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Home Affordable Foreclosure Alternatives

Important Notice

Treasury’s HAFA program ends on December 31, 2013. However, Freddie Mac’s participation in the program expired on December 31, 2012. The materials on this Web page are only applicable to borrower evaluations on Freddie Mac mortgages conducted on or before December 31, 2012. The Freddie Mac Standard Short Sale is available for borrowers evaluated after December 31, 2012.

The Home Affordable Foreclosure Alternatives (HAFA) initiative is a component of the Making Home Affordable Program (MHA). HAFA offers additional options to eligible borrowers who did not qualify for or complete a permanent modification under the Home Affordable Modification program (HAMP) or another home retention option to avoid foreclosure. HAFA solutions help stabilize communities by limiting foreclosures in surrounding neighborhoods and allow affected borrowers to transition into more affordable housing.

Freddie Mac’s participation in HAFA expired on December 31, 2012.

 

Reporting and Incentives

Reporting Requirements

Below are high-level reporting requirements for both HAFA Short Sales and HAFA Deeds-in-Lieu. For specific requirements, refer to Guide Section D65.10.

HAFA Short Sales Reporting

Depending on the state of the HAFA Short Sale, Servicers will need to report the following codes through EDR to Freddie Mac:

  • HB – "Short Sale in Review": To report the mortgage is being reviewed for a short sale.
  • HC – "Ineligible for Short Sale": To report the borrower is ineligible for a short sale.
  • HF – " Short Sale Agreement (SSA) – Borrower Execution": To notify us that the borrower has executed the SSA.
  • HAF – "Home Affordable Foreclosure Alternative": To be used together with 09 Forbearance Plan while the mortgaged property is in the marketing period.

HAFA Deed-in-Lieu Reporting

To close a HAFA Deed-in-Lieu with Freddie Mac, Servicers must:

  1. Report the transaction through MIDANET® for the PC or the Service Loans application, using the Foreclosure Sale/DIL transmission within one business day of receiving the executed deed.
  2. Within five business days, fax to Freddie Mac proof that the subordinate liens have been paid or released along with a copy of the executed deed showing conveyance between the borrower and Freddie Mac.
  3. Report the mortgage as a transfer to REO through MIDANET or the Service Loans application.

Incentive Compensation

Servicer Incentives 

  • $2,200 for each successfully completed HAFA Short Sale.
  •  $1,500 for each successfully completed HAFA Deed-in-Lieu.

Borrower Incentives

  • $3,000 will be paid to the borrower to help with relocation expenses after a completed HAFA Short Sale or HAFA Deed-in-Lieu.

Subordinate Lien Holder Incentives

  • Six percent of the outstanding unpaid principal balance of each subordinate lien in order of lien priority, with an aggregate total of $6,000 to all lien holders, will be offered in exchange for releasing their liens and satisfying the underlying debts.

Servicers must refer to Guide Section D65.8 for specific details on HAFA’s Servicer and borrower incentive compensation. Refer to Guide Section D65.7(b) for requirements and details on the subordinate lien holder incentive.

Announcements

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Single-Family Advisory E-mails and News Articles

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