Making Home Affordable Program

December 1st, 2009 HAMP UPDATE – New Program Offers Borrowers Foreclosure Alternatives

The program’s official name is the Home Affordable Foreclosure Alternatives Program (HAFA), and it’s part of an existing initiative, the Home Affordable Modification Program (HAMP). HAFA applies to loans not owned or guaranteed by Fannie Mae or Freddie Mac, which cover over half of all U.S. mortgages; however, Fannie and Freddie will issue their own versions of HAFA in coming weeks.

While HAFA’s goal is simple – increase the number of short sales and “deeds in lieu of foreclosure” by simplifying the process – the rules are complex, and it comes with 43 pages of guidelines and forms. Among other things, HAFA:

• Allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).

• Prohibits servicers from requiring a reduction in the real estate commission agreed upon in the listing agreement (up to 6 percent).

• Requires borrowers to be fully released from future liability for the first mortgage debt (no cash contribution, promissory note, or deficiency judgment is allowed.)

• Provides financial incentives: $1,500 for borrower relocation assistance; $1,000 for servicers to cover administrative and processing costs; and up to $1,000 for investors.

The program does not take effect until April 5, 2010, but servicers may implement it before then if they meet certain requirements. The program sunsets on Dec. 31, 2012.


Read the complete 43 page SHORT SALE GUIDELINES

On February 18, 2009, President Obama announced his Making Home Affordable Program, designed to help up to 7-9 million families avoid foreclosure by restructuring or refinancing their mortgages. This plan is designed to not only help responsible homeowners behind on their payments or at risk of defaulting, but prevents neighborhoods and communities from being dragged over the edge too, as defaults and foreclosures contribute to falling home values, failing local businesses, and lost jobs.

More detailed information can be found at

Guidelines to the Making Home Affordable Program

The Obama Administration announced the new U.S. Department of the Treasury guidelines. These guidelines enable servicers to begin modifications of eligible mortgages under the Administration’s Making Home Affordable Program – announced by President Obama on February 28, 2009.

Here are the key elements of the Obama plan summarized by the National Association of Realtors:

1. The Home Affordable Refinance Program. Under this program, eligible borrowers may refinance loans that Fannie Mae or Freddie Mac (the government sponsored enterprises, or GSEs) own or guarantee.  The program can help homeowner-occupants who are current in making loan payments and have loan-to-value ratios (LTVs) above 80 percent but not more than 105 percent.  Cash out refinancings are not permitted.  The program ends in June 2010.

2.  The Home Affordable Modification Program. This is a $75 billion program with lender, servicer, investor, and borrower incentives to make it work.  The program is limited to homeowner-occupants who are at risk of default or already in default and who have loans at or below the maximum GSE conforming loan limit of $729,750 (or higher for 2-, 3-, and 4-unit properties).  Loan modifications under the program may be made until December 31, 2012.

3. More Support for the GSEs. President Obama also announced more support for the GSEs, including doubling of potential Treasury investment from $100 billion to $200 billion for each GSE, to maintain their positive net worth.  The plan also raises the cap on mortgages that the GSEs may hold in their portfolios by $50 billion to $900 billion.

May 2009 – Obama Administration announces uniform Short Sale guidelines. Click here to read update.

June 2009 – Relief for military homeowners in financial distress UPDATE. Click here to read update.

If you are behind on your mortgage or know a friend that is behind on their mortgage please direct them to This is an excellent resource to determine if you are eligible for a Loan Modification.

If you do not qualify for a mortgage modification and need to sell your property. Please give us a call. We can help!

Our team has specialized training on helping homeowners who may be facing foreclosure. Please call us today for a no cost confidential consultation. We can be reached at: 850-259-1788

If you or someone you know is looking at buying or selling distressed property…rely on the experts, The Distressed Property Experts!

Note: The information provided is for informational purposes. No legal advise is given or implied. Please check with a qualified attorney in your area.