Truth in Foreclosure

News Flash

According to Housingwire.com, Congress expects to put out a program similar to the Home Affordable plan to help homeowners trying to short sell their home or give it back to the bank through a deed in lieu.

And they expect to have the details out by late this month.  Of course, if we use the Home Affordable Modification Program as a guide, that means your servicer probably won’t have any info until mid-late October and it’ll be December before they get their act together and start processing packages.

Housingwire.com quotes source from the Treasury Department and FHA, so their info is probably pretty good…but right now everyone’s in a wait and see mode.

FHA Commissioner David Stevens said,

Because we know that the MHA program will not reach every at-risk homeowner or prevent all foreclosures, on May 14th the Administration announced the Foreclosure Alternatives program that will provide incentives for, and encourage, servicers and borrowers to pursue short sales and deeds-in-lieu (DIL) of foreclosure in cases where the borrower is generally eligible for a MHA modification but does not qualify or is unable to complete the process,” he said, according to prepared remarks.

What’s It All Mean?

Reading between the lines here, the program will be for those homeowners whose monthly payment can’t be brought below the 31% debt to income ratio even if they drop the interest rate to the 2% floor.

I think it also means the program probably won’t work for investors…although we’ll have to wait and see, I guess.

Your guess is as good as mine as to what the incentives will be, but the overall goal is to standardize the process and the financial criteria servicers use to determine whether a short sale or a deed in lieu of foreclosure is an acceptable solution.

Keep Your Browser Tuned Here for Updates!

You can bet I’ll be watching this closely because I have a vested interest…my house is going through a short sale right now.

But also because I want to keep you informed.

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