There’s been some buzz in the media lately as we near the April 5 effective date of the federal Home Affordable Foreclosure Alternatives Program (or HAFA). The program is intended to help homeowners avoid foreclosure by completing a short sale or a deed-in-lieu of foreclosure and ultimately reduce the number of foreclosures and the collateral damage to an individual’s credit and home values in communities hard hit by this ongoing crisis.

It offers financial incentives for the borrowers and loan servicers to choose these options over foreclosure proceedings and attempts to streamline the short sale process by providing a standard process, timeframes and standard documentation.

If the program works as intended it will help reduce the roadblocks and lag-time in the short sale process, something REALTORS® have been promoting for some time. IAR legal counsel continue to field calls to the IAR Legal Hotline related to short sale issues and have developed Short Sale Q&A and checklists for buyers and sellers to help IAR members with the process. (IAR members can link to

This does come as welcome news as here in Illinois we continue to see unemployment levels higher than the nation (11.3% in January compared to the national unemployment rate of 9.7%). If you don’t have a job it’s hard to pay the mortgage.

The National Association of REALTORS® has simplified the 43-page HAFA program guidelines (U.S. Treasury Department Supplemental Directive 09-09) for its members with a brochure, FAQs and more resources.

About the program IAR legal counsel Steve Bochenek specifies: “If the lender of a first mortgage participates in the program, it is required to forgive the delinquency. Other creditors are not required to forgive the delinquency. HAFA does not apply to loans by Freddie Mac and Fannie Mae; these companies are developing their own programs.”