New Foreclosure Prevention Program Launched on Monday

April 8, 2010 - Washington - The federal government launched its newest foreclosure prevention program on Monday, the Home Affordable Foreclosure Alternatives (HAFA) program. This initiative, which was originally announced back in 2009, is separate from the government's loan modification program, which has a similar name -- the Home Affordable Modification Program (HAMP).

Unlike HAMP, the Home Affordable Foreclosure Alternatives program focuses on getting homeowners out from under excessive mortgages rather than modifying those mortgages to make them more affordable. Under the HAFA program, homeowners at risk of foreclosure are encouraged to sell their home through a short sale or deed-in-lieu of foreclosure.

A short sale is when you take a loss on your home, essentially selling it for less than what you owe on your mortgage. In a deed-in-lieu of foreclosure, the homeowner transfers the deed to the lending institution, which can then sell the home to recoup its costs.

If an at-risk homeowner participates in the HAFA program, they may be eligible to receive $3,000 in relocation assistance, according to Realtor.org. Lenders who approve short sales or deed-in-lieu's can receive $1,500 per homeowner for their participation. The HAFA program will be active until the end of 2012.