The Home Affordable Alternatives Program (HAFA) has released new guidelines that went into effect on Monday, April 5, 2010. These new rules are designed to streamline the process and allow more delinquent homeowners to sell their homes and get on with their lives. The program is voluntary, but offers incentives for borrowers and lenders to work together to prevent foreclosure. Here is a summary of some of the points that will have the greatest impact.
- A homeowner will be able to get a short sale approval in advance. This is huge! In the past, the banks wouldn’t even look at a Short Sale unless there was an offer for the property. The homeowner, real estate agent and the buyer were flying blind. The new guideline allows the owner to receive a pre-approval from the bank that includes the minimum net amount it will accept.
- Provides new incentives for the borrower to complete the process. They are now given $3000 for relocation expenses. This will make the transition much easier for the homeowner.
- Mortgage servicers will also receive $1500 for each completed short sale to cover administrative and processing costs.
- Under certain circumstances the homeowner may be able to be released of all liability for the loan.
What are the Qualifications?
The homeowner must be eligible under the Home Affordable Modification Program (HAMP) but delinquent and unable to pay for their mortgage. The loan must be less than $729,750, made before January 1st of 2009, and the home must be the owner’s primary residence. The homeowners’ mortgage payment is more than 31 percent of their before-tax income. Finally, their lender must be participating in the voluntary HAMP program in order for the servicer to benefit from the HAFA provisions.
The Freeman/Davis Raleigh Homes and Real Estate Team has complete details for you. Visit us online at www.HomeSearchRALEIGH.com and feel free to contact us. Ask about The Allen Tate Short Sale Assistance Program!