Keeping families in their homes is a top priority for REALTORS®. Unfortunately, it is not always possible to meet this goal. While there are loan modification and other programs that can help families, not everyone will qualify. For many families who are at risk of losing their home through foreclosure, a new program from the Treasury Department may be able to help you. In February 2009, the Obama Administration introduced the Making Home Affordable Program — a plan to stabilize the housing market and help struggling homeowners stay in their homes. One of the possible ways to help families stay in their homes is to modify mortgages to make them more affordable through a program called the Home Affordable Modification Program or HAMP. While many families have received help through HAMP, far too many won’t be able to keep their home even with a loan modification. For these families, the Treasury Department has established a new short sales program called the Home Affordable Foreclosure Alternatives Program or HAFA. HAFA is designed to streamline short sales by providing a uniform process and standard forms, as well as incentives for families and their mortgage servicers to complete the process. It offers homeowners who sell their homes under HAFA $3,000 to help cover their moving costs. HAFA may be able to help you through the difficult process of selling your home and moving to another home.
HAFA gives you several benefits:
- HAFA streamlines the short sales and DIL processes to make it easier for you to work with the servicer.
- You receive a check for $3,000 at closing to help with your moving costs.
- You will be fully released from future liability for your fi rst mortgage debt (no cash contribution, promissory note or defi ciency judgment is
allowed). Also, any junior lien holder who accepts a HAFA incentive must also release you from future liability.
Mortgage servicers who participate in HAMP are required to see if you qualify for a loan modifi cation before deciding if you qualify for HAFA. To qualify for HAMP, you must meet these basic eligibility requirements:
- The property must be your primary residence.
- The first lien (your first loan on your home) must have been originated before January 1, 2009.
- The mortgage must be delinquent or default must be reasonably foreseeable.
- The current unpaid principal balance may not be more than $729,750 (there are higher limits for 2- to 4-unit dwellings).
- Your total monthly payment must exceed 31% of your gross income
Even if you meet these threshold requirements, the servicer must consider your particular circumstances. Not everyone will qualify. Sometimes the owner of the mortgage has rules that mean you or your home may not be eligible. That’s why it is so important to work closely with the servicer. Loans that are owned or guaranteed by Fannie Mae or Freddie Mac will be eligible under HAFA, but only after they make changes to the rules to fi t with their programs.