Status of the Making Home Affordable Program's Fourth Incentive
HAFA Causing Headaches The federal government's fourth incentive program under the Making Home Affordable program is currently causing more headaches than solutions to our nation's housing crisis.
The "Home Affordable Foreclosure Alternatives" incentive program, or HAFA as it has been dubbed, offers cash incentives of up to $3,000 to borrowers that are in imminent danger of foreclosure. For borrowers to be eligible for the cash incentive, they need to complete a short sale of the home or a deed in lieu of foreclosure.
While many borrowers already know that a short sale is a sale of the home for a lower amount than what would cover the money owed on the mortgage; a deed in lieu of foreclosure is rare and is done by the homeowner signing over the deed to their primary lender, The homeowner then walks away from the home by mutual agreement between the borrower and lender rather than defaulting on the loan.
A deed in lieu of foreclosure is a rare occurrence when compared to the amount of short sales taking place across the nation. Short sales are not ideal; however, a short sale is better for the housing market than a foreclosure, if for no other reason than short sales will not leave the home vacant for an extended period of time like a foreclosure tends to do.
The HAFA program is intended to give borrowers a reason to complete a short sale rather than go through with a stratic default letting it fall into foreclosure. HAFA also offers incentives to loan servicers of amounts up to $6,000 per transaction for every short sale or deed in lieu that takes place.
So far, this program has complicated the short sale process more than it has helped. There are twice as many forms to fill out, completing short sales takes twice as long and only around 20% of the applicants qualify for the cash incentives.
HAFA is the fourth incentive program to fall under the Obama administrations Making Home Affordable program. There have been tweaks to the other incentive programs to try to get them to work as intended. There will most likely be modifications to HAFA that will alleviate some of the current problems facing the program. For more information on HAFA or the other incentive programs that fall under the Making Home Affordable program.
The "Home Affordable Foreclosure Alternatives" incentive program, or HAFA as it has been dubbed, offers cash incentives of up to $3,000 to borrowers that are in imminent danger of foreclosure. For borrowers to be eligible for the cash incentive, they need to complete a short sale of the home or a deed in lieu of foreclosure.
While many borrowers already know that a short sale is a sale of the home for a lower amount than what would cover the money owed on the mortgage; a deed in lieu of foreclosure is rare and is done by the homeowner signing over the deed to their primary lender, The homeowner then walks away from the home by mutual agreement between the borrower and lender rather than defaulting on the loan.
A deed in lieu of foreclosure is a rare occurrence when compared to the amount of short sales taking place across the nation. Short sales are not ideal; however, a short sale is better for the housing market than a foreclosure, if for no other reason than short sales will not leave the home vacant for an extended period of time like a foreclosure tends to do.
The HAFA program is intended to give borrowers a reason to complete a short sale rather than go through with a stratic default letting it fall into foreclosure. HAFA also offers incentives to loan servicers of amounts up to $6,000 per transaction for every short sale or deed in lieu that takes place.
So far, this program has complicated the short sale process more than it has helped. There are twice as many forms to fill out, completing short sales takes twice as long and only around 20% of the applicants qualify for the cash incentives.
HAFA is the fourth incentive program to fall under the Obama administrations Making Home Affordable program. There have been tweaks to the other incentive programs to try to get them to work as intended. There will most likely be modifications to HAFA that will alleviate some of the current problems facing the program. For more information on HAFA or the other incentive programs that fall under the Making Home Affordable program.
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