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What the Heck is HAFA? The 411 on This Home Loan Headache

Facing foreclosure? Yeah, that’s rough – but we’re here to spell out the deal on an option that could help: the “HAFA” program.

Listen close, because this one’s a doozy: HAFA stands for Home Affordable Foreclosure Alternatives. Rolls right off the tongue, doesn’t it?

The HAFA Rundown: Dodging the Bullet of Foreclosure

Here’s the sitch: HAFA is a federal program from 2009 – part of the whole Making Home Affordable enchilada – designed to give homeowners an out when they can’t make those pesky mortgage payments.

Instead of banks throwing folks out on their keisters through foreclosure, HAFA lets borrowers:

  • Do a short sale – Selling the home for less than what’s owed on the mortgage. Bye, house – hello, hitting reset.
  • Get a deed-in-lieu of foreclosure – Just handing over the keys, with the bank’s blessing, and walking away. No harm, no foreclosure on your record.

The clincher? If you play by HAFA’s rules, your lender agrees to eat the remaining mortgage debt after the short sale or deed-in-lieu. Talk about a sweet deal, right? You avoid foreclosure’s beating to your credit score.

But Here’s the Rub with HAFA…

The program’s set to end any day now – as in, it already freakin’ expired on December 31, 2016! But don’t panic just yet:

Most major lenders are still honoring HAFA for old loans. Why? Cause these big boys agreed to the HAFA guidelines by taking bailout money from Uncle Sam.

So, what do you do, if you get hit – with one of these mortgages gone rogue? Hunt for a lawyer, and fast. They’ll know the moves to keep your lender in line and MAKE them consider HAFA or another foreclosure alt.

Bottom line: HAFA was a program that gave struggling homeowners an escape hatch from the jaws of foreclosure. It’s mostly over now – but with the right legal eagles on your side, you may still be able to snag its get-out-of-jail-free card.

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