Treasury Department Modifies HAFA Program
Treasury Department Modifies HAFA Program
Treasury Department Modifies HAFA Program
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February 2, 2011 (Shirley Allen)
mortgage-help-image
Important changes took effect yesterday in the government’s Home Affordable Foreclosure Alternative (HAFA) program. The Treasury Department has revamped its short sale program by easing income restrictions and documentation requirements for homeowners facing foreclosure to help streamline the HAFA process and make the program more accessible to homeowners. In the first eight months, only 661 short sales have been processed through the program.

One of the most significant changes is the elimination of the requirement that the borrower’s total monthly mortgage payment exceeds a 31% debt-to-income ratio, a requirement that many industry professionals believe should never have been there in the first place. This change will allow more people to qualify for HAFA, broadening the reach of the program.

Another change that will allow more people to apply is that the amount of time that a property may have been vacant prior to signing a short sale agreement has been extended from 90 days to 12 months. However, the requirement that the property was the sellers’ principal residence prior to relocation remains.

Other changes pertain to second mortgages. Previously, second-mortgage investors were required to accept 6% of the unpaid balance owing to them, up to a cap of $6,000. Under the new guidelines, the $6,000 cap for second mortgages remains in place, but the 6% rule has been eliminated.

The HAFA process will also be streamlined by a requirement mortgage servicers provide borrowers with a short sale agreement within 30 days of being requested to do so.

Travis Olsen, chief operating officer at Loan Resolution Corp., expects the changes will lead to a big jump in HAFA enrollment. “A lot more people are going to qualify for the program,” he said. “Elimination of the debt-to-income requirement along with the relaxed non-owner occupancy rule makes it easier for those who do qualify to get their short sale successfully closed.” LRC is a Scottsdale, Ariz., vendor that specializes in short sales.

Borrowers are entitled to a $3,000 relocation incentive payment when a short sale or DIL is completed. When a deed in lieu transaction is completed, the mortgage servicer can make the incentive payment even if the borrower stays as a renter under the HAFA changes.

Mortgage servicers will have the option to pay the borrower a relocation incentive either upon a successful surrender of title or when the borrower vacates or re-purchases the property at a future date, according to a TARP Inspector General report.

Tags: HAFA, treasury department, homeowners, mortgage servicers, debt-to-income ratio, short sale, principal residence, occupancy rule

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Helpful Tools
Mortgage
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Estimate your monthly mortgage payment
Auto Loan
Calculator

Determine how much car you can afford before buying
Learn About
Mortgage Loans

Learn about the different types of home loans
15 Year vs 30 Year
Loan Comparison

Compare 15 year and 30 year mortgage loans
Todays Mortgage
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February 2, 2011 (Shirley Allen)
mortgage-help-image
Important changes took effect yesterday in the government’s Home Affordable Foreclosure Alternative (HAFA) program. The Treasury Department has revamped its short sale program by easing income restrictions and documentation requirements for homeowners facing foreclosure to help streamline the HAFA process and make the program more accessible to homeowners. In the first eight months, only 661 short sales have been processed through the program.

One of the most significant changes is the elimination of the requirement that the borrower’s total monthly mortgage payment exceeds a 31% debt-to-income ratio, a requirement that many industry professionals believe should never have been there in the first place. This change will allow more people to qualify for HAFA, broadening the reach of the program.

Another change that will allow more people to apply is that the amount of time that a property may have been vacant prior to signing a short sale agreement has been extended from 90 days to 12 months. However, the requirement that the property was the sellers’ principal residence prior to relocation remains.

Other changes pertain to second mortgages. Previously, second-mortgage investors were required to accept 6% of the unpaid balance owing to them, up to a cap of $6,000. Under the new guidelines, the $6,000 cap for second mortgages remains in place, but the 6% rule has been eliminated.

The HAFA process will also be streamlined by a requirement mortgage servicers provide borrowers with a short sale agreement within 30 days of being requested to do so.

Travis Olsen, chief operating officer at Loan Resolution Corp., expects the changes will lead to a big jump in HAFA enrollment. “A lot more people are going to qualify for the program,” he said. “Elimination of the debt-to-income requirement along with the relaxed non-owner occupancy rule makes it easier for those who do qualify to get their short sale successfully closed.” LRC is a Scottsdale, Ariz., vendor that specializes in short sales.

Borrowers are entitled to a $3,000 relocation incentive payment when a short sale or DIL is completed. When a deed in lieu transaction is completed, the mortgage servicer can make the incentive payment even if the borrower stays as a renter under the HAFA changes.

Mortgage servicers will have the option to pay the borrower a relocation incentive either upon a successful surrender of title or when the borrower vacates or re-purchases the property at a future date, according to a TARP Inspector General report.

