HOME AFFORDABLE FORECLOSURE ALTERNATIVE PROGRAM

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The federal government through the U.S. Treasury Department has created the HOME AFFORDABLE MODIFICATION PROGRAM (HAMP) to modify delinquent loans for homeowners to help them save their homes from foreclosure.  However, not all the eligible loans can be modified. Thereafter, in December 2009, the U.S. Treasury Department created the HOME AFFORDABLE FORECLOSURE ALTERNATIVE PROGRAM (HAFA) to establish short sale and deed-in-lieu of foreclosure (DIL) policies.  The (HAFA) program was created for those borrowers who, 1) do not qualify for the (HAMP) program, 2) are unable to complete a (HAMP) modification or 3) do not accept a (HAMP) loan modification and choose to short sale the home. A deed-in-lieu (DIL) can also be considered for resolve.

WHO QUALIFIES FOR HOME AFFORDABLE FORECLOSURE ALTERNATIVE PROGRAM?

A loan meets the basic eligibility criteria for (HAMP) and (HAFA) if all the following conditions are met:

• The property is the borrower’s PRIMARY RESIDENCE.
• The mortgage loan is a first lien mortgage originated on or before January 1, 2009.
• The mortgage is delinquent OR default is reasonably foreseeable.
• The current unpaid principal balance is equal to or less than $729,750.
• The borrowers TOTAL monthly mortgage payment EXCEEDS thirty-one percent (31%) of the borrower’ GROSS income.

WHICH LENDERS/SERVICERS ARE PARTICIPATING IN THE (HAMP) (HAFA) PROGRAM?

One Hundred servicers are currently participating in the (HAMP) (HAFA) Program ~ these One Hundred “servicers” represent 90% of US Residential lenders.

Lenders and servicers participating in (HAMP) are required to follow the new rules in the HAFA program.  The deadline for lenders to comply with HAFA was April 5, 2010.  The HAFA program expires December 31, 2012.

A list of servicers participating in the (HAMP) (HAFA) program is available at:

http://makinghomeaffordable.gov/contact_servicer.html

HOW CAN THE HOME AFFORDABLE MORTGAGE PROGRAM (HAMP) BENEFIT DISTRESSED BORROWERS?

• HAMP can ENABLE borrower to retain home ownership and occupancy.

• HAMP can REDUCE mortgage payments to an affordable level.

WHAT ARE MY RESPONSIBILITIES IN APPLYING FOR THE  (HAMP) PROGRAM?

·         Contact lender/servicer at the first sign of financial distress, change in financial situation.

·         Provide All Financial Information Requested (which can include: taxes, financial summary, pay stubs, bank statements, etc)

Please Note ~ While 3.4 Million Borrowers MAY be (HAMP) eligible ~ not all will be approved, and if a loan modification plan can not be provided ~ servicer will most likely recommend a (HAFA) or (DIL).

HOW CAN THE HOME AFFORDABLE FORECLOSURE ALTERNATIVE PROGRAM (HAFA) BENEFIT ME?

·         Allows the borrower(s) to receive pre-approved short sale terms prior to the property being listed.

·         Allows the borrower(s) be fully released from future liability for the debt (no deficiency liability).

·         Provides financial incentives to borrower for possible relocation payment at transaction closing (up to $3,000).

·         Less Affect On Credit Report ~ than foreclosure.

WHAT ARE MY RESPONSIBILITIES DURING THE

(HAFA) PROGRAM?

·         Borrower is expected to maintain mortgage payments (usually 31% of gross monthly income)

·         Borrower to provide all information requested and sign documents required to verify program eligibility.

·         Co-operate with listing broker to actively market the property and respond to servicer inquiries

·         Maintain interior and exterior of the property in a manner that facilitates marketability.

·         Work to clear any liens or impediments to title that would prevent conveyance.