Can a HAFA Short Sale Put $3k in Your Pocket?
February 12, 2011
livingincincy
Posted Thursday, February 3, 2011 by admin
Filed under: Real Estate
The treasury department has created the HAFA (Home Affordable Foreclosure Alternatives). This program is eligible to homeowners that would otherwise be eligible for the HAMP loan modification program, but due to extenuating circumstances are still unable to afford to keep the home.
One of the requirements of a HAFA short sale is that the borrower be released from any future obligation on the first mortgage. This is important because it means that the lender can never turn around and demand that the borrower pay the difference in sale price to loan amount. They are not allowed to accept any cash contribution from the homeowner, or any promissory note or deficiency judgement. A HAFA short sale is a true release of the mortgage obligation.
HAFA also allows for a contribution to release a 2nd mortgage or equity line. The program will pay out as much as $6k to junior lien holders.
For the homeowner the HAFA program does offer a $3k incentive to the borrower, paid at the time of closing. This money can be used for any purpose the borrower needs it for and can be a lifesaver when moving costs are factored in.
The eligibility requirements for HAFA include:
•The property must be the homeowner’s primary residence.
•The first loan must have been originated before January 1 2009
•The mortgage payment must be delinquent or default is imminent.
•The balance of the loan cannot exceed $729,750
•The total monthly mortgage payment must be in excess of 31% of the household gross income
Other important information to understand about a HAFA short sale:
•The sale of the property must be to a buyer that is not related or affiliated with the seller.
Feel free to contact me for more information. I will be happy to help. If this information was helpful to you and you don’t want to miss out on other valuable information, please subscribe to my blog.
Your Real Estate Resource,
Michelle Billings
Comey & Shepherd Realtors
513-792-4109 Phone
mbillings@comey.com
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