Making Home Affordable Updates - Foreclosure Alternatives And Home

By Author: RefinanceItt
Total Articles: 11
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About 750,000 homes are under trial modification of HAMP. But only a small percentage of this could receive permanent change. Short Sells and Deed in Lieu options of countering foreclosure were available but the cumbersome paperwork and long period of wait for approval was detrimental to its success. A program that will complement and increase the scope of the current HAMP called the home affordable foreclosure alternatives program (HAFA) is launched. Powered with cash incentives for all and driven by the same objective of helping homeowners avoid foreclosure it offers streamlined and simplified procedure for Short Sell and Deed In Lieu as viable options. The program gives alternatives and basic tone does not change which means one has to meet the eligibility requirements. This article aims to give HAFA overview to readers looking for help in avoiding foreclosure using this alternative program.

The Program:

The home affordable foreclosure alternatives program (HAFA) is valid from 05 April 2010 through to December 2012. The alternatives are available to those who:

a) Failed to qualify for HAMP trial.

b) ...
... Missed two consecutive payments.

c) Failed on the modified terms and.,

d) Requested for the alternative of Short Sell or Deed In Lieu.

This also means that one has to meet the basic criteria set in the modification program to become eligible for this option. Cash incentives are offered to servicers, investors and borrowers who participate. The program allows stressed homeowners to short sell the house or if that is not possible use Deed in Lieu option. The hardship and income information submitted for HAMP are not required to be re-submitted and it gives a pre-approved short sales to the borrower. The property then gets listed for sale. Freddie Mac is appointed as the compliance agency and this program will work in support of the home affordable modification program (HAMP). The proceeds are used to cover the debts as much as it can and the rest is let off. This means it would need prior approval of the lender and hence incentives are offered to lenders to join the program. The first mortgage is completely released.

Benefits:

There are quite a few benefits for all the parties involved in this program as in terms of cash incentives to the servicer, investor and the borrower after one month of successful run. It offers $1,500 cash to the homeowner as "relocation allowance", $ 1,000 to the primary owner and $1,000 to the second mortgage. Foreclosure proceeding is done away with for modification, died in lieu (DIL) method and this is a big cost savings to the tune of almost about thousands of dollars. The ownership is transferred and the house will have a new owner and houses don't remain vacant for long. One of the biggest advantages is the mellowed damage to the credit rating vis-a-vis foreclosure.

Who Are Eligible?:

The basic criteria as in home affordable modification program (HAMP) remains the same while it takes care of the individuals who did not qualify due to low income or those could not complete the trial. Even those who did not get the permanent change are eligible. If one has missed payments twice in succession they can also get approved. Unlike other short sales or deeds-in-lieu the loan servicer must agree to take the amount as full in lieu of the debts. This would disallow them to get anything more. The HAFA application has to be submitted within 30 days of not getting HAMP or if they especially asked for the alternative program. A homeowner has to respond to the HAFA notice within 14 days. The total cycle is about 30 days for getting the approval or response from the lender.

How it Works?:

The processes under home affordable modification program (HAMP) are structured, documentation standardized and time limits set for each activity. Once a person agrees to short sell an independent appraiser sets the value of the property. . Once the sale goes through the proceeds which is less than what is owed is given to the servicer. The lender has approved the sale and the owner cannot decide the minimum value. Other option, if the property title is free and clear is the deed in lieu wherein the debtor hands over the property to the loan servicer in lieu of the mortgage. The time schedule is stipulated for finding a buyer and the number of days the new owner has to stay in the house. It also offers commission to the real estate agent. The borrower is not required to give any cash or promissory note and forfeits his rights to get the money.

Lenders / Servicers:

They receive incentives for participating in the new HAFA program and have to comply with the requirements. List of participating lenders is available on the net. If there are second mortgages they get limited part of the proceeds and the first lender has to approve. The participation is voluntary.

Resource Box:

The home affordable foreclosure alternatives program(HAFA) is a better defined and lined program to provide help to individuals facing foreclosure by working on short sales and DIL as feasible alternatives. Visit www.Refinanceitt.com to know about HAFA Programs.