H A F A- Home Affordable Foreclosure Alternative Program
Which loans are eligible?
1. Not owned or guaranteed by Fannie Mae or Freddie Mac.
2. Borrower’s principal residence.
3. Loan is first lien mortgage originating on or before January 1, 2009.
4. The mortgage is delinquent or default is inevitable.
5. The unpaid balance is less than $729,750.00.
6. The total monthly mortgage payment must exceed 31% of the borrower’s gross income.
Fannie Mae & Freddie Mac loans are developing their own, similar guidelines.
This is a voluntary program for banks. However, many major banks like Bank of America, Chase, Wells Fargo and Citibank are expected to participate. Many smaller lenders are also expected to follow. Seventy eight mortgage servicers opted into the government’s Home Affordable Modification Program which cover approximately 85% of eligible mortgage debt. Banks and mortgage servicers want to clear up the many potential short sales.
How is this better?
1. Servicers will get $1,000. to cover costs, subordinate lien holders get up to $3,000. for forgiving the loan in its entirety.
2. The borrower will receive $1,500. for moving costs.
3. There will be standardized forms, procedures and timelines. There will also be pre approved terms before the property is listed for sale. This means that the banks will pre determine a sale price for payment in full of the debt.
4. These new guidelines will allow serious buyers to consider short sales with less effort. They will not have to worry whether the lender will accept their offer. Buyers will not have to worry about liability for future debt. This has been a problem in some states.
In short, this program gives owners that are under water pre-approved solicitation for a short sale. While the property is being marketed, proactive processing can be done for a quicker closing. Although it will take some time for lenders to modify these guideline procedures, it is a step in the right direction.
Source – Realtor.org
Millie Thomas, Broker
Landmark Realty of L.I., Inc.
6347 Route 25A
Wading
631-929-3600
No comments:
Post a Comment