Fannie Mae, Freddie Mac Loans Now Eligible for HAFA Short Sale Program

As of August 1, 2010, Fannie Mae & Freddie Mac insured loans are now eligible for the government HAFA short sale program. HAFA, which stands for Home Affordable Foreclosure Alternative, was launched in April of 2010, but did not apply to government insured loans, even though the program is administered through Fannie & Freddie.

HAFA was designed to expedite and streamline the short sale process. HAFA requires lenders to respond to short sale offers within 10 business days and outlines a uniform set of seller documents that are required for lenders to evaluate and approve short sales. HAFA also prevents lenders from foreclosing on borrowers once they are in the HAFA program (the lender must do a deed in lieu of foreclosure if the short sale does not go through), prohibits lenders from pursuing any deficiency judgement after the short sale (all debt is forgiven, so the seller walks away with a settled debt) and requires lenders to credit sellers $3,000 for moving expenses at close of escrow.

To find out if you are eligible for HAFA, contact The Cutka Team at 951-719-6132 or visit our website at www.cutkarealestate.com.