Homeowners in your situation should learn about the New Home Affordable Foreclosure Alternatives Program (HAFA):
What's the purpose of HAFA? To help homeowners who are unable to keep their homes under the Home Affordable Modification Program, the HAFA program may make a short sale or a deed-in-lieu of foreclosure a viable option to help them avoid foreclosure. The HAFA Program, which will take effect on April 5, 2010, provides servicer, seller and junior lien holder incentives for these transactions and is designed to simplify and streamline use of short sales and deeds-in-lieu of foreclosure
Who is eligible for HAFA? The borrower must meet the basic eligibility criteria for HAMP:
â€¢ Principal residence.
â€¢ First lien originated before 2009.
â€¢ Mortgage delinquent or default is reasonably foreseeable.
â€¢ Unpaid principal balance no more than $729,750 (higher limits for 2 to 4 unit dwellings).
â€¢ Borrowerâ€™s total monthly payment exceeds 31% of gross income
Government forces are already moving to limit potential damage to millions now struggling with home loans. A new Obama administration short sale program aims to prevent banks that hold second-lien loans from pursuing collections from homeowners after the short sale. It goes into effect April 5, 2010 and works this way: Sellers will receive notice that their servicer has steered part of the sales proceeds to secondary lien holders â€œin exchange for release and full satisfaction of their liens.â€ This release would apply only to short sales done through the administrationâ€™s Home Affordable Foreclosure Alternatives program.... (continued)
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