What Is The HAFA Incentive?
The Home Affordable Foreclosure Alternatives program (HAFA) was created by the Treasury Department to help homeowners who were in danger of losing their homes to foreclosure. The program offers HAFA incentives to help qualifying homeowners save their homes.
To gain access to certain HAFA incentives, one must typically be able to demonstrate a genuine financial hardship and provide supporting documentation.
Mortgage servicers who participate in HAMP (the Home Affordable Modification Program) must consider their borrowers for HAFA if the homeowners misses 2 consecutive payments under a HAMP modified loan, doesn’t complete the HAMP trial period, doesn’t qualify for a HAMP trial period in the first place, or requests a short sale or deed-in-lieu. Servicers have 30 days to consider the borrower for the HAFA program. When contacted, the borrower then has 14 days to respond to the offer of a HAFA program.
- $3000 for borrower relocation assistance
- $1,500 for administrative costs
- Up to $5,000 Matching funds for the mortgage owner
The money for relocation expenses can also be granted to a tenant or non-borrower occupant of the property. Under HAFA short sales, occupants will be required to vacate the premises, so the $3,000 HAFA incentive helps ease that transition. $3,000 is the maximum relocation incentive, regardless of how many occupants are forced to move.
The $1,500 for administrative costs helps the lender or loan servicer to process the transaction.
The third incentive reimburses $2 for every $3 paid to eliminate second loans (“junior liens”) up to a maximum of $5,000.
These incentives are offered to help homeowners avoid foreclosure more easily. If the short sale proceeds are greater than the amount due on the mortgage, then no incentives are paid.
If you are concerned about your mortgage, call us today for free, confidential counseling. We’ll look at your unique situation, answer your questions, and help you come up with the best recovery plan for you. Whether that’s HAMP or some other remedy, we’ll help you explore all of your options.