As of April, 2010 government incentives were extended to banks that participated in certain Deed-in-Lieu of Foreclosures and Short Sales (for more information of these two types of foreclosure alternatives please read the Deed-In-Lieu of Foreclosure and Short Sale articles). This program is called Home Affordable Foreclosure Alternatives Program (HAFA).
Keep in mind that that prior to be considering for any type of alternative modification of HAFA the Servicer/Lender will first consider you for HAMP. If a homeowner is rejected for HAMP Servicers/Lenders have been instructed to consider other types of loan modifications prior to considering a homeowner for HAFA. This speaks to the government’s desire that Servicer/Lender work to keep homeowners in their homes as opposed to seeking an alternative solution.
If the Servicer/Lender is unable to find a non-HAMP modification program (commonly referred to as an In-House Mod) they will then consider the homeowner for HAFA. All homeowners must be considered for HAFA if they:
(1) Fail to qualify for HAMP,
(2) Fail to successfully complete a HAMP Trial Plan, OR
(3) Miss 2 consecutive HAMP trial plan payments.
In addition, Servicers/Lenders must consider a homeowner for HAFA prior to sending the case to a foreclosure firm to start the foreclosure process & before moving for a foreclosure sale.
Since the HAFA program is new many of the parties involved with the application are not accustomed to the process. Banks will likely be difficult to work with. The key is appropriately putting together the proper paperwork, keeping records of everything and constant phone calls to the servicer/lender and if the case is in foreclosure, the bank law firm. You can take care of this process on your own, but if you are interested in receiving help there are numerous law firms and organizations that can assist you in the process.
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