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 On April 5, 2010 the U.S. Treasury Department launched the Home Affordable Foreclosure Alternatives (HAFA) program to help underwater borrowers struggling to sell their homes to avoid foreclosure. The HAFA program provides cash incentives to borrowers who utilize a short sale or deed-in-lieu to avoid costly foreclosures.
A short sale occurs when a mortgage lender agrees to allow a borrower to sell their home for less than the full payoff of the mortgage loan. Under the new HAFA rules, the lender must also agree to release the borrower from any deficiency liability, and accept the short sale proceeds in full satisfaction of the mortgage loan.
A deed in lieu of foreclosure is a transaction in which the borrower avoids foreclosure by simply signing over a deed to the lender, and relinquishing all interest in the mortgaged property. This saves the lender the time and expense associated with lengthy foreclosure proceedings, and allows the borrower to minimize the damage to their credit rating, avoid the public stigma of a foreclosure, and get out from under the mortgage debt, since the HAFA program also requires the lender to accept the deed-in-lieu in full satisfaction of the mortgage loan.
Additionally, the Treasury Department made last minute changes to the program on March 26, 2010, just days before its implementation, which raised the amounts of the incentive payments proposed in the plan. Eligible borrowers who utilize a short sale or deed-in-lieu to avoid foreclosure now receive $3,000 in relocation expenses, instead of the $1,500 proposed in the original plan.
If you are in need of assistance, over your head, underwater in your home's value, or perhaps you are one of the many that have circumstances for which you feel there is no other alternative but to "walk away" from your home, please give me a call. I have vast experience in assisting home owners work through the short sale process with their lenders and focus on their future today.
Lee Schostak
RE/MAX Classic
(313) 378-0447
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All agents of RE/MAX Classic are licensed in the State of Michigan to do business in the State of Michigan per license law requirements setforth by the state requirements.
RE/MAX Classic 29630 Orchard Lake Road Farmington Hills, MI 48334
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