Archive for May, 2009
Foreclosure Alternatives Plan
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Foreclosure Alternatives Plan
Good news from Washington, D.C., today (5-14-09). The Obama administration announced new details under its Foreclosure Alternatives Program (FAP) enabling servicers and borrowers to pursue short sales and deeds-in-lieu (DIL) of foreclosure in cases where the borrower is generally eligible for a Making Home Affordable modification but does not qualify or is unable to successfully complete the three month trial period. The program, effective through 2012, requires that prior to proceeding with a foreclosure, servicers must determine if a short sale is appropriate.
We’re gratified that the administration has recognized the need to streamline the short sale and deeds-in-lieu processes, and has provided viable options to homeowners who have fallen behind on their mortgages but owe more than their homes would sell for in today’s challenging market.
Homeowner Mortgage Workout Programs
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On Wednesday, February 18, 2009, President Obama announced his new Homeowner Affordability and Stability Plan to help troubled homeowners avoid foreclosure.
For a free Homeowner’s Guide to Making Home Affordable - click here.
This plan will offer assistance up to 9 million homeowners and applies only to primary residences.
The first component of the plan allows homeowners who are current to refinance an existing Fannie Mae or Freddie Mac conforming loan with a loan-to-value ratio up to 105 percent.
The second component addresses homeowners who are at risk of foreclosure on their mortgages, but they do not have to be delinquent.
The government will work with the lenders to ensure that monthly mortgages do not exceed 31 percent debt-to-income ratio.
Furthermore, the government will seek to create clear and consistent guidelines for loan modifications.
The details of the Homeowner Affordability and Stability Plan were released on Wednesday, March 4, with the introduction of the Making Home Affordable plan. Please look at the appropriate charts below to read about the summary of these new programs.
