New rules in the Home Affordable Foreclosure Alternatives program were set in place February 1, 2011 in the hopes of streamlining the short sale and deed in lieu of foreclosure process due to the fact that there are concerns that decreases in home prices, continued unemployment difficulties, and increases in costs related to foreclosures that financial institutions must meet will require that steps be taken to help those who are having trouble finding the affordability they seek in their home loan payment.
Obviously, many homeowners have turned to these short sale and a deed in lieu of foreclosure alternative programs as a way to avoid a formal foreclosure process that comes with the loss of their home, but there have been some restrictions that have either slowed these processes or caused homeowners to be denied the plans to avoid the foreclosure process. Yet, if the Treasury Department has implemented new practices that will hopefully ease income requirements and documentation for homeowners who face the loss of their home through foreclosure but have attempted to take advantage of HAFA assistance plans.
While many homeowners have fought to save their home through modification plans and other foreclosure prevention initiatives, there have been numerous cases where these efforts have been unhelpful and, as a result, homeowners have turned to these alternative options in the hopes of not only avoiding the hit that their credit score they will take related to a foreclosure but also, when relocation is necessary, some homeowners have been able to qualify for relocation assistance which, for those in particular situations, have been helpful in meeting costs like moving or a security deposit on an apartment.
While these new guidelines for processing short sales or deed in lieu of foreclosure plans are hoped to qualify more homeowners for these initiatives or at least make the process faster for those who have been struggling to find solutions for their mortgage troubles, they are no guarantee in that some homeowners do still have to meet basic HAFA requirements before a short sale or deed in lieu of foreclosure agreement will be offered.
Obviously, homeowners who have faced difficult financial times, the loss of their income due to unemployment, or other troubles like negative equity may have a higher likelihood of qualifying for these assistance plans than homeowners who are simply in an underwater mortgage situation, for instance, and want to be rid of their home loan. It’s true that some homeowners may not benefit from these plans, but it’s hope that homeowners who may qualify for this type of mortgage assistance will now be able to do so more easily as changes in certain areas of the qualification process have been fully implemented for those seeking these alternative solutions.