HAFA short sale relocation funds expiring soon

Posted: 9/21/2016

The Home Affordable Foreclosure Alternative (HAFA) program is a federally backed short sale program aimed at assisting distressed homeowners. The program offers many benefits, including possible relocation funds of up to $10,000. Currently, HAFA is set to expire at the end of this year and all applications must be submitted before December 30, 2016. Those homeowners who have been contemplating about doing a short sale or who will have a mortgage payment increase may want to plan accordingly.

There is concern growing about the next set of adjustable loans and those who have been participating in loan modification programs. Many homes purchased between 2006 and 2008 had loans structured in a way in which interest was deferred or not paid on the loan for 10 years. After their introductory rates, these loans or lines of credit will have increased payments. This year it is estimated that 579,740 upside-down properties will have monthly payments increase an average of $140. Another 541,650 seriously upside-down properties are due to have a loan reset in 2017, followed by 230,490 in 2018.

"Those people would have a lot of trouble refinancing those HELOCs because they don't have the equity," said Daren Blomquist, a senior vice president at RealtyTrac. The housing market is expected to cool down through next year, with many areas forecasted to see appreciation at one percent or less.