Tags: HAFA, treasury department, homeowners, mortgage servicers, debt-to-income ratio, short sale, principal residence, occupancy rule

FILL OUT THE FORM
It all starts here. Select the loan product you want to apply for and complete the subsequent questionnaire.
WE VERIFY & TRANSMIT TO LENDERS
Once we receive your completed questionnaire we verify a couple vital pieces of information and direct your information to our network of lenders, all within minutes.
REVIEW YOUR OFFERS
With offers in hand you can now compare rates and costs and get the best possible deal. Comparison shopping made easy. You fill out one form and lenders compete for your business.
CHOOSE YOUR LENDER
Congratulations! With the great learning tools we provide for you at LoanRateNetwork and the offers you have received, you've found the right product and the best rate.
HOW LOANRATENETWORK
LOAN CENTER WORKS
ADVANTAGES OF USING
LOANRATENETWORK
FAST & EASY. DATA ENCRYPTED
Applying to multiple lenders is fast and easy with our one simple questionnaire. Choose the product you’re looking for, take a few moments to answer a few questions and you’re on your way to saving.
NO OBLIGATION. NO HIDDEN FEES
Any of the services on our website are 100% free, there is no obligation to use our services or any hidden fees. We’re not loan brokers so we don’t charge broker fees like other websites.
NO SSN OR CREDIT CHECK
No SSN or credit check is necessary to use our services. We bring lenders to you so they can compete for your business and you save. That information only becomes necessary after you choose a lender.
Helpful Tools

February 2, 2011 (Shirley Allen)
mortgage-help-image
Important changes took effect yesterday in the government’s Home Affordable Foreclosure Alternative (HAFA) program. The Treasury Department has revamped its short sale program by easing income restrictions and documentation requirements for homeowners facing foreclosure to help streamline the HAFA process and make the program more accessible to homeowners. In the first eight months, only 661 short sales have been processed through the program.

One of the most significant changes is the elimination of the requirement that the borrower’s total monthly mortgage payment exceeds a 31% debt-to-income ratio, a requirement that many industry professionals believe should never have been there in the first place. This change will allow more people to qualify for HAFA, broadening the reach of the program.

Another change that will allow more people to apply is that the amount of time that a property may have been vacant prior to signing a short sale agreement has been extended from 90 days to 12 months. However, the requirement that the property was the sellers’ principal residence prior to relocation remains.

Other changes pertain to second mortgages. Previously, second-mortgage investors were required to accept 6% of the unpaid balance owing to them, up to a cap of $6,000. Under the new guidelines, the $6,000 cap for second mortgages remains in place, but the 6% rule has been eliminated.

The HAFA process will also be streamlined by a requirement mortgage servicers provide borrowers with a short sale agreement within 30 days of being requested to do so.

Travis Olsen, chief operating officer at Loan Resolution Corp., expects the changes will lead to a big jump in HAFA enrollment. “A lot more people are going to qualify for the program,” he said. “Elimination of the debt-to-income requirement along with the relaxed non-owner occupancy rule makes it easier for those who do qualify to get their short sale successfully closed.” LRC is a Scottsdale, Ariz., vendor that specializes in short sales.

Borrowers are entitled to a $3,000 relocation incentive payment when a short sale or DIL is completed. When a deed in lieu transaction is completed, the mortgage servicer can make the incentive payment even if the borrower stays as a renter under the HAFA changes.

Mortgage servicers will have the option to pay the borrower a relocation incentive either upon a successful surrender of title or when the borrower vacates or re-purchases the property at a future date, according to a TARP Inspector General report.

Tags: HAFA, treasury department, homeowners, mortgage servicers, debt-to-income ratio, short sale, principal residence, occupancy rule

HOW LOANRATENETWORK
LOAN CENTER WORKS
FILL OUT THE FORM
It all starts here. Select the loan product you want to apply for and complete the subsequent questionnaire.
WE VERIFY & TRANSMIT TO LENDERS
Once we receive your completed questionnaire we verify a couple vital pieces of information and direct your information to our network of lenders, all within minutes.
REVIEW YOUR OFFERS
With offers in hand you can now compare rates and costs and get the best possible deal. Comparison shopping made easy. You fill out one form and lenders compete for your business.
CHOOSE YOUR LENDER
Congratulations! With the great learning tools we provide for you at LoanRateNetwork and the offers you have received, you've found the right product and the best rate.
ADVANTAGES OF USING
LOANRATENETWORK
FAST & EASY. DATA ENCRYPTED
Applying to multiple lenders is fast and easy with our one simple questionnaire. Choose the product you’re looking for, take a few moments to answer a few questions and you’re on your way to saving.
NO OBLIGATION. NO HIDDEN FEES
Any of the services on our website are 100% free, there is no obligation to use our services or any hidden fees. We’re not loan brokers so we don’t charge broker fees like other websites.
NO SSN OR CREDIT
CHECK
No SSN or credit check is necessary to use our services. We bring lenders to you so they can compete for your business and you save. That information only becomes necessary after you choose a lender.