J.P. Morgan Chase is one of the major servicers who has been using alternatives to foreclosure as one route that homeowners may take when they are unable to sustain a home loan modification payment or qualify for other forms of foreclosure prevention assistance that may be offered from HAMP or other foreclosure prevention programs that come directly from a servicer or state housing agency. Obviously, there are some homeowners who are finding their financial position to be more solid, in terms of their ability to make to a mortgage payment, but there are still many men and women who are suffering from factors in their personal life which have prevented them from keeping their home, but when it comes to avoiding a formal foreclosure, the Home Affordable Foreclosure Alternatives plan has been a help to some.
According to the Treasury report released in July, which tracks data through the month of May of this year, J.P. Morgan Chase has started 6,120 HAFA agreements and completed 2,686 agreements, which may either consist of a short sale on a home or a deed in lieu of foreclosure agreement between a homeowner and servicer. There have been some cases where servicers are offering more foreclosure alternatives to homeowners simply because homeowners may not qualify for a home loan modification, cannot sustain their mortgage payments, or in cases where severe negative equity may be in place and a homeowner is suffering financial setbacks, it might be the best route for a bank and homeowner to take.
There are officials who want homeowners with J.P. Morgan Chase and other major banks to remember that a short sale, while it may seem helpful for a homeowner’s situation, can have a negative impact on a homeowner’s credit score, as can a deed in lieu of foreclosure agreement. Yet, homeowners feel that they may be seen in a more positive light if they work with their lender in this aspect due to the fact that homeowners who qualify for HAFA programs are usually those who have faced an unforeseen hardship like the loss of their job or cutbacks in their income.
In some cases, homeowners are happy to sell their home at a loss and get free and clear of a negative equity situation, but this is where homeowners must also make sure that they carefully look at the details of a short sale agreement as there are some homeowners who have been pursued by their lender after agreeing to short sell their home, and afterward, the bank wanted the difference in the price the home was sold for in the principal that was remaining on the home.
Typically, homeowners will not have to worry about this when going through the HAFA initiative, but some advisers are prompting homeowners to explore as many foreclosure prevention options as they can first before even considering selling their home, but in circumstances where a short sale is best, homeowners must make sure that they will be free and clear of any debt obligation to their servicer after they have participated in this particular foreclosure alternative plan.