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QUALIFYING FOR HAFA: Homeowners eligible under HAMP must be considered for the HAFA program before the loan goes into foreclosure if the homeowner:

Does not qualify for a Trial Period Plan. HAMP requires homeowners enter a Trial Period Plan for their modified mortgage before getting a modification.

Homeowner is delinquent on a HAMP modification by missing at least two consecutive payments.

Under HAMP, borrower requests a short sale or deed in lieu.

Short sale process under HAFA:

Before a homeowner can be approved for a HAFA short sale, the lender must provide a listing price or a minimum amount it will accept for the sale.

A fixed termination date at least 120 days from the date the short sale agreement is given to the homeowner. The servicer may extend the agreement up to 12 months if agreed to by the homeowner.

Property must be listed with a licensed real estate professional who is regularly doing business in the community.

The servicer must determine the amount of closing costs and other expenses they will allow to be deducted from the gross sale proceeds. This must be a dollar amount, percentage of the list price or a list by category of reasonable costs.

The amount of the real estate agent’s commission must be determined and cannot exceed 6 percent of the contract sales price.

The homeowner will need to give a statement allowing the services to communicate the homeowner’s personal financial information to other parties as necessary to complete the transaction.

Cancellation and contingency clauses must be included in the listing notifying potential home buyers that the sale is subject to approval by the servicer and/or third parties.

The home buyer may not sell the property within 90 days of closing.

After the sale is completed, the homeowner is released from all liability for repayment of their first mortgage debt.

After the sale, the homeowner can receive up to $3,000 for moving costs.

The homeowner must be informed of income tax consequences and a possible hit to their credit score.