At first blush, the Home Affordable Foreclosure Alternatives (HAFA) Program Supplemental Directive 09-09 appears to be a game-changer in the hotly-contested battle raging between distressed homesellers, their real estate representatives and mortgage servicing entities.
As part of the Home Affordable Modification Program (HAMP), HAFA will provide financial incentives to servicers and borrowers who elect a short sale or deed-in-lieu to avoid foreclosure.
The new directive will become effective April 5, 2010, according to a press release attributed to the HAMP Support Center.
Key elements to the directive include prohibiting the servicer fromr reducing real estate commissions beyond the agreed rate reflected in the original listing agreement as a condition for approving the short sale. It also requires servicers to respond to a submitted offer within 10 days of receipt and, most importantly, for qualifying borrowers with qualifying loans, requires lenders to fully release borrowers from future liability for the debt.
This is huge! The directive also provides for a $1,000.00 servicer incentive and $1500.00 seller moving expense incentive.
See a copy of the directive at HMPadmin.com
It appears, at last, the administration has provided a means to begin to unplug the system. Your thoughts?