The Department of the Treasury recently amended its Home Affordable Foreclosure Alternatives (“HAFA”) program to assist servicemembers who receive “change of station” orders, even if their income has not declined. Accordingly, if a member of the military receives permanent relocation orders, he or she can obtain assistance under the HAFA program if the person’s home is underwater, even though he or she is current on his or her mortgage and there has been no decline in income.

Under the HAFA program, borrowers must document a financial hardship wherein they do not have sufficient liquid assets to make monthly mortgage payments. Effective immediately, Supplemental Directive 11-10 now clarifies that a servicemember’s permanent change of station order may be cited as a basis for the financial hardship even when the servicemember’s income has not decreased. The servicemember must still meet the requirement that he or she does not have sufficient liquid assets to make his or her monthly payment obligations.

Holly Petraeus, the CFPB’s assistant director of the Office of Servicemember Affairs, who has been an ardent supporter of militarymembers and whose office has been analyzing various financial issues facing our country’s servicemembers, applauded Treasury’s modification, which should help members of the military avoid possible foreclosure. Ms. Petraeus, citing the financial issues and difficult choices facing servicemembers who are relocated, supported Treasury’s move and is “encourage[ing] all policymakers and the financial industry to work together to create common-sense solutions for our servicemembers in this situation.”