If your debt situation has gotten out of hand and you fear losing your Connecticut home to foreclosure, you may wish to consider the Home Affordable Foreclosure Alternatives program. As HomeOwnership.org explains, HAFA is a federal governmental program that gives you a foreclosure alternative if you wish to short sell your home or give a deed in lieu of foreclosure to your mortgage lender.
You must meet all six of the following criteria to receive HAFA help:
- You must be undergoing a documented financial hardship.
- You must have purchased your home more than 12 months ago.
- You must have a first mortgage less than $729,750.
- You must have obtained your mortgage prior to Jan. 1, 2009.
- You must have had no felony convictions in the preceding 10 years for such real estate related crimes as theft, larceny, fraud, tax evasion or money laundering.
- Your mortgage must be owned or guaranteed by Fannie Mae and Freddie Mac.
Should you qualify for HAFA protection, your mortgage lender must give you the opportunity to attempt a short sale of your home or to offer to give your home back by way of a deed in lieu of foreclosure. Either of these foreclosure alternatives relieves you from any and all future responsibility for your first mortgage debt. In addition, many lenders have a Cash for Keys program whereby they give you $3,000 in cash to help pay for your relocation expenses.
Bear in mind that once your financial situation improves and you decide to buy a new home, mortgage lenders may well ask you if you had either a foreclosure or a deed in lieu of foreclosure in the past seven years. While you can answer “no” to a foreclosure, you must reveal your HAFA foreclosure alternative solution if it happened less than seven years prior to your new home loan application.
This is educational information and not intended to provide legal advice.