Treasury moves to help more military qualify for HAFA
The Treasury Department clarified guidelines for the Home Affordable Foreclosure Alternatives program Thursday. The move is an effort help more military service members qualify for short sales and deeds-in-lieu of foreclosure. Enough military families raised an issue with a caveat in the program: a permanent change of station was not being considered a financial hardship. A Treasury spokesperson said enough phone calls through the Homeowner's HOPE Hotline persuaded officials to make the clarification. "An example of such hardship includes a service member citing a 'Permanent Change of Station' order as the basis for his or her financial hardship when requesting HAFA even if such service member’s income has not been decreased, so long as the service member does not have sufficient liquid assets to make his or her monthly mortgage payments," the Treasury said in a directive sent to mortgage servicers Thursday. HAFA launched in April 2010 as another way for homeowners to avoid foreclosure if they fell out of a Home Affordable Modification Program trial or permanent workout. But the program has underwhelmed. Through July, servicers completed 12,888 short sales and DILs, up from 10,438 the previous month. Holly Petraeus, assistant director of the office service member affairs at the Consumer Financial Protection Bureau said too many military families are struggling with negative equity but remained current on their home up until they receive orders to move. "Service members in this situation face an array of tough choices that can include years-long separation from family, foreclosure, and even financial ruin," Petraeus said. "I applaud the Department of Treasury for updating its program guidance to recognize that military orders to move can trigger a genuine hardship for military homeowners." Write to Jon Prior. Follow him on Twitter @JonAPrior.