Money seems to be able to speak louder than most words. Money is speaking right now with Homes Afforable Foreclosure Alternative (HAFA) and with help to revamp it. One of the main features of HAFA's new policy centers around second mortgages.
At the launch of HAFA, February 2009, the cap rate that services / lenders were receiving as payoffs when there was a (HELOC)- Home Equity line of credit or second mortgage on a personal residence was 3% or an aggregate total of $3,000.00. By March 2010 this $3,000.00 for a junior lien holder amount changed to an increase of 6% with the overall limit at $6,000.00, twice the amount from initial inception.
The new change effective February 1, 2011, although services can now implement this change now, still leaves the $6,000.00 in place , but the 6% cap is being erased allowing the servicers/lenders more leadway when a borrower/homeowner owes less than $100,000.00 on their second mortgage. This second mortgage is a major road block in completing a short sale transaction.
Homes Afforable Homes Alternative (HAFA ) comes into play, after a distressed homeowner has tried to receive a loan modification (HAMP) under the Homes Affordable Modification Program. The borrower has not been able to qualify fo HAMP and is now working to receive HAFA proceeds. The Obama Administration would like to see homeowner's avoid a foreclosure. The Administration is working with HAMP and HAFA to acomplish this.
Susan Penn,PA, SFR can be reached at 954-557-5993 or firstname.lastname@example.org