Wednesday, September 5, 2012
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If you feel you are stuck with a home that has a mortgage larger than its value, it may be time to consider a short sale. For more reasons than ever now, there are programs issued by the government designed to help homeowners through this very difficult time in their lives.
With already existing incentives, such as the $3000 relocation funding that is disbursed in many short sale transactions, there are now some more guidelines that have widened the scope of qualifying homeowners.
First, let’s look at the six must-know items about the HAFA (Home Affordable Foreclosure Alternatives Program) that have been around for some time now:
• The home must have been purchase prior to 2009
• It must be delinquent, in default or seriously in jeopardy of being in default
• An unpaid principal balance of less than $729,750 is the limit
• The lender servicing the loan must be a HAMP (Home Affordable Modification Program)
• The home must be the applicants’ primary residence*
• The monthly mortgage amount is not to exceed 31% of the homeowners’ gross income*
Now, having said all this, notice the asterisks on the last two points above. The notes below will share the most recent changes to the program that have enhanced qualification eligibility guidelines.
*Effective June 1, 2012 President Obama Administration made some important changes to the HAMP Program. Among other relaxed guidelines, homeowners with secondary properties that are currently rented or where the homeowner intends to rent them may qualify.
Another change reported to the program is related to homeowners’ debt-to-income ratios. As of the newest guidelines, borrowers that exceed 31% debt-to-income ratio may still be eligible for the program.
We know that not all benefits are available but a lot of it has nothing to do with whether a seller qualifies for it or not. The real reason many homeowners never see light of day on some of these cash incentives is because they are dealing with an agent that has little to no experience with short sales and the HAFA program. A good real estate agent that understands the HAFA process is critical. If you end up working with a real estate agent that is less experienced with these types of sales then you stand to risk losing thousands of dollars. And for no good reason.
It’s all about knowing the timing of the process, filling out all documents precisely and completely, making sure everything is perfect. As far as the $3,000 relocation incentive that is a part of the HAFA program or other potential lender-based incentives, only your lender will actually be able to tell you whether you qualify for an incentive. What we can do is position you to be a strong candidate for what might very well be rightfully yours. For a customized consultation to discuss your specific home and situation, contact us today.
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