Home Affordable Foreclosure Alternatives Program (HAFA) was first introduced by the U.S. Treasury Department in February 2009 and was designed to streamline the short sale process by providing a uniformed process with standard forms as well as incentives for homeowners and their mortgage servicers to complete the process.

Like most government programs, this one came with strings and limitations and did not necessarily appeal to all mortgage servicers. Since then the treasury department has made changes multiple times to broaden its appeal. The intent in theory like any government program was about protecting the borrower with the goal of making them better off upon completion.

With that, two new forms have gone into effect: "Short Sale Notice" (SSN) and the "Acknowledgement of Request for Short Sale Form" (ARSS). Neither one needs to be completed and signed by the borrower like the previous ones, requiring the borrower to fill out completely only to have the servicer return it for being incomplete. This alone can cut weeks off the process.

Also as of Feb. 1, borrowers who are 90 days or more delinquent and have a FICO score of less than 620 will be deemed to have a "Pre-Determined Hardship" and will not need a hardship affidavit with supporting documentation to initiate a HAFA short sale.

If the borrower does not meet Advertisement

[ Murrieta Volkswagen ] this criteria, but stills has a hardship, they only need to complete the hardship affidavit to initiate a HAFA short sale. However, all borrowers will need to complete a hardship affidavit by closing.

A third change is to the HAFA affidavit itself. The buyer and seller must affirm:

the sale is an arm’s length transaction,

all agreements or offers relating to sale have been disclosed to the servicer,

no agreement exists that seller will remain in the property as a tenant or later obtain title to property,

neither party will receive funds or commissions from the sale except relocation assistance as recorded on the HUD1,

anyone receiving relocation assistance must vacate property as a condition of the sale,

seller also affirms that he/she occupies the property as their principal residence

Prior to Feb. 1, mortgage servicers were allowed up to 45 days to respond. That has been shortened to 30 days. When there is a subordinate lien holder the primary mortgage servicer can provide up to $8,500 of the gross proceeds for subordinate liens. That’s up from $6,000 prior.

Lastly, HAFA short sales may now be re-sold after 30 days. However, between 31and 90 days the sale price cannot exceed 120 percent of the HAFA short sale price. For details visit

www.MakingHomeAffordable.gov.

If you have questions, contact Mike Mason at Mike@GoTakeAction.com or (951) 296-8887.