Feds Start New Short Sale & Deed-in-lieu of Foreclosure Options
Large numbers of people facing foreclosure have been helped by the government’s Making Home Affordable program, but what about those who can’t succeed under the plan?
Truth is, a lot of people who enroll in the foreclosure prevention program don’t make it. The government reports that through April 299,092 borrowers received permanent loan modifications under Making Home Affordable — and also that 277,640 borrowers had been cancelled.
Now both Fannie Mae and Freddie Mac — organization nationalized by the federal government — have issued rules which says that when a borrower cannot get a permanent modification they then have the “choice” of either a short sale (what lenders call a preforeclosure sale) or a deed in lieu of foreclosure under HAFA — the Home Affordable Foreclosure Alternative program.
Payments To Borrowers
To qualify, says Freddie Mac, the “borrower must be more than 60 days delinquent and have cash reserves less than the greater of $5,000 or three times their current monthly mortgage payment.”
If you have been in the Making Home Affordable program and have been cancelled, and if your loan is owned by Fannie Mae or Freddie Mac, then speak with your lender about a short sale or deed-in-lieu of foreclosure under HAFA. To see if your loan is owned by either company go to the Making Home Affordable loan lookup page.
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