How current events impact your business and real estate holdings

Thursday, June 21, 2012


The Home Affordable Foreclosure Alternatives (“HAFA”) Program has been extended through 2013 pursuant to Supplemental Directive 12-02. This extension is coupled with many changes to the Policies governing HAFA, effective June 1, 2012, which servicers shall implement immediately. They are, including but not limited to, the following:
1 )      Occupancy Requirements: None, although the following conditions exist: Borrower(s) must not have purchased another residential property in the previous twelve (12) months, nor can the property be owned or secured by a business entity.
      2 )      Relocation Assistance: $3,000.00 is limited to the primary occupant of the premises at the time of execution of the agreement (short-sale or deed-in-lieu). Occupants must vacate on or before closing. Vacant properties are ineligible for this option.
3 )      Second Lien Maximum: Increased from $6,000.00 to $8,500.00.
      4 )      Debt to Income Ratio: A borrower’s monthly mortgage payments are now permitted to exceed 31% of a borrower’s grossly monthly income, allowing a servicer to accept full payment to keep the borrower current on their mortgage.
5 )      Credit Bureau: If a deficiency is forgiven as a result of a short-sale or deed-in-lieu, the following Base Segment fields may be reported as follows, if applicable: Account Status Codes amended to 13 (Paid or closed account/zero balance) OR 65 (Account paid in full/foreclosure started).
The following amendments to HAFA should greatly improve its goal of assisting borrowers in need. Supplemental Directive 12-02 in its entirety can be found here: .

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