Kristine Dugan, ABR, BS, CRS, SFR
Your Resource for All Things Real Estate
Direct Phone: 702-332-7781 :: Email: info@HomeSearchVegasValley.com
New Changes to HAFA Program to Help Upside Down Homeowners
Posted on March 16, 2011
As of February 1st, 2011 there have been some updated changes to the HAFA (Home Affordable Foreclosure Alternatives) Program which I believe will help more short sales be process by lenders. The main benefits of utilizing this government program is that as long as you qualify, the homeowner is no longer responsible for the difference between what is owed on the mortgage and the amount that the property sells for (also known as the deficiency) and the homeowner is eligible to receive $3,000 in relocation assistance upon successful closing of the property. The major change in the updated HAFA Program is that now the homeowner's lender is being held accountable by the Mortgage Insurance Companies to see if the lender really tried all alternatives to work with the homeowner before foreclosing. So pretty much if the lender cannot justify or document that they tried to work with the homeowner to exercise all options, if the property forecloses, the Mortgage Insurance Company may not pay the claim (or the balance) of the mortgage on the foreclosed property. From my perspective THIS ROCKS! And it has caught the attention of the lenders to become motivated to adjust the streamline process of short sales.
Another change that is great is that the homeowner's lender is not required to verify the income of the homeowner any longer - only the hardship of the homeowner. Previously for a homeowner to qualify for HAFA, their monthly mortgage payment would have to exceed 31% of their monthly income (please note that the number 31% was pulled out of thin air by the policy makers).
Other changes include that the homeowner would have to have lived in the property as their primary residence within the past 12 months. The original HAFA guidelines stated that the homeowner would have needed to currently be occupying the property to qualify for the program. So in the situation that a homeowner recently moved out of their property to relocate or had to rent the property, as long as the property was their primary residence within the past 12 months, they would still qualify for HAFA.
The last major modification includes that if the property does not sell and the homeowner is eligible for HAFA, the homeowner agrees upfront to a deed-in-lieu which is just a fancy way of saying the homeowner is giving the property back to the lender. The homeowner may be able to rent the property from the lender and the homeowner may have an opportunity to repurchase the property at some future time back from the lender (at discretion of the bank and as long as other program requirements are met).
Below are some other eligibility requirements:
Another change that is great is that the homeowner's lender is not required to verify the income of the homeowner any longer - only the hardship of the homeowner. Previously for a homeowner to qualify for HAFA, their monthly mortgage payment would have to exceed 31% of their monthly income (please note that the number 31% was pulled out of thin air by the policy makers).
Other changes include that the homeowner would have to have lived in the property as their primary residence within the past 12 months. The original HAFA guidelines stated that the homeowner would have needed to currently be occupying the property to qualify for the program. So in the situation that a homeowner recently moved out of their property to relocate or had to rent the property, as long as the property was their primary residence within the past 12 months, they would still qualify for HAFA.
The last major modification includes that if the property does not sell and the homeowner is eligible for HAFA, the homeowner agrees upfront to a deed-in-lieu which is just a fancy way of saying the homeowner is giving the property back to the lender. The homeowner may be able to rent the property from the lender and the homeowner may have an opportunity to repurchase the property at some future time back from the lender (at discretion of the bank and as long as other program requirements are met).
Below are some other eligibility requirements:
- You live in the home or have lived there in the last 12 months.
- You have a documented financial hardship.
- You have not purchased a new house within the last 12 months.
- Your first mortgage is less than $729,750.
- You obtained your mortgage on or before January 1, 2009.
- You must not have been convicted within the last 10 years of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction.
*Eligibility criteria are for guidance only. Contact your mortgage servicer to see if you qualify for HAFA.
To read more about HAFA, visit the government website Making Homes Affordable. To read the complete HAFA Policy Update that took effect on February 1, 2011 click here.
For me, these changes are definitely a step in the right direction for policy makers and the banks to truly help those homeowners that have a hardship and need to sell their property. If you or someone you know are behind on mortgage payments and need help, feel free to contact me at 702-332-7781 for a confidential, complementary consultation.
For me, these changes are definitely a step in the right direction for policy makers and the banks to truly help those homeowners that have a hardship and need to sell their property. If you or someone you know are behind on mortgage payments and need help, feel free to contact me at 702-332-7781 for a confidential, complementary consultation.
Return to Website Home
Contributors
Recent Comments
Most Viewed Entries
Search
Subscribe to this Blog
