These options are available for homeowners who:
1. do not qualify for a trial mortgage modification under the Making Home Affordable Program;
2. do not successfully complete the trial period for their modification;
3. miss at least two consecutive payments during their modification period; or
4. request a short sale or deed-in-lieu of foreclosure.
Short Sale
In a short sale, the servicer allows the homeowner to list and sell the mortgaged property with the understanding that the net proceeds from the sale may be less than the total amount due on the first mortgage.
Deed-in-Lieu of Foreclosure
Generally, if the borrower makes a good faith effort to sell the property but is not successful, a servicer may consider a deed-in-lieu of foreclosure. With a deed-in-lieu, the borrower voluntarily transfers ownership of the property to the servicer— provided the title is free and clear of mortgages, liens, and encumbrances.
The HAFA Program streamlines both of these options to make them easier for a homeowner to work with their servicer. Under the program, a homeowner can receive $3,000 to help with relocation costs.
