(Short Sales and HAFA) In April, 2010, President Obama proposed his plan to provide uniformity and to shorten the short sale process. This plan was called “Home Affordable Foreclosure Alternatives” (HAFA), and was proposed as an alternative for a failed HAMP (Home Affordable Modification Program). Just as HAMP is a big failure, so has HAFA, until recently.
Several lenders have recently indicated that occasionally a short sale seller may qualify for a HAFA short sale. Even though there have been very few successful HAFA closings, it definitely is a strategy to buy more time for a Seller to obtain a short sale contract. Under HAFA, the lender will pre-approve a sales price for the house, will provide sufficient time to obtain a contract, will pay a full 6% real estate commission, will pay the Seller a relocation allocation, and will agree to no deficiency.
Even if the lender does not allow the streamlined HAFA short sale, they will usually allow a conventional short sale. Hopefully, as more lenders realize that short sales are going to be with us for the foreseeable future, they may embrace HAFA or at the very least streamline some of their short-sale procedures. Only time will tell!
Please contact our firm if you have questions or need legal advice.
Tucker Griffin Barnes P.C.