Some homeowners may feel that they can no longer afford their home, even with modified payments. These homeowners still want to avoid the devastating effects of foreclosure. The Home Affordable Foreclosure Alternatives (HAFA) Program makes it easier for homeowners to work with their mortgage servicer to sell their home (short sale) or deed it to the bank (deedin-lieu of foreclosure).
In a short sale, the servicer allows the homeowner to list and sell the mortgaged property and agrees to accept the net proceeds from the sale even if the proceeds are less than the total amount due on the mortgage.
Under HAFA, after a short sale or deed-in-lieu is successfully completed, a homeowner is cleared of all remaining debt and obligations on their first lien mortgage to their mortgage servicer, and is eligible for $3,000 to help with moving expenses. For many homeowners, these solutions are the safest way to transition to more affordable housing.