IN A NUTSHELL: NEW FORECLOSURE HELP May 24, 2010

On April 5, the U.S. Treasury put into effect HAFA, acronym for Home Affordable Foreclosure Alternatives program (a committee probably stayed up all night to put together that pithy alliterative title–but somehow I just keep thinking of a female cow). Here is a quick summary of the important points, as reported in the Grand Rapids Press on March 28, 2010.

     To be eligible, the home–the principal residence–must have been bought before Jan 1, 2009; mortgage must already be in default, already delinquent, or likely to be–”likely to be”–well that certainly generously covers a multitude of evils.

     And then this is how it works: 1. After the borrower applies, the lender has 30 days to determine eligibility, property value, minimum proceeds from the sale, and to review the title (30 days–well that ought to get someone in the saddle pretty fast).  2. the borrower and lender have to agree on what is the minimum acceptable money before the property is listed. 3. There must be agreement on the realtor’s commission which can be up to 6%. 4. All remaining debt is forgiven by the lender when the property is sold; no little exceptions. 5. The lending institution cannot charge a fee, but they can get $1000 from the federal government (I wonder if the feds have to pony up within 30 days).  6. If there is a second lien on the property, the lending institution can get another $1000 from the government for letting that second lien holder have up to 3% or a maximum of $3000 from the sale.

     So, that’s it. Need some more help or have questions go to  makinghomesaffordable.gov/borrower-faqs.html  or homerepairservices.org 

      Well, that’s it in a nutshell