HAFA REBORN

HAFA REBORN

A grand total of only 342 families have been able to run the gauntlet of rules and regulations to complete the HAFA (Home Affordable Foreclosure Alternatives) program since its inception last year. This miniscule number does not engender confidence in the HAFA program. In fact the U.S. Treasury has only spent $ 4.3 million dollars on the program while they have spent $4 BILLION on the HAMP (Home Affordable Modification Program).

The major impediments have been identified as 1) junior lien holder's dissatisfaction with proposed loan payoffs; 2) lack of efficient guidelines and 3) lack of loan services adherence to program deadlines.

The government realizes that changes must be made if the program is going to help more distressed families. Tomorrow, February 1. 2011, they have made changes in program guidelines. These changes do NOT apply to GSE mortgages (those owned by Fannie Mae and Freddie Mac). There may be similar changes to the GSE mortgages in the near future.

The changes ease the income requirements, property vacancy requirements, the amount that junior lien holder receive and implement time lines for servicers with respect response times. There are also changes in Deed-In-Lieu alternatives and borrower notice time lines.

One big issue is that they allow loan servicers to consider past applicants who were rejected under the old guidelines. So some of who were rejected may now qualify.

This is excellent news for distressed home owners. It may be worth their time to revisit the HAFA web site and apply once again. Here is the link:

http://www.makinghomeaffordable.gov/hafa.html