What is the Home Affordable Foreclosure Alternatives Program?

The Home Affordable Foreclosure Alternatives Program (HAFA) is a program in California that provides homeowners an alternative to foreclosure. In a foreclosure, the homeowner is evicted from their home and their credit is damaged. HAFA is a way to allow borrowers to avoid this and remain in their home. Under the program, lenders and owners of mortgages must offer short sales and deeds-in-lieu (DIL) of foreclosure to eligible borrowers. A short sale is when a lender allows the home to be sold for less than the full amount of the loan. A deed-in-lieu of foreclosure is when the borrower signs the title of the home over to the lender to avoid a foreclosure. Homeowners have to meet certain standards to qualify for the HAFA program. For example, they must have a hardship that caused them to miss payments and show that they cannot afford to remain in the home. Additionally, they must have a loan that was originated before January 1, 2009 and have a current loan balance of $729,750 or less. The HAFA program is beneficial to both the lender and the borrower. The lender takes a smaller loss than in a foreclosure and the borrower can avoid eviction and the damage to their credit. Ultimately, this program helps keep people in their homes and helps stop the decline of home values.

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What is the Home Affordable Foreclosure Alternatives Program?

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