In February 2009, the Obama Administration introduced the Making Home Affordable (MHA) Program to stabilize the housing market and help struggling homeowners get relief and avoid foreclosure. In March 2009, the Treasury Department (Treasury) issued uniform guidance for loan modifications by participants in MHA across the mortgage industry and subsequently updated and expanded that guidance to include the Home Affordable Foreclosure Alternatives Program (HAFA) to provide borrowers with an alternative to foreclosure through a short sale or deed-in-lieu (DIL) of foreclosure when a loan modification is not available. In December 2010, Treasury issued version 3.0 of the

It is important to note that before listing your home with an agent to do a Short Sale, that it should first be determined who owns your loan.  It will make a difference on how your short sale is processed, and if the procedures are not followed correctly, your HAFA request could be denied.  What I like best about the HAFA program is the lender will not be able to come after the seller for a judgement deficiency for the amount that is outstanding after the sale.  A new supplemental Directive was issued concerning HAFA that will go into effect February1, 2011.  This directive now makes it easier to qualify under HAFA. Some of the changes include:

a.  Servicers are no longer required to verify a borrower's financial information or determine if the total monthly mortgage payment exceeds 31% of the borrower's monthly gross income.

b.  If the home was the priniciple residence of the borrower but is now vacant or rented out, may be eligible for HAFA as long as it was within 12 months of the Short Sale Agreement.

c.  Those seeking a short sale must get an answer within 30 days.

d.   Second lien holders no longer must accept 6% of the unpaid balance. 

We will continue to provide updates for Short Sales as changes occur. Call us with any questions you may have at 817-909-7197.