Home Affordable Foreclosure Alternatives (HAFA)
What is Making Home Affordable all about? The Making Home Affordable Program is part of the Obama Administration's broad, comprehensive strategy to get the economy and the housing market back on track. The Making Home Affordable Program offers strong options for homeowners:
- Home Affordable Refinance Program (HARP) - refinancing mortgage loans
- Home Affordable Modification Program (HAMP) - modifying first mortgage loans through the
- Second Lien Modification Program (2MP) - modifying second mortgage loans
- Home Affordable Foreclosure Alternatives Program (HAFA) - offering other alternatives to foreclosure
About Servicers
- Who is my servicer? Is my servicer the same as my lender or investor?
- Is my servicer participating in MHA?
- What should I do if my servicer tells me that the investor is not participating in the Making Home Affordable Program?
Home Affordable Foreclosure Alternatives Program (HAFA)
- What other alternatives to foreclosure exist within the Making Home Affordable Program?
- How does the HAFA Short Sale work?
- How does the HAFA Deed-in-Lieu of Foreclosure work?
- How can I be considered for HAFA?
Beware of Foreclosure Rescue Scams - Help Is Free!
- What are some of the warning signs of scams or fraud?
- What should I do if I've been scammed?
About Servicers
1. Who is my servicer? Is my servicer the same as my lender or investor?
Your loan servicer is the financial institution that collects your monthly mortgage payments and has responsibility for the management and accounting of your loan. It is possible that the owner of your mortgage also services it, however many loans are owned by groups of investors and these investors hire loan servicers to interact with homeowners on their behalf. Many lenders also have the loan servicers handle all contact with homeowners.
Traditionally, banks used money deposited in customers' savings accounts to make loans. They held the loans, earning the interest as homeowners repaid over time. Banks were thus limited in the number of loans they could make because they had to wait to make new ones until savings deposits grew or existing homeowners repaid their loans. Many families who wanted to own a home were unable to do so because there was not a steady supply of money for banks to lend.
Over time, banks started to turn loans into cash by pooling large groups of loans together to create mortgage backed securities that could be sold to investors such as pension funds and hedge funds. The investors get the right to collect future payments and the bank gets cash that it can use to make more loans. Investors hire loan servicers to collect payments and interact with customers.
If you have questions about your loan, or you are behind on your payments, you should call your loan servicer at the number on your payment coupon or monthly mortgage statement.
2. Is my servicer participating in MHA?
All servicers for loans owned or guaranteed by Fannie Mae and Freddie Mac are required to participate. Additional servicers are strongly encouraged to participate. The list of servicer participants will be updated at www.MakingHomeAffordable.com/contact_servicer.html. (See How do I know if my loan is owned or has been guaranteed by Fannie Mae or Freddie Mac?
3. What should I do if my servicer tells me that the investor is not participating in the Making Home Affordable Program?
Check to see if your servicer is listed on our servicer participant list. Keep in mind that all servicers for loans owned or guaranteed by Fannie Mae and Freddie Mac are required to participate with respect to those loans. (See How do I know if my loan is owned or has been guaranteed by Fannie Mae or Freddie Mac?)
If your servicer is on our participant list, or your mortgage is owned or guaranteed by Freddie Mac or Fannie Mae, call your servicer back and ask to speak to a supervisor. You may also contact a HUD-approved housing counselor for assistance.
If your servicer is not participating in the Program, ask your servicer or a housing counselor about other options that may be available. Home Affordable Foreclosure Alternatives Program (HAFA)
1. What other alternatives to foreclosure exist within the Making Home Affordable Program?
The Making Home Affordable Program will include additional foreclosure avoidance options through the Home Affordable Foreclosure Alternatives (HAFA) Program. While the HAFA Program becomes effective April 2010, servicers may participate immediately, or as soon as is practical. The primary options available through HAFA include Short Sale and Deed-in-Lieu of Foreclosure.
2. How does the HAFA Short Sale work?
In a Short Sale, the homeowner sells the property for less than the full amount due on the mortgage. When a homeowner qualifies for the HAFA Short Sale, the servicer approves the Short Sale terms prior to listing the home and then accepts the payoff in full satisfaction of the mortgage.
3. How does the HAFA Deed-in-Lieu of Foreclosure work?
With the Deed-in-Lieu of Foreclosure, the homeowner voluntarily transfers ownership of the property to the servicer in full satisfaction of the total amount due. The servicer may require that the homeowner list and market the property before they agree to a deed-in-lieu arrangement. In order for the Deed-in-Lieu of Foreclosure to work, the homeowner must provide a marketable title, free and clear of other mortgages, liens, or other encumbrances.
4. How can I be considered for HAFA?
A participating servicer must consider a homeowner for HAFA if the borrower requests a short sale or deed-in-lieu under HAFA, and a servicer will also consider a homeowner for HAFA within 30 days of the date the homeowner:
- does not qualify for HAMP; or
- does not successfully complete a HAMP trial period; or
- misses at least two consecutive payments on a HAMP modification.
However, before evaluating a homeowner for HAFA, a participating servicer must first consider that homeowner for other loan modification or retention programs that they offer. In addition, pursuant to the servicer's policies, every eligible homeowner must be considered for HAFA by a participating servicer before the homeowner's loan is referred to foreclosure and before the servicer may allow a pending foreclosure sale to continue.
Beware of Foreclosure Rescue Scams - Help Is Free!
1. What are some of the warning signs of scams or fraud?
- There should never be a fee for assistance with or information about the Making Home Affordable Program.
- Beware of any person or organization that asks you to pay an upfront fee in exchange for a counseling service or modification of a delinquent loan. Do not pay! walk away!
- Beware of anyone who says they can "save" your home if you sign or transfer over the deed to your house. Do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.
- Never make your mortgage payments to anyone other than your mortgage company without their approval.
- The Obama Administration has launched a coordinated effort across federal and state government and the private sector to target mortgage loan modification fraud and foreclosure rescue scams that threaten to hurt American homeowners and prevent them from getting the help they need during these challenging times.
2. What should I do if I've been scammed?
- First, get the help you need to avoid foreclosure. Contact your servicer immediately.
- Contact a HUD-approved housing counselor through the Homeowner's HOPETM Hotline at 888-995-HOPE (4673).
- To learn about foreclosure rescue scams, go to www.MakingHomeAffordable.gov/beware. To file a complaint or to get free information on fraud and other consumer issues, contact the Federal Trade Commission at www.ftc.gov/consumerprotection or 877-FTC-HELP (4357).