In April of this year, the government upgraded its Obama make home affordable program and Foreclosure Alternative, or HAFA, Program in an attempt to help homeowners with over-leveraged homes who are facing foreclosure. The program prior to the upgrade did very little to help homeowners in pre-forelcosure. Will the newest version of the program fare any better? Lets take a look at a few of the positives associated with HAFA. $3000 allowed to the homeowner for relocation expenses. May stall the foreclosure sale date long enough to give the homeowner an opportunity to sell the home. If successful, allows the homeowner to avoid the foreclosure from appearing on their credit report. A HAFA short sale may allow you the time needed to market your home and avoid a foreclosure. A foreclosure on your credit file will keep you from qualifying for a new mortgage for a minimum of five years. The relocation allowance is a nice touch, but does it out weigh the negatives listed below.
Negative Aspects of HAFA: Your lender has to agree to a HAFA short sale. There is a small incentive, but is $1500 enough to entice your lender? You have to list your house with a Realtor. You have 120 days to sell the house once listed. You can extend, with approval, to a maximum of 6 months total. Your lender sets the sale price for the home. You have to pay 31% of your monthly income as a mortgage payment during your participation in the HAFA program. If you are late or miss a payment, then you are out of the program. You have to provide clear title to the buyer of your house. By agreeing to participate in the program, you have also agreed to a "deed in lieu of foreclosure", if the short sale is unsuccessful!
The Fed has designed a streamlined loan modification plan called Obama make home affordable program -that features standard guidelines to determine which homeowners qualify for help. All lenders who are participating must abide by the same guidelines. This makes it much easier for homeowners because once you know what those guidelines are, you are able to fine tune your own application so that you have the best chance of approval. The idea of the federal plan is to give homeowners a very low, affordable monthly payment. This is called a target payment and it equals just 31% of the households gross monthly income. In order to reach this target payment, your interest rate may be reduced to as low as 2%, your loan term may be extended to 40 years and some of your principal balance may be forgiven or deferred.
Every lender has implemented guidelines to determine which homeowners are eligible for loan modification help. Once you understand what those guidelines are, you are the best person to work on your application. Why? It's simple-you are the most motivated to save your home. It does not make sense to entrust your families home and financial future to someone you never met or know very little about. When you make the decision to work directly with your bank to find a solution, you are taking control of your success.
If your ready to get serious about saving your home, then you need to make the commitment to learn about how to get loan modification help from your lender. You do not have to try to figure this out all by yourself however, you can use the information in a best selling kit for homeowners to learn the basics. Being prepared and persistent is the key to success. Your home and financial security are worth the time and effort. We agree with President Obama-you can do it yourself!
Negative Aspects of HAFA: Your lender has to agree to a HAFA short sale. There is a small incentive, but is $1500 enough to entice your lender? You have to list your house with a Realtor. You have 120 days to sell the house once listed. You can extend, with approval, to a maximum of 6 months total. Your lender sets the sale price for the home. You have to pay 31% of your monthly income as a mortgage payment during your participation in the HAFA program. If you are late or miss a payment, then you are out of the program. You have to provide clear title to the buyer of your house. By agreeing to participate in the program, you have also agreed to a "deed in lieu of foreclosure", if the short sale is unsuccessful!
The Fed has designed a streamlined loan modification plan called Obama make home affordable program -that features standard guidelines to determine which homeowners qualify for help. All lenders who are participating must abide by the same guidelines. This makes it much easier for homeowners because once you know what those guidelines are, you are able to fine tune your own application so that you have the best chance of approval. The idea of the federal plan is to give homeowners a very low, affordable monthly payment. This is called a target payment and it equals just 31% of the households gross monthly income. In order to reach this target payment, your interest rate may be reduced to as low as 2%, your loan term may be extended to 40 years and some of your principal balance may be forgiven or deferred.
Every lender has implemented guidelines to determine which homeowners are eligible for loan modification help. Once you understand what those guidelines are, you are the best person to work on your application. Why? It's simple-you are the most motivated to save your home. It does not make sense to entrust your families home and financial future to someone you never met or know very little about. When you make the decision to work directly with your bank to find a solution, you are taking control of your success.
If your ready to get serious about saving your home, then you need to make the commitment to learn about how to get loan modification help from your lender. You do not have to try to figure this out all by yourself however, you can use the information in a best selling kit for homeowners to learn the basics. Being prepared and persistent is the key to success. Your home and financial security are worth the time and effort. We agree with President Obama-you can do it yourself!