HAFA (Home Affordable Foreclosure Alternatives) is due to launch on April 5.We’ve talked about this before and have seen it coming for some time. While it will be interesting to see how things play out, the most exciting part from our point of view is this:

for short sales and deeds in lieu under HAFA, lenders will have to give up the right to go after borrowers if there’s a deficiency on the mortgages.

Borrowers won’t be on the hook if the home is sold for less than the value of the first mortgage. If the holder of the second mortgage gets an incentive payment from HAFA, the borrower is also not responsible for any shortfall on that loan too, according to the National Association of Realtors.

Plenty has been done for the banks; it’s refreshing to see legislation that stands a good chance of actually making a difference for underwater homeowners.