Home Affordable Foreclosure Alternatives Program

The Home Affordable Foreclosure Alternatives (HAFA) Program provides additional options to avoid costly foreclosures and offers incentives to borrowers, servicers and investors who utilize a short sale or deed-in-lieu (DIL) to avoid foreclosures.

HAFA alternatives are available to all HAMP-eligible borrowers who:
  • do not qualify for a Trial Period Plan

  • do not successfully complete a Trial Period Plan

  • miss at least two consecutive payment during a HAMP modification

  • request a short sale or deed-in-lieu

In a short sale, the servicer allows the borrower 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. Generally, if the borrower makes a good faith effort to sell the property but is not successful, a servicer may consider a DIL. With a DIL, the borrower voluntarily transfers ownership of the property to the servicer – provided title is free and clear of mortgages, liens and encumbrances. With either the HAFA short sale or DIL, the servicer may not require a cash contribution or promissory note from the borrower and must forfeit the ability to pursue a deficiency judgment against the borrower.

HAFA simplifies and streamlines the short sale and DIL process by providing a standard process flow, minimum performance timeframes and standard documentation.

The guidelines for HAFA are detailed further in the documents that can be found in the Making Home Affordable website.

Guide to Nevada’s Foreclosure Mediation Program

The State of Nevada is still one of the country’s hotbeds of foreclosure. Recently, legislation has been passed to address the crisis and in a solid effort to help keep Nevadans in their homes. Assembly Bill 149 was passed by the Nevada legislature during the 2009 session and signed by Governor Jim Gibbons, and establishes a Foreclosure Mediation Program for homes that are subject to foreclosure notices – formally known as a Notice of Default (or Breach) and Election to Sell – filed on or after July 1, 2009. To qualify for the program, a property must be a homeowner’s primary residence and located in Nevada.

Below are key highlights of the Foreclosure Mediation Program. We have included a link to the website here for more in-depth discussion of the program, access to forms, FAQs and other resources.

Mediation is an alternative method to help parties resolve disputes by agreement with the help of trained mediators. Mediating a foreclosure action has its advantages. It is fast, inexpensive, and offers a flexibility that more formal processes do not.

Home foreclosures impact both the homeowner and the lender. Homeowners do not want to lose their homes and mortgage lenders do not want to be in the real estate business.

Both sides may benefit through foreclosure mediations.

You can play a major role, with the help of a trained mediator, in deciding the outcome of your individual dilemma. Mediation is a give-and-take process in which the parties work to reach a mutually acceptable resolution to a mutual problem. Resolutions reached through foreclosure mediations are compromises that offer advantages to lenders as well as homeowners.
If you have the ability to meet the other party half way, everyone may benefit.

  • Can you, as a homeowner, make your mortgage payments if your home loan is modified?
  • Can you, as a lender in today’s real estate market, modify a loan to the extent that the homeowner can perform?

If the answers are YES, the Foreclosure Mediation Program may be able to save another Nevada home.

Sometimes the parties will not be able to reach an agreement, even with the help of a trained mediator, and the home will be lost to foreclosure. That is a reality in today’s economy.

But by working together to explore the various options, the hope is that a homeowner can avoid foreclosure and continue living in the home they purchased. If the mediation is successful, the homeowner may also avoid the stigma of foreclosure that can affect a person’s ability to obtain credit for years to come.

However, if a homeowner does not have the financial ability to make mortgage payments, even if the loan is modified, foreclosure may ultimately result.

Proposed Supreme Court rules limit mediations to four hours and require that mediations be conducted within 90 days of a foreclosure notice being filed.

Those same rules also require that all decision makers be present for the mediations. That means, if an agreement is reached, it can be finalized quickly.

Other than the filing fee paid by the lender, the cost of mediation is $400, shared equally by the homeowner and the lender. Each party must pay their $200 portion prior to the mediation.

A lawyer is not required to be present with you in the mediation process, but each side is welcome to have an attorney represent them.

Within 10 days of the mediation, the mediator will prepare the necessary Statement of Agreement or Non-agreement and serve it on the parties. The original will be filed with the Foreclosure Mediation Program Administrator and the mediation will be closed. If there is an agreement, the parties will execute the appropriate documents. If there is no agreement, the parties will be free to pursue other legal remedies.

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