HAFA Targets Reducing Foreclosure Numbers
From Monday 5th April a new government programme kicked off aimed at reducing foreclosure numbers. It will expedite short sale process and stop the banks from chasing the borrowers with deficiency judgments. This step would be a big one taken in the right direction to lessen the sting of the foreclosure bite in Las Vegas.
HAFA of Home Affordable Foreclosure Alternatives is included in the Obama government’s HAMP plan involving $75 billion. The new guiding rules would make the process simpler and give more incentives to both contending parties – the borrowers as well as the lenders so as to skip foreclosures.
Nearly 70% of the homeowners in the city who have gone underwater with the loan value being more than the worth of the property are expected to get relief from this step. Till now it has been a tough job to get approval from the lenders for short sales. In a short sale the house is sold by the owner for an amount that is less than the debt. It requires permission from the lenders and the assurance from them that they will not chase the borrowers, even after the sale, to recover the balance amount. The banks have been avoiding giving the nod despite government pressure. This has caused all round frustration.
Randy Bridges of Realty One Group in Las Vegas said, “This is the government’s way to kick lenders in the butt to get them going and get them to abide by these guidelines. This would be a good opportunity for our elected officials to restore the confidence that has been lost recently.”
HAFA mandates that once the bank has forgiven the balance due amount in a short sale it cannot take recourse to deficiency judgment and harass the borrowers. The best clause in the new plan is that the lenders would have to give a reply to the homeowner either in the affirmative or negative ten days after a written request has been submitted.
Bridges quipped, “That is outstanding. It’s huge. I don’t think it’ll work but we’ll give it a try.”
The HAMP plan has been operating since 2009 March but it has hardly made a dent in Nevada. The state is leading the nation in foreclosure rate with 1:19 according to RealyTrac. Over half of those who modified their loans under the HAMP scheme during the first quarter of last quarter have started to re-default within nine months according to the findings of Office of the Comptroller of Currency and the Office of Thrift Supervision.
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HAFA Targets Reducing Foreclosure Numbers
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- There is Good News for Some Foreclosure Victims from Fannie and Freddie
- Treasury Bringing Back Hope to Foreclosure Victims with New Plans About Short Sales
- In Nevada Walking Away from Foreclosure would be an Unwise Move for Borrowers
- Avoiding Bank Foreclosure Through Mediation in Connecticut
