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New alternatives to foreclosure unveiled

By Marcie Geffner - Bankrate.com

Homeowners who can't afford their mortgage payments may want to take a look at the federal government's new alternative to foreclosure: the Home Affordable Foreclosure Alternative program, or HAFA, which intended to encourage lenders to facilitate short sales and deeds-in-lieu, or DIL, as alternatives to foreclosure.

The program, which is a part of the Home Affordable Modification Program, or HAMP, may help some homeowners escape a bad situation, but the rules are complicated and they won't be able to keep their homes.

U.S. Treasury Assistant Secretary Herbert Allison explained the concept in congressional testimony.

"HAMP does not, nor was it ever intended to, address every delinquent loan," he said. "In these instances, the borrower may benefit from an alternative that helps the borrower transition to more affordable housing and avoid the substantial costs of foreclosure."

Read on: http://www.bankrate.com/finance/mortgages/new-alternative-to-foreclosures-unveiled-1.aspx

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