By ray Williams
President and founder
Greenway Capital Management
Why You Have to Know HAFA
if underwater borrowers can’t refi or get a loan mod, alternatives to foreclosure exist
When faced with distressed cli- ents who cannot qualify for a refinance or a loan modification, mortgage brokers may think
there’s nothing else they can do to
help. Brokers can, however, tell their clients about some government programs
meant to help underwater homeowners, such as the Home affordable Foreclosure alternatives (HaFa) program.
Many homeowners who can no longer afford their mortgage payments
will simply let their lenders foreclose
on the properties without ever hearing about or knowing the benefits of
HaFa. Brokers are well-positioned to
advise their clients about the program,
particularly when a lender has turned
down the borrowers’ refinance or modification application and the borrowers feel they have no other option than
The federal government’s Making
Home affordable program includes
various options to help troubled home-
owners. Brokers likely are familiar
with the Home affordable Refinance
Program, the Home affordable Mod-
ification Program and the Second
Lien Modification Program. The com-
prehensive program also includes
temporary assistance to unemployed
homeowners via the Home affordable
from charging upfront fees for mort-gage-relief services such as loan modifications or foreclosure-avoidance
Through HaFa, distressed homeowners who use a short sale or a deed-in-lieu of foreclosure may be entitled to
receive $3,000 for relocation expenses.
Usually, borrowers will receive funds at
the closing of a short sale or within five
days after the servicer’s acceptance of
a deed-in-lieu, provided they have vacated the property and left it in acceptable condition.
Further, if homeowners who have
vacated their home and rented another property can document that the
home was their principal residence in
the 12-month period before the date of
the short-sale agreement, alternative
request for approval of short sale or
deed-in-lieu of foreclosure agreement,
they may be eligible for the HaFa relocation expense. They must provide the
documentation and must not have purchased another one- to four-unit property in the 12 months before that date.
In addition, according to HaFa guidelines, the borrowers’ relocation does
not need to be connected to re-em-ployment or transfer of employment,
and there is no minimum-distance
Mortgage professionals who arm
themselves with this valuable information can help homeowners better understand their choices and therefore
make educated decisions regarding
the best route to take in trying to avoid
ray Williams is the president and founder of
Greenway Capital Management, a company
that works with homeowners, real estate
agents, lenders and mortgage-servicing
companies to prevent foreclosures. Williams is
a former mortgage loan officer and loan-offi-cer-licensing educator. He currently provides
foreclosure-prevention training to homeowners
nationwide. The company provides education,
counseling and mentoring services nationwide.
Reach Williams at (888) 318-4069, ext. 700.
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