If your mortgage payment is unaffordable and you want to avoid foreclosure, you may be eligible for a short sale or deed-in-lieu of foreclosure through the Home Affordable Foreclosure Alternatives. The benefit of a HAFA short sale is that you are no longer responsible for the difference between what you owe on your mortgage and the amount that your home sells for. You will also receive $3,000 in relocation assistance upon successful closing of your short sale or deed-in-lieu of foreclosure.
In a short sale your servicer will allow you to list and sell your home and will agree to accept the net proceeds from the sale even if the proceeds are less than the total amount due on the mortgage.
Servicers may also offer to accept a deed-in-lieu of foreclosure through which you voluntarily transfer ownership of your home to the servicer. Many servicers require homeowners to try to sell their home before they will accept a deed-in-lieu of foreclosure.
You may be eligible* to apply if you meet all of the following:
- You live in the home or have lived there in the last 12 months.
- You have a documented financial hardship.
- You have not purchased a new house within the last 12 months.
- Your first mortgage is less than $729,750.
- You obtained your mortgage on or before January 1, 2009.
- You must not have been convicted within the last 10 years of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction.
*Eligibility criteria are for guidance only. Contact your mortgage servicer to see if you qualify for HAFA. For more information, visit www.MakingHomeAffordable.gov or call 1-888-995-HOPE (4673).