Short Sales and the Home Affordable Foreclosure Alternatives (HAFA)

Below is a brief write-up on the Home Affordable Foreclosure Alternatives Program offered by the US Treasury through mortgage services still under their control by way of receiving TARP or other bailout funds.

Home Affordable Foreclosure Alternatives Program (HAFA)

A list of servicers (lenders) participating in HAMP (including HAFA) is available at:

Key HAFA Provisions

*Complements HAMP by providing a viable alternative for borrowers (the current homeowners) who are HAMP eligible but nevertheless unable to keep their home.

*Uses borrower financial and hardship information already collected in connection with consideration of a loan modification.

*Allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).

*Requires borrowers to be fully released from future liability for the first mortgage debt (no cash contribution, promissory note, or deficiency judgment is allowed).

*Uses standard processes, documents, and timeframes/deadlines.

*Servicer is required to provide a decision on a short sale price within 10 days.

*Provides the following financial incentives:

a. $3,000 for borrower relocation assistance;

b. $1,500 for servicers to cover administrative and processing costs;

c. Up to $2,000 for investors who allow a total of up to $6,000 in short sale proceeds to be distributed to subordinate lien holders, on a one-for-three matching basis.

For a complete list of the documents and disclosures for the program then please visit:

The website for generic information, but is the best place to start is:

Program is effective April 5th, 2010

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