Friday, January 17, 2014

Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970

I have a genuine knack for allowing myself to be sucked into the most obscure and generally useless backwaters of the legal word, by accident. But since it was so damn difficult for me to even begin to get a grip on the issue, I have to share what I found.

The Home Affordable Foreclosure Alternatives (HAFA) is a U.S. Treasury program which arose from the recent (2007 - 2009) global economic and real estate bad dream. Part of the program provides Federal subsidies to mortgage lenders to encourage short sales for borrowers in financial distress. As part of the HAFA program, residents of the properties which are subject of the short sales (whether owner occupant or rental tenants) are required to vacate the premises when the short sale closes.

Since there are Federal subsidies involved, the mortgage lenders must be in compliance with the requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 USC § 4601, et seq.), in general, and specifically, the provisions for resident relocation assistance, found at 42 USC § 4621, et seq.

If you are looking to understand relocation assistance under HAFA, these Code sections and any relevant Treasury Department regulations are the place to look.

I hope that helps.


  1. Most people feel that if they are unable to pay then they should vacate. However, in these instances they should remain in the property until told to go, and strangely they often give you money to move at that time. If you move before they tell you, I have been told that they could hold you in contempt or something like that, and in affect it cost you even more money that you don't have.

    The whole short sale system is flawed at best. It takes longer, and many times they veto a good offer and turn away good buyers, and then later accept a horrible low offer. The whole thing makes little sense, and it seems to be that most in these situations are at the mercy of whomever is dealing with their paperwork that day, and many of these sub-humans likely are not home owners and certainly little compassion offered to most who find themselves in those circumstances. Also, sadly, poorly qualified, and even poorer trained people can do a world of damage to real people fighting real battles.

    Nice to vent, I was a Realtor Broker for nearly 30 years and saw many situations. I'm very happy to be retired from that profession.

    1. There seem to be a few gaps in the process that I don't understand. A recurring statement I've seen reproduced online is, "the resident must vacate upon closing," as a condition of the short sale. Clearly, an owner-occupant can agree to vacate in the sales contract, but a tenant is not party to the sales contract. The possibility of a sale might be part of the tenant's written lease, and stipulate the termination of the rental agreement. But otherwise, I don't understand how the tenant can be required to vacate, at least in Kentucky. Here a valid tenant lease survives a voluntary sale and obligates the new owner as a replacement landlord. I have to agree that it is a puzzle for me.
      On your other point, I suspect it is entirely possible the mortgage lenders may reap a greater profit from the Federal subsidy then they do from the sale. I'm sure they know how to game the system to their advantage.
      I appreciate your comment. Thank you.