HAFA – Home Affordable Foreclosure Alternative
Kathleen Daniels, San Jose Short Sale Agent on Real Estate Radio Bay Area hosted by Karen Levine.
Saturdays from 1-2pm
HAFA – Eligibility is Similar to HAMP
The basic HAFA eligibility criteria are similar to the eligibility criteria for the HAMP – loan modification.
- The property must be the borrowers principal residence. For Treasury Department HAFA the property can be vacant up to 12 months.
- The mortgage loan is a first lien mortgage which originated on or before January 1, 2009.
- The mortgage is delinquent or default is reasonably foreseeable.
- The current unpaid balance is equal to or less than $729,750. This is for a single unit meaning a condo/townhome or single family home. Note: The balance mentioned in the KDOW Radio interview was mis-spoken as $729,550.
- Must have a verified hardship.
Prior to the February 2011 Policy Update to Supplemental Directive 10-18, in order for a borrower to qualify for HAFA, the total monthly mortgage payment (principal, interest, property taxes, insurance and homeowner association fees, if any) had to exceed 31% of the borrower’s gross income.
Borrowers are no longer required to prove that the monthly payment exceeds 31% of monthly gross income. This means it is no longer the servicer’s responsibility to verify the 31% payment issue. Borrowers must still prove hardship.
This Policy Update also creates the opportunity for servicers to re-evaluate borrowers who were previously determined to be ineligible for HAFA due to the 31% requirement.
If a servicer declines a borrower for HAFA then the request for a HAFA short sale waterfalls or transitions to a non-HAFA short sale.