What is the Making Home Affordable Program?

23 Mar

The “Making Home Affordable” program is really a group of programs put out by the Departments of Treasury &

Questions about Making Home Affordable

Questions about Making Home Affordable

Housing and Urban Development.  These  programs have been designed to help homeowners who are having trouble paying their mortgage.  I’ll go over 2 of the more interesting of the programs encompassed within the Making Home Affordable suite of programs.

Home Affordable Modification Program (HAMP)

HAMP aims to help those homeowners having a tough time making their mortgage payments by lowering your mortgage payment to 31% of your gross income.  One thing to remember is that in order to qualify for HAMP you must not be unemployed.  Some of the other criteria   for qualifying are below:You occupy the house as your primary residence.

  • You occupy the house as your primary residence.
  • You obtained your mortgage on or before January 1, 2009.
  • You have a mortgage payment that is more than 31 percent of your monthly gross (pre-tax) income.
  • You owe up to $729,750 on your home.
  • You have a financial hardship and are either delinquent or in danger of falling behind.
  • You have sufficient, documented income to support the modified payment.
  • You must not have been convicted within the last 10 years of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction.

These are the guidelines that have been put out by the Treasury & Housing and Urban Developments departments is for guidance only.  Your lender may have other eligibility requirements as well.

Home Affordable Foreclosure Alternatives (HAFA)

HAFA is a program introduced in April of 2010.  It was meant for homeowners who did not qualify for HAMP and/or just wanted to sell their home in a short sale.  The touted benefits of the HAFA program were that your lender would have to agree to waive the balance owed after the short sale and you would be paid $3000 at closing to assist in relocation.  In order to be eligible for HAFA you would have to fulfill the following requirments:

  • You live in the home or have lived there in the last 12 months.
  • You are delinquent or can prove an imminent default.
  • You have a documented financial hardship.
  • You have not purchased a new house within the last 12 months.
  • Your first mortgage is less than $729,750.
  • You obtained your mortgage on or before January 1, 2009.
  • You must not have been convicted within the last 10 years of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction.

One of the important factors not mentioned within these eligibility requirements is how they deal with junior liens.  If you have two loans on the property then the HAFA program allows for up to 6% of the unpaid principle balance (UPB), up to $6000, to be paid to the junior lien holder.  This is a very important requirement of HAFA because depending on how large your 2nd lien is, there is a chance that even if all other requirements are met the junior lien will deny the short sale because they demand more than 6% of the UPB.  Whether or not your junior lien holder will accept 6% can vary depending a couple of factors first and foremost how big is your junior lien and secondly who your lien holder is can make a big difference as well…..

Will the Making Home Affordable program help me?

While we have not seen many HAFA short sales get approved we have seen a few and the $3000 relocation incentive could be a big help in transitioning to your next home.  If you would like to find out what your chances are of getting approved for a HAFA short sale give me a call @ 916.585.3636.

The HAMP program is a good program for those homeowners for whom a loan modification makes sense.  Who does it make sense for?  Thats a good question, for most of clients that really comes down to their personal situation;  If this is something you are interested in we do have a tool in house that can give you a pretty good idea of a. whether or not you would be approved for a loan modification and b. what your modified payment would be.  All we need is a bit of information about the mortgage and your finances, a brief 10 minute phone consultation is usually all you need, if this is something that interests you give me a call today @ 916.585.3636.

 

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Keller Williams Realty
Direct Phone – 916.585.3636
Peter@PeterParkerTeam.com
www.PeterParkerSellsHomes.com
Short Sale Genius – Elite Level
N.A.R. Certified Short Sales and Foreclosure Resource

DRE #01257844

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