

These and other restrictions make Home Affordable Foreclosure Alternatives a bothersome program to use. It is still considerably better than letting your home fall into foreclosure and destroy your credit, however.

You could still walk away from a bad arrangement with some money in your pocket and a good name so it is worth some consideration. It’s also been called the Exit Gracefully program and it’s specifically for people who know they can’t pay for their home and frankly don’t want to anymore.

In addition to removing the debt from your credit, this may allow you up to $3,000 in relocation costs to move to a new place. There are some strict qualifications which must be met to seek relief under this program but if you’re suffering from one hardship or another, the odds are good you may qualify already.

If you live in your home, you can prove your hardship, you aren’t a felon and your mortgage is for less than $730,000 (most are) then you can get some help from HAFA.

Before you liquidate your home in such a manner, you must make sure there are no other liens against it. Nobody wants to buy a house from someone who doesn’t actually own it and nobody will buy your house if it has a second mortgage.

There is a specific clause which will allow you to get out of your mortgage if the loan payments add up to more than 31% of the home’s value but few people will qualify based on this.

What is a Short Sale?

Understanding the short sale more thoroughly will reduce some confusion for most readers. If you and your lender both agree that selling your home despite its decrease in value is a viable alternative to foreclosure, then you can get out of a jam quickly.

There are a lot of other programs including the HAMP which must be completed, exhausting literally every other possibility before HAFA will come in to buy your house back from you.

Obviously, this isn’t recommended if it can be avoided. A home loan modification lawyer could give you the best possible advice given your specific situation and unique circumstances. No one program will fit everyone but everyone should apply for all the programs they can find if it means saving their house.


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Comments ( 3 )

I own some real estate (Florida Vacation Villas, One Week) which I have donated to Mother Waddles Charity. I sent a quit claim deed to Westgate Resorts, the manager of the property, and to the Osceola County Registrar of deeds. Westgate Resorts, the management company, refuses to recognize the transfer and continues to send me tax bills and maintenance fees. How do I get rid of this real estate?

Larry Tessari added these pithy words on Jan 13 15 at 6:37 am

A quit claim deed conveys property from one entity, in this case yourself, to another. A quit claim can not be recognized unless the party to whom the property is being conveyed to agrees to the transfer. Timeshares can have exorbitant monthly fees which is how they make their money. The timeshare company can foreclose on you just like a bank can and they can also sue you for any unpaid fees and assessments. To avoid foreclosure consult a local attorney to represent you or to facilitate an orderly transfer of the property so that you don’t get sued and referred to a collection company. Any of these foreclosure or collection routes can be disastrous to your credit rating.

Attorney Load Mod added these pithy words on Jan 13 15 at 12:29 pm

I am wondering if there is anything I can do to save my home. There has been a lot going on over the last 6 years that have caused me to get behind on my mortgage payments. 2 reasons being laid off of jobs. First time I was laid off for 9 months back in 2010 then 2nd time was last Oct. I tried to send in a payment in Oct and it was returned. Another reason is because when we first bought our home our payment was I believe $681 which was very doable. However, it kept in creasing to $898.00. This was a big blow for us as we struggle from pay check to pay check. After they returned my last payment I contacted them by email to see what my options were. They told me that I could submit paperwork for a possible re-modification on my loan. On Nov 6th I sent in my paperwork as requested. I kept emailing them to see where they were on my loan. Eventually, I received an email that stated that my paperwork was accepted and being processed. Then at the same time I received another email that stated there was something missing that was required for the re-modification. So I emailed my loan counselor and never got a response back. I continued to email him and when I didn’t get a response I started emailing others with the mortgage company. At the time I did not have a working phone plus I didn’t know where this might go so I wanted a paper trail as well. As I continued to try to get responses, I receive a letter from an attorney stating that I had missed a hearing (which I didn’t know anything about) therefore, accelerating the foreclosure. Again, continuing to send emails to get a response. I sent emails from my personal email address as well as getting on their website and sending correspondence thru their company email. I finally got a response back a week ago stating that they apologize for the frustration and that they would contact my loan counselor and have him contact me within 3 days. Well, I never heard from him so I tried again and sent another email to the loan counselor’s supervisor from the information that was provided to me by the response I had received from my most recent email from them. I also let them know in my most recent correspondence that I was finally able to find a job and in every correspondence I let them know that we wanted to keep our home and that we have no place to go. I received a letter yesterday stating that our house is going up for auction June 9th with the Sherriff’s office. I am terrified to say the least. So I am reaching out to see if there is anything that anyone can do to help our family keep from losing our home. I have no idea what my rights are if any. I could sure use some help from professionals. Thank you.

Pam added these pithy words on May 15 15 at 7:31 am

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