The Home Affordable Foreclosure Alternatives (HAFA) Program was enacted as part of the Homeowner Affordability and Stability Plan (HASP) in 2009 as a reaction to the subprime mortgage crisis and subsequent economic slowdown. The HAFA program offers borrowers options of short sales or deeds in lieu to get out from under mortgages they can no longer afford to make payments on. HAFA short sales differ from traditional short sales, in that the borrower does not owe the difference between the original purchase price and the final sale price. This saves the borrower from further hardship and does not affect their credit score as negatively as a foreclosure. Additionally, the program offers other benefits to both lenders and borrowers, such as subsidies to cover administration costs and up to $3,000 in relocation assistance.

Currently, the HAFA program is scheduled to sunset on December 31, 2013. This means that if you wish to participate in the program, you need to submit a Request for Mortgage Assistance (RMA) by the deadline date. To be safe, you should make arrangements that the RMA arrives by the sunset date, and is not simply post-marked on the date. Additionally, the deal must be closed by October 1, 2014. As with all federal programs, HAFA may get extended, but do not count on it. It is important to begin the process as soon as possible.

Participation in the HAFA program is contingent on a number of eligibility requirements and completion of numerous forms. It is highly advised you consult with an experienced real estate attorney to work with your mortgage provider to ensure you obtain favorable terms and the process is followed correctly.

Stephen K. Hachey, a Florida real estate attorney can help your wade through this difficult process and determine a positive solution. Contact him at 813-549-0096.

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This post was written by Stephen Hachey. Follow Stephen on Google, Facebook, Twitter & Linkedin.