What HAFA Is and How It Helps with Foreclosure Prevention


Phoenix, AZ -- (SBWIRE) -- 05/01/2014 -- Foreclosure affects thousands of hard working families every year, leaving them scared, stressed, and worried. HAMP and HARP are programs that can stop foreclosure, but some folks don’t qualify for these plans. For them there’s HAFA, Home Affordable Foreclosure Alternatives. These affordable foreclosure alternatives include a few choices, and is here to explain them so they’re understandable. Here is what troubled homeowners facing foreclosure need to know:

- Defining HAFA
- Short Sale
- Deed-in-Lieu of Foreclosure
- Is HAFA a Good Choice

HAFA Clarified
What is HAFA? The acronym stands for Home Affordable Foreclosure Alternatives, and it’s a foreclosure preventative in which the borrower and the lender reach an agreement about how to satisfactorily sell a house so that both borrower and lender benefit. The program offers two different ways such a solution can be reached: a short sale or a deed-in-lieu of foreclosure. Both of these options encourage the borrower to sell his home either to another borrower at a reduced price or back to the lender.

Defining a Short Sale
A short sale occurs when a homeowner sells his home to another person for less than what he owes the lender. HAFA short sale guidelines are rather complex. For eligibility, one must have purchased the home prior to 2009. He has to consider the house his primary residence and must have been deemed ineligible for other foreclosure prevention programs. He must be HAMP (Home Affordable Modification Program) qualified, but he can be either current or delinquent on his loan. Lastly, he must also be able to prove his financial hardship.

Explaining a Deed-in-Lieu of Foreclosure
Simply put, a deed-in-lieu of foreclosure occurs when a borrower sells his property back to his lender. This is an alternative to a HAFA approved short sale, although one must take some time to really think this option through. While the deed-in-lieu does get the homeowner out of debt and prevents foreclosure, it benefits the lender also. Banks can re-sell the home for more than what was paid to get the former owner out of trouble. Consider that fact before accepting this option.

HAFA: The Right Choice?
HAFA is a great alternative to foreclosure, which remains on an individual’s credit reports for up to 7 years. However, keep in mind that this process does negatively affect one’s credit rating, although not so badly as foreclosure. When a person goes over his possible solutions to his financial difficulty, he may come to realize that the HAFA approved short sale is his best bet. To apply, contact a financial group that understands the process, such as, which can help one gather the requisite paperwork and find HAFA-approved lenders and other loan servicers.

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