The U.S. Dept. of the Treasury last week announced the Home Affordable Foreclosure Alternatives Program (HAFA), which provides financial incentives to servicers/lenders, borrowers, and investors for a closed short sale or a deed-in-lieu (DIL).

Program goes into effect on April 5, 2010, but participating servicers/lenders may elect to implement HAFA prior to April 5, 2010.

There are some pitfalls to this new program:

Borrowers :

1. Did not qualify for a HAMP Trial Period program.

2. Did not successfully complete a HAMP Trial Period program

3. Are  delinquent on a HAMP modification by missing at least two consecutive payments, or Requests a short sale or Deed in lieu of foreclosure

4. This is a voluntary program for Lenders

WHAT IS HAMP? Home Affordable Modification Program

A borrower who is current, but has a documented need to have a reduced

mortgage payment can qualify for the program by entering into a trial

modification for the reduced payment amount. With the reduced payment

amount, the loan will be in default.

Options lender can do utlizing this program

1. Reduce interest rate as low as 2% - 5 year period

2. Extend termt to 40 years

3. Reduce payment to less than 31% of montly income

4. Temporarily suspend principal payments

5. Has to be primary residence

6. Applies only to FHA insured mortgages.

7. This program is only for a 3 month TRIAL PERIOD

8. This is a voluntary program for Lenders

WHAT IS DIL ( DEED-IN-LIEU)

A Deed-in-Lieu allows homeowner to transfer your property voluntarily to their lender and their debt or deficiency is often forgiven.  The borrower is immediately released from most or all of the personal indebtedness associated with the loan.  The borrower avoids the notoriety of a public foreclosure and may receive better terms than a formal foreclosure.   AKA "Friendly Foreclosure."  Caveat Emptor: if Junior Liens are not resolved properly under DIL procedure, there will be a "cloud on title".

At County Properties 23 years of brokerage experience and trust! We offer free counseling in real estate re; home values and information on options of selling vs Foreclosure.  If you have equity in your home, we will sell your home and get top dollar in this challenging market. If you do not have enough equity, and you must sell your property as a short sale we have the expertise to do so also. Please feel free to contact me today for free counseling at (619) 301-0200. If you prefer, contact us by filling out the form stop foreclosure now.  

By the way…if you know of someone who would appreciate the level of service I provide, please call me with their name and business number and I’ll be happy to follow up and take great care of them.