We all know that countless families and individuals all over are facing the threat of foreclosure. It's also no secret that the lenders and investors who own our mortgage debt have been very slow to come up with viable solutions to the foreclosure epidemic. The Federal Government has been working to push lenders in the right direction, but the government is also sometimes slow. They've previously been focused on encouraging lenders to modify the terms of homeowner's loans to affordable monthly payments. It appears that after nearly a year of this process, finally, a significant number of loans are in fact being restructured and in turn some people are being spared the foreclosure process.
Unfortunately, lending practices of the middle 2000s were much more haywire than most Americans know, including our representatives in DC, and as a result there are millions of people in homes that they will probably never be able to afford. In other words, modifying a loan will not be the solution for everyone. Since the middle of 2007, Roberto and Rusty have advocated that every home owner should evaluate all their potential options and do what makes the most financial sense for them. Many times that means a Short Sale (sell the home and simultaneously negotiate a reduced payoff for the loans against it). It seems that the legislators are finally beginning to agree, because they have come up with a plan to give incentive to lenders for agreeing to reduce the payoff of a homeowner loan upon the fair market sale of their property.
The program is called Home Affordable Foreclosure Alternatives or HAFA.
http://www.car.org/legal/legal-questions-answers/2010-qa/hafa-short-sales/ is a good place to read the details of this program.
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