Making Home Affordable: What Is It?
The recently announced Home Affordable Foreclosure Alternatives program (HAFA) provides instructions for lenders and servicers participating in the Making Home Affordable Program and HAMP. HAFA is designed to streamline the short sale and deed-in-lieu process. Specifically, the program is aimed at presenting an alternative to foreclosure homeowners who were either ineligible or unable to get loan modifications for their existing loans and mortgages, as prescribed by HAMP. Additionally, another of HAFA’s goals is to establish and maintain clear and easily understandable timelines, that are capable of being enforced against servicers. These timelines are intended to urge the servicers of these loans to respond and grant relief to the homeowners in a timely manner.
If you are a homeowner who has declared bankruptcy, you will not be eligible to refinance or modify your home loan using this stimulus plan. If more than a single family lives in the home, that home is not eligible for the stimulus plan from Obama. If your mortgage amount is worth more than your home, by as much as 5%, you will still be able to use this plan and refinance or modify your home loan. This especially helps homeowners who have recently seen their property values drop.
Specifically, HAFA sets a deadline of three business days to submit an executed purchase offer to the servicer with regard to a short sale and the servicer then has ten business days to respond to the offer, thereby speeding up and clarifying the process. This standardization works to the benefit of everyone involved. Although servicers are still allowed to negotiate commissions (not to exceed 6 percent), they are only allowed to do before the property is listed and not after.
You should be mindful of the need to be completely honest and straightforward in the completion of your application for a SunTrust Loan Modification. Not only will dishonesty cause you to forfeit your chance for assistance, it is a serious crime to submit false information on an application for a government program.
To further facilitate this process, each participating servicer is also required to establish and uphold a written policy that describes the basis and terms upon which it will offer the HAFA program to its borrowers. However, it must be noted that all borrowers must be evaluated for a loan modification under HAMP before they can avail themselves of benefits under HAFA. Finally, HAFA goes into effect on April 5, 2010, however the industry rumors are leaning toward the earlier implementation of this program by servicers. Currently, the program is available only for non-Fannie Mae- or Freddie Mac-owned loans up to $729,750 but this may change in the future.
Learn more about Obama Mortgage Relief Plan Qualifications.
