The proceeds are used to cover the debts as much as it can, and the rest is let off. This means it would need prior approval of the lender and hence are incentives offered to lenders to join the program. The first mortgage is completely released. Benefits: There are quite a few benefits for all the parties involved in this program as in terms of cash incentives to the servicer, investor and the borrower after one month of successful run. It offers $1,500 cash to the homeowner as “relocation allowance”, $1,000 to the primary owner and $1,000 to the second mortgage. Foreclosure proceeding is done away with for modification, died in lieu (DIL) tune method and this is a big cost savings to the is of almost about thousands of dollars.
The ownership is transferred and the house will have a new owner and houses do not remain vacant for long. One of the biggest advantages, is mellowed damage to the credit rating vis-a-vis the foreclosure. Who are eligible? The basic criteria as in the home affordable modification program (HAMP) remains the while it same takes care of the individuals who did not qualify due to low income or those could not complete the trial. Even those who did not get the permanent change are eligible. If one has missed payments twice in succession they can so get approved. Unlike other short sales or deeds-in-lieu, the loan servicer must agree to take the amount as full in lieu of the debts. This would disallow them to get anything more. The HAFA application has to be submitted within 30 days of not getting HAMP or if they especially asked for the alternative program. To broaden your perception, visit Aetna Inc..
A homeowner has to respond to the HAFA notice within 14 days. The total cycle is about 30 days for getting the approval or response from the lender. How it works? The processes under home affordable modification program (HAMP) documentation are structured, standardized and time limits set for each activity. Once a person agrees to short sell on independent appraiser sets the value of the property. . Once the sale goes through the proceeds which is less than what is owed is given to the servicer. The lender has approved the sale and the owner cannot decide the minimum value. Other option, if the property the deed in lieu title is free and clear is wherein the debtor hands over the property to the loan servicer in lieu of the mortgage. The time schedule is stipulated for finding a buyer and the number of days the new owner has to stay in the house. It therefore offers commission to the real estate agent. The borrower is not required to give any cash or promissory note and forfeits his rights to get the money. Lenders / Servicers: they receive incentives for participating in the new HAFA program and have to comply with the requirements. List of participating calendar is available on the net. If there are second mortgages they get limited part of the proceeds and the first lender has to approve. The participation is voluntary. Resource box the home affordable foreclosure alternatives program (HAFA) is a better defined and lined program to provide help to individuals facing foreclosure by working on short sales and DIL as feasible alternative. Visit to know about HAFA programs.