Obama announces changes to the Home Affordable Foreclosure Alternative (HAFA) program | What does this mean?
We get a lot of questions form homeowners here in Santa Clarita about the HAFA program and what this means for their underwater mortgage and what help they can receive.
Here is some recent information on HAFA and the changes that have been made by Obama. If you have any questions about what this means for your mortgage and if you qualify for these programs please fill out the form below the video.
Friday, March 9th 2012, the Obama Administration announced major updates to the Home Affordable Foreclosure Alternative (HAFA) program.
Created in 2009, HAFA is a government-sponsored (US Treasury) initiative assisting all Home Affordable Modification Program (HAMP) eligible homeowners in avoiding foreclosure through the short sale process & deed-in-lieu program.
These new HAFA updates will be effective as of June 1, 2012, and will allow more distressed homeowners to seek assistance. Most importantly, the deadline for submitting for HAFA eligibility will be extended a full year, to December 31, 2013.
March’s 2012 updates to the HAFA program include:
- The removal of occupancy requirements. Previously, HAFA required homeowners to have lived in the property within the last 12 months.
- $3,000 relocation incentives will be limited to properties occupied by an owner or tenant at the time of the short sale.
- Mortgage payments will be allowed to exceed 31% of the homeowner’s gross monthly income. This update will allow a homeowner to stay current on her mortgage and still qualify, minimizing the overall impact to her credit.
- Secondary lienholders may receive up to a maximum of $8,500, up from $6,000 previously.
- And one of the most dramatic changes: The Credit Bureau Reporting will be Account Status Code 13 (paid or closed account/zero balance) or 65 (account paid in full/a foreclosure was started), as applicable.
With these updates, a homeowner can be current on their mortgage, qualify for HAFA, continue to make their payments, and execute a short sale with minimum impact on their credit!
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