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Can I Sell My Home Under Federal Loan Modification Programs



You may have looked at your mortgage and financial situation and come to the conclusion that it is not a good idea for you to stay in your home. However, you may still want to sell your home and get back some of the equity that you put into it rather than have the bank foreclose on you. There are federal loan modification programs, chief among which is known as the Home Affordable Foreclosure Alternatives (HAFA) Program, that will help you sell your home and move on.

Generally speaking, traditional loan modification programs make it difficult for you to sell your home. This is because the loan modification process typically takes 3-6 months, which may be followed by a 3-6 month trial process in which you will need to make your payments. If your situation is such that you can't afford to keep making any sort of payment, the bank may want to foreclose to get its money back. This puts you in a tight spot, because the bank has all the cards and no incentive to help you sell the home.

How The HAFA Program Works

HAFA is designed to enable and expedite the sale of your home and relocation once it is finished. There are two options for HAFA applicants:

  • Short Sale - You sell your house for the amount of money that you've currently paid on the principal and interest of your mortgage, effectively getting your money back. The home ownership is then transferred to the new owner, and you are able to walk away.
  • Deed-in-Lieu - You transfer home ownership to the lending institution in exchange for getting your mortgage paid back.

For a federal program, HAFA offers a number of perks and benefits that make it seem favorable to most consumer lending short sale offers. These include free advice from a loan modification lawyer, government oversight and assurance that your unpaid loan will be waived, a less negative credit effect than foreclosure or traditional short sale, and up to $3,000 in relocation assistance.

Before you decide to sell your home through the HAFA federal loan modification program, you should talk to a qualified legal expert. She will help you determine if you should get mortgage forbearance, loan modification or attempt to sell your home through a short sale. She will also help you get all of your documents together for federal forms and visits to the bank. Connect with a loan modification lawyer today!

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