The government’s Making Home Affordable Program, which included the Home Affordable Modification Program (HAMP) and the Home Affordable Foreclosure Alternatives Program (HAFA), was developed in 2009 to help homeowners avoid foreclosure, stabilize the housing market, and improve the overall economy.
Unfortunately, the HAMP program has stopped accepting new applications and servicers stopped offering HAFA after December 30, 2016.
- HAMP was a loan modification program that assisted borrowers by rewriting first lien mortgages so that the monthly payments were lower and more affordable.
The HAFA program provided two options so that borrowers could avoid foreclosure: short sales and deeds in lieu of foreclosure.
What happens now:
While most of the programs under MHA, including HAMP and HAFA have ended, the federal government’s Home Affordable Refinance (HARP) program—a mortgage refinance option—is available through 2018. With HARP, you might be able to get a lower interest rate on your mortgage loan, get a shorter loan term, and/or change your interest rate from an adjustable to fixed rate.
Even though HAMP and HAFA are done, you might qualify for another type of loss mitigation (foreclosure avoidance) program through your servicer or the owner of the loan. For example, to replace HAMP, Fannie Mae and Freddie Mac, the government-supported enterprises that own or back many mortgages, developed the Flex Modification program.
Also, in-house (“proprietary”) modifications, forbearance agreements, or repayment plans are typically available as well. If you decide that it’s time to give up the property, you might be able to arrange a short sale or deed in lieu of foreclosure.
NOTE ON HAFA – A program of the past
The HAFA short sale program, effective from April 5, 2010, through December 31, 2016, was touted as the answer to every short sale agent’s nightmare. However HAFA is over. It will accept no new new applications after January 1, 2017, and existing files must close by September 30, 2017. HAFA initially promised short sale approval within 10 days and gives the seller up to $10,000 in cash at closing.
But because HAFA is a government-sponsored program, it’s a lot more complicated than that.
HAFA is an acronym for Home Affordable Foreclosure Alternatives, and it’s part of President Obama’s Making Home Affordable Program. The first step is for a borrower to apply to HAMP, Home Affordable Modification Program. Here are the rules to be eligible for the HAMP program:
- Only personal residences are eligible.
- The mortgage amount must be less than $729,750.
- The borrower suffers a hardship such as loss of income, an increased mortgage payment or an unexpected increase of expenses.
- The mortgage originated before January 1, 2009.
- The PITI mortgage payment, including HOA, is more than 31% of the borrower’s gross monthly income.
If any one of the 5 rules do not apply, then the borrower is not eligible for HAMP