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New Options For Homeowners - The HAFA Program (Home Affordable Foreclosure Alternatives)'s short sale program offers relief to distressed homeowners via the HAFA Program (Home Affordable Foreclosure Alternatives)

SAN DIEGO, CA (PRWEB) April 6, 2010 - With foreclosures still rising, interest rates likely to go up and the government's HAMP loan modification program stalled on the tracks, HAFA (the Home Affordable Foreclosure Alternatives) initiative might provide lenders and homeowners with some light at the end of the tunnel.

An expansion of the Home Affordable Modification Program (HAMP), HAFA offers a streamlined process for short sales and deeds-in-lieu that will allow homeowners to discharge their first mortgage debt without the credit-destroying step of foreclosure. And, in a small stroke of governmental genius, it provides a $1,000 incentive to banks to permit short sales and a $1,500 bonus to homeowners for the purpose of relocation.

According to Brian Yui, CEO of San Diego real estate brokerage, "This program could save countless homeowners from foreclosure. HouseRebate has a fleet of agents who specialize in short sales. They are expert negotiators and are intimately familiar with the HAFA program. It is critical for home owners who wish to participate in this program to work with experienced agents to realize the best outcome."

The HAFA program, like its big brother HAMP, has eligibility guidelines. The property must be the owner's principal residence, the first mortgage must predate 2009, the unpaid principal must be less than $729,750 for a single-family dwelling, the borrower's monthly payment must exceed 31% of their gross income, and the mortgage must either be delinquent or a default be reasonably foreseeable.

Once these criteria are met, borrowers will receive pre-approved short sale terms from their lender, including the minimum acceptable proceeds of the sale, before listing their property with a Realtor and have 120 days-with extensions permitted up to a total of 12 months-to sell their property. Based on the short sale agreement with the lender, HAFA requires property owners to be fully released from any future liability on their first mortgage debt, and in some cases, subordinate debts, so that when the home is sold, the borrower is free and clear of their mortgage.

So is there a market for short sales? "We have cash buyers lined up to take advantage of short sales," says Yui of These are people who are able to purchase distressed properties quickly, relieving home owners of their debt burden. It's a win-win situation, something we haven't seen for a while in this difficult market."

The program ends on December 31, 2012. HAFA does not apply to FHA or VA loans. As with any government program, there is a good deal of paperwork, albeit standardized, so homeowners wishing to take advantage of the relief offered should work with a Realtor experienced in short sales.