Orginally the Obama Administration created HAMP- Home Affordable Modification Plan
In March 2009 the Obama Administration started working on the MHP or the Making Home Affordable plan. The Administration was hoping to help 3 to 4 million homeowners through the HAMP program by helping them modify their loans to be more affordable.
Qualifications for eligibility using the HAMP program were:
1) borrower is delinquent on their mortgage or faces imminent risk of default
2) property is occupied as borrower's primary residence
3) mortgage was originated on or before Jan. 1, 2009 and unpaid principal balance must be no greater than $729,750 for one-unit properties.
If they meet the criteria above then it is possible to adjust the monthly mortgage payment to 31% of a borrower's total pretax monthly income:
*Reduing the interest rate to as low as 2%, *Extending the loan terms up to 40 years. *
Defer a portion of the principal until the loan is paid off and waive interest on the deferred amount.
IN APRIL 2010 HAFA will be implemented:
HAFA-Home Affordable Foreclosure Alternatives Program is under the HAMP Program This complex
program had some great benefits in the future for Short Sales and Deeds in Lieu of:
1. Financial incentivers
*Homeowner will get $1,500 to relocate and find a place to live
*Morgage Servicer will get $1,000 for administrative expenses
*Investors will get $1000
* Subordinates or other Junior Lien Holders may get up to $3000
2 Pre-approved short sale terms from the Lender before the property is listed
3. Prohibit Servicers from requiring real estate agents to cut their commissions
4. Would allow borrowers to be be fully released from liability with no Deficiency Judgements
5. And certainly a big issue would be that it would set up timeframes and deadlines to Lenders
and financial institutes.
HAFA applies to loans not owned or guaranteed by Fannie Mae or Freddie Mac, which will issue their own versions of HAFA very soon. Full disclosures and terms can be found at: http://www.realtor.org/government_affairs/short_sales_hafa
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