There is a lot of confusion between HAMP and HAFA

There is a lot of confusion between HAMP and HAFA. HAMP is the Home Affordable Modification Plan and HAMP is the Home Affordable Foreclosure Alternative program. Under one program (HAMP) you are trying to get a loan modification on your loan/s. Under the other program (HAFA) you are trying to find an alternative to a foreclosure by selling your home using the short sale process or giving your property back to the bank using a Deed in Lieu of foreclosure.

If you qualify under HAFA to sell your home and your lender is identified as subscribing to the HAFA program, you, as the borrower will be fully released from all liability for repayment of the loan.

Because, in any case, there could be significant tax and credit issues, it is always best to check with your attorney and tax adviser as to your personal situation.