Finally! Some Common Sense in This Sea of Foreclosure Paperwork and Confusion!
The Home Affordable Foreclosures Alternatives – Short Sales and Deed-in-Lieu of Foreclosures Federal Guidelines
If you have been watching the news, you know that there has been a lot of talk about federal guidelines for Short Sales and Deed-in-Lieu of Foreclosure, coming from the Treasury Department. The supplemental directive was released on November 30, 2009 and today I was privileged to sit on a webinar from the National Association of Realtors about this new information, which will be effective April 5, 2010.
I’d like to touch on just a few of the highlights of this directive, which are below.
Homes Affordable Modification Program – Loan Modification
- Loan must be from the primary residence and can’t be a Fannie Mae or Freddie Mac Loan
- Unpaid principal balance no more than $729,750
- Borrower’s monthly payments exceed 31% of gross income in order to qualify for HAMP
Homes Affordable Foreclosures Alternatives Program – Short Sale and Deed-in-Lieu
- Upon closing of a Short Sale acceptable to the servicer, the borrower will be released from all liability for repayment of the first mortgage debt.
- Upon successful closing of a Short Sale, acceptable to the servicer, the borrower will be entitled to a relocation incentive of $1,500.
- A Short Sale Agreement is completed between the borrower and the servicer, that as long as the borrower performs in accordance with the terms of the SSA, the servicer will not complete the foreclosure sale.
- Provides financial incentives to servicers and borrowers who utilize a short sale to avoid foreclosure on an eligible loan under HAMP.
Please feel free to contact me if you would like more in-depth information, a copy of the guidelines or would like to discuss doing a Short Sale in Kauai. I have been fortunate to do many Short Sales here on Kauai, and I am very excited about the new guidelines as they will certainly make the transaction easier for some folks who really do need help.
Susanna Kunkel
December 12, 2009
Miriam,
Great information! Thank you for sharing it with us.
Susanna
Susanna Kunkel
December 12, 2009
Miriam,
Great information! Thank you for sharing it with us.
Susanna
wpr4u
December 13, 2009
So let me get this straight – a borrower who probably hasn’t made a mortgage payment in months will get $1,500 of my tax dollars as an incentive under this short sale plan. Not to mention the “financial incentives to servicers” that are many thousands of dollars that you conveniently make a passing reference to. I understand the desire for the govt to keep another foreclosure from hitting the market but how can the govt provide this assistance on one hand and still allow borrowers to go out and get zero down loans (FHA/VA – I see them all the time). Unbelievable.
wpr4u
December 13, 2009
So let me get this straight – a borrower who probably hasn’t made a mortgage payment in months will get $1,500 of my tax dollars as an incentive under this short sale plan. Not to mention the “financial incentives to servicers” that are many thousands of dollars that you conveniently make a passing reference to. I understand the desire for the govt to keep another foreclosure from hitting the market but how can the govt provide this assistance on one hand and still allow borrowers to go out and get zero down loans (FHA/VA – I see them all the time). Unbelievable.
Christian Halladay
December 13, 2009
What’s unbelievable is the amount of time and money it takes for the banks to foreclose or short sale a property! The owners are going to loose the house regardless and if the bank can get it done faster and more efficiently via short sale then it’s a win win for everyone especially with these new guidelines. The $1500 is “get out now” money so there are no hold-over tenant situations.
Christian Halladay
December 13, 2009
What’s unbelievable is the amount of time and money it takes for the banks to foreclose or short sale a property! The owners are going to loose the house regardless and if the bank can get it done faster and more efficiently via short sale then it’s a win win for everyone especially with these new guidelines. The $1500 is “get out now” money so there are no hold-over tenant situations.
Miriam Perlmutter
December 14, 2009
Christian makes some good points. But keep in mind these sellers have to sign a Short Sale Agreement with the first lien holder, which includes a through review to determine what amount the Seller will have to pay to the bank while the property is being sold as a short sale. So while the seller is getting some relief finacially, it is not a free ride. Additionally, they have to keep the property in good condition. The bottom line is these properties have to be delt with so that the economy can move forward. The federal government is making all of parties communicate quickly to garner the most value possible for the properties, which everyone benefits from this. Especially if you own properties in the same neighborhood where the short sales are occuring.
Miriam Perlmutter
December 14, 2009
Christian makes some good points. But keep in mind these sellers have to sign a Short Sale Agreement with the first lien holder, which includes a through review to determine what amount the Seller will have to pay to the bank while the property is being sold as a short sale. So while the seller is getting some relief finacially, it is not a free ride. Additionally, they have to keep the property in good condition. The bottom line is these properties have to be delt with so that the economy can move forward. The federal government is making all of parties communicate quickly to garner the most value possible for the properties, which everyone benefits from this. Especially if you own properties in the same neighborhood where the short sales are occuring.
A Look At Waikoloa Home Values « Hawaii Real Estate Market
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[…] multiple offers because they can be difficult to close. If you’re not familiar with the short sale process, read through our blog as many Hawaii Life agents have shown success with these types of […]
A Look At Waikoloa Home Values « Hawaii Real Estate Market
January 27, 2010
[…] multiple offers because they can be difficult to close. If you’re not familiar with the short sale process, read through our blog as many Hawaii Life agents have shown success with these types of […]