The Home Affordable Foreclosure Alternative (HAFA) program helps homeowners avoid foreclosure by allowing them to perform a short sale with no liability from their mortgage debt. Eligibility includes documented hardship, a mortgage originated before January 1, 2009, and specific property conditions, among others. Working with an experienced real estate professional is crucial for navigating the short sale process effectively.

1. Short Sales Explained
AFA (Home Affordable Foreclosure Alternative) is
a federal government program designed for homeowners who
can no longer afford their mortgage payments and wish to
avoid the negative impacts of foreclosure when home retention is not
an option. Under HAFA, a homeowner can exit home ownership
gracefully and without the liability associated with their mortgage debt.
The Benefits of a HAFA Short Sale:
• No Deficiency Judgments
• No Cash Contributions at Closing
• No Promissory Notes
• $3,000 to Seller for Relocation Assistance
• Up to $8,500 from sales proceeds available as payment to additional
lien holders to release seller from future liability
Eligibility Requirements for a HAFA Short Sale:
• Property is SFR owner occupied, vacant, or rental property**
**check eligibility restrictions for Freddie Mac and Fannie Mae loans
• Seller must have a documented hardship
• Mortgage originated on or before January 1, 2009
• Mortgage is delinquent or default is foreseeable
• Current unpaid principle balance is $729,750 or less (1-4 units)
For more information about this program, please call me and I will help you
better understand a HAFA short sale.
H
“short sale” is a real estate transaction in which a home seller’s mortgage lender
agrees to accept a payoff that is less than the amount owed on the mortgage.
When homeowners find themselves with a serious financial hardship, and owe
more on the mortgage than the home is worth, a short sale may be a way to avoid
foreclosure by negotiating a settlement with the lender.
A successful short sale can be a “win” for all parties involved: the seller
is relieved of the financial burden of the mortgage, the losses taken by
the lender in the short sale can be significantly less than an eventual
foreclosure, and the buyer gets a fair deal on the purchase.
Negotiating a short sale is no easy task; therefore, homeowners
considering a short sale should work with a licensed real estate
professional who specializes in short sales. An experienced agent/broker will be well
qualified to guide a homeowner through the short sale process, facilitate communication
and interaction with the lender, assist with collection of lender-required documents, and
bring the transaction to a successful close.
A
Understanding the Short Sale Transaction
short sale requires an
experienced real estate agent
to navigate the transaction. If
you have family or friends who need
this expertise, please refer them to
me for professional guidance.
A
his newsletter
is dedicated
to educating
homeowners on short sale
transactions. If you are
considering a short sale,
I am available to discuss
options with you.
hort sale properties present a
variety of risks for a home
buyer. Homes are frequently
sold “as is” and the true condition of
the home’s systems and appliances
is likely unknown. Due to these
inherent risks, it is more important
than ever to include the
protection of an Old Republic
Home Warranty when purchasing
a short sale property.
Valuable benefits provided by a
home warranty include risk
reduction, budget protection, and
priceless peace of mind. The
warranty also provides coverage for
undetectable pre-existing conditions
that could surface after close-of-sale.
If you’re considering purchasing a
short sale home, I recommend
safeguarding your investment and
your budget with an Old Republic
Home Warranty. Call me today
for more information, or visit
www.orhp.com.
S
T
If you are working with another Real Estate Professional, please disregard this notice. The material in this publication is for your information only and not intended to be used in lieu of seeking additional consumer or professional advice.
What is a HAFA Short Sale?
RAMANA REDDY
CALHOMES
510 LAWRENCE EXPY STE 213
SUNNYVALE, CA 94085-4016
ramana@ramanareddy.com
Tel: (408) 732-2300
Mobile: (408) 242-9838
BRE Lic. #: 01348354
Home of Real Estate & Mortgage
510 LAWRENCE EXPY STE 213, SUNNYVALE, CA 94085-4016
Tel: (408) 732-2300, Mobile: (408) 242-9838, ramana@ramanareddy.com, http://www.CalHomes.org, BRE Lic.
#: 01348354

2. Basic Steps for a Short Sale Transaction
This is not intended as a solicitation if your property is currently listed with another agent. The articles may contain information obtained from third parties. ORHP does not endorse the
recommendations of any third party nor guarantee the information provided is complete or correct. Copyright 2013
Do You Qualify for a Short Sale on Your Home?
n the short sale process, you sell your home and settle your mortgage debt for less than the amount owed. You may be
eligible to sell your home in a short sale if:
If you qualify and want to move forward with a short sale, it is highly suggested that you consult
with a professional real estate broker/agent who is experienced in short sale transactions. See the
“Basic Steps for a Short Sale” article in this newsletter for a general idea of the process…but keep
in mind that the steps may vary depending on the lender requirements and/or the advice of the real
estate professional who will guide you through the process.
I • You have a hardship, such as a job loss,
divorce, or medical emergency
• You owe more on the mortgage than your
house is worth
• You’re unable to afford your current monthly
mortgage payment
• You’re unable to modify your current home loan
Choose a real estate professional who specializes in short sales to help you with these steps:
Complete these steps for each lender that is involved—every lender has its own process. Some lenders that are in second position
(2nd trust/mortgage) will only start processing their short sale after they’ve received written short sale approval from the first trust. This
means that the overall short sale approval process may take twice as long if there are two trusts/mortgages secured by the property.
Consult with an attorney and/or a licensed tax professional to understand all your obligations relating to a short sale.
1.Complete a property valuation
analysis – lenders will only approve
a short sale if the borrower owes
more than the property’s fair market
value
2.Contact the lender for a short sale
application
3.Collect the financial data and other
information required by the lender –
include a fact-based letter detailing
borrower’s hardship and current
financial situation
4. List the property for sale
5.Receive and ratify a purchase
contract from a qualified buyer
6.Return the purchase contract to
the buyer (and to the lender, all of
the lender-required documentation)
7. Be persistent, but patient – ideally, it
should take 30-45 days for a
purchase contract to work its way
through the lender’s system, but the
process could take longer
RAMANA REDDY
CALHOMES
510 LAWRENCE EXPY STE 213
SUNNYVALE, CA 94085-4016
Tel: (408) 732-2300
Mobile: (408) 242-9838
Fax: (408) 519-8181
http://www.CalHomes.org
BRE Lic. #: 01348354