Hello! Here is the information on the changes to the Home Affordable Foreclosure Alternative that went into effect on June 1, 2012:
- There is no occupancy requirement for HAFA and no limit on the number of properties that can be approved for HAFA. Previously, HAFA required homeowners to have lived in the property within the last 12 months.
- If the property is a rental property occupied by a tenant or non-borrower occupant, the $3,000 HAFA Relocation assistance must be paid to the tenant or non-borrower occupant and must be reflected on the HUD.
- Mortgage payments will be allowed to exceed 31% of the homeowner’s gross monthly income. Additionally, a borrower who is at risk of imminent default and at least 15 days delinquent can be considered. This update will allow a homeowner to stay current on the mortgage and still qualify, minimizing the overall impact to credit.
- Secondary lien holders may receive up to a maximum of $8,500, (up from $6,000 previously).
- The Credit Bureau Reporting will be Account Status Code 13 (paid or closed account/zero balance) or 65 (account paid in full/a foreclosure was started), as applicable.
These changes are great as they will allow borrowers with investment properties to qualify for HAFA and will less of an impact to the borrowers credit!