Get Ready for HAFA and Alt Mod (Alternative Modification)

[Jan Baron, RDCPro, CSP, BPOR]

Coming up in April! HAFA (Home Affordable ForeclosureAlternative) which allows homeowners who did not qualify forHAMP (Home Affordable Mortgage Program) to exit their loan,do a Short Sale, avoid a Foreclosure, leave their credit intact, and befully released of future liability for the debt.

However, HAFAdoes not include Fannie Mae and Freddie Mac loans. They have justreleased their own version of HAFA called Alternative Modification (AltMod).

In both these programs, the homeowner must havepreviously tried and been denied a permanent loan modification. And, inboth these programs the second lien holder does not have to play or beobligated to release future liability if it does decide to play. Forthat situation we have the 2MP (Second LienModification Program). 2MP has been in effect for almost a year but BOAwas the only servicer participating. Wells Fargo just got on board thisweek.

Although there are some who did actually qualify for apermanent loan modification, for the majority these new programs arejust prolonging the agony of many homeowners who feel their life is inlimbo. Unfortunately it is delaying the inevitable and manipulating thetiming of the foreclosure wave.

Would love to hear your comments.

[Carolyn Kruse]

Just a small correction. HAMP is Home Affordable Modification Program. Actually the Fannie and Freddie loans are included. Actually the US Dept of Treasury has appointed Freddie to serve as the compliance agent for HAFA. These two departments along with various other sources put together the standard document package and guidelines that must be used for this. There is a $3000 cap for subordinate lien holders. Complete release from any further liability for the borrower and $1500 relocation assistance.