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Housing initiatives and changing options for homeowners

With housing initiatives from the government in peril at the hands of politicians, the future of options available to struggling homeowners may be changing.

mortgage trends

mortgage trends

Frustrations with housing initiatives

In a recent report, it was noted that there is diminishing help available for underwater and financially distressed borrowers across the United States.

There are many types of help available to financially distressed mortgagees, but often this help is hard or difficult to obtain.Over the last few years, there has been a lot of media attention drawn to the difficulties of locating trustworthy and knowledgeable folks that are familiar enough with homeowner initiatives in order to effectively process a short sale package or triage a loan modification application.

In fact, it’s not uncommon to read an article about an initiative offered by a specific lender. Then, when you lift the phone and contact the lending institution, you cannot get through or the customer service representative has no knowledge of the topic in question.

Treasury housing initiatives

Here’s a list of the most common federal housing initiatives and whom to contact if you need support.

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Home Affordable Foreclosure Alternatives (HAFA) – This is a Treasury program that offers short sale and deed-in-lieu of foreclosure programs to certain distressed borrowers if and only if the first lien investor that owns the note on the loan participates in the program. To find out if a specific loan qualifies, contact the servicer and submit a package for review.

Home Affordable Modification Program (HAMP) – This is a Treasury program that offers a loan modification to certain borrowers. Underwater borrowers that apply must be able to demonstrate ability to make mortgage payments on the new terms offered by the lender. Only certain investors participate in the program and, if the loan modification gets approved, the borrower will sign new loan documents—just as s/he did when the loan was obtained. To find out if a specific loan qualifies, contact your servicer and submit a package for review.

Home Affordable Refinance Program (HARP 2.0) – This is a program that “rewards” underwater borrowers who have continually paid their mortgage for a specified period of time with the opportunity to refinance their current mortgage at today’s prevailing rates. It is for Fannie Mae and Freddie Mac loans only, and borrowers need to be able to qualify to obtain a new loan. To find out if a specific loan qualifies for HARP 2.0, contact a local or national loan officer that participates in the program. Borrowers do not need to contact their current mortgage servicer.

Although there has been a great deal of positive news about the housing industry in the last few weeks, this positive news may not last long. With the sequester just a few days away, there may be a new faction of distressed borrowers that need to take advantage of some of these Treasury housing initiatives.

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Written By

Melissa Zavala is the Broker/Owner of Broadpoint Properties and Head Honcho of Short Sale Expeditor®, and Chief Executive Officer of Transaction 911. Before landing in real estate, she had careers in education and publishing. Most recently, she has been able to use her teaching and organizational skills while traveling the world over—dispelling myths about the distressed property market, engaging and motivating real estate agents, and sharing her passion for real estate. When she isn’t speaking or writing, Melissa enjoys practicing yoga, walking the dog, and vacationing at beach resorts.

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