Short sales or deed in lieu of foreclosure can be used if borrowers :
Do not qualify for a Trial Period Plan
Do not successfully complete a Trial Period Plan
Miss at least two consecutive payments during a HAMP modification or
Request a short sale or deed in liu
With either the HAFA short sale or DIL, the servicer may not require a cash contribution or promissory note from the borrower and must forfeit the ability to pursue a deficiency judgment against the borrower.
HAFA considerations for this program state the borrower must be considered fro HAMP first and that data can be use for the HAFA information
1. If the borrower can provide documentation that they were required to relocate at least 100 miles from the property for new employment or employment transfer and there is no evidence that he borrower purchased a new property 90 days prior to the short sales agreement or request of DIL, then the property can be vacant for 90 days prior to the agreement.
2. The mortgage must have originated on or before Jan 1, 2009.
3. The mortgage must be delinquent or in imminent default
4. The Unpaid principal must be less than or equal to $729,750.
5. The total monthly housing related debt must exceed 31% of borrower’s gross monthly income.
6. Borrowers in active bankruptcy can be considered for HAFA
Evaluation for potentially eligible borrowers
If the servicer has not discussed a short sale or DIL with the borrower they must notify the borrower in writing and allow the borrower 14 days to contact the servicer for HAFA consideration.
If a HAFA short sale or DIL is not available the servicer must notify the interested borrower in writing.
The short agreement must include along with some other details:
A termination date of not less than 120 days.
Listed with local licensed realtor
List price and net sales price approved by servicer
Real estate commission not to exceed 6%
An agreement that borrower is entitled to a relocation incentive of $3,000 upon a successful closing. Deducted from gross sale proceeds at closing.
Borrower must sign and return with 14 days along with broker listing and junior lien holder info.
The short sale can terminate for several reasons.
In approving the short sale the borrower must provide the executed agreement to the servicer with in 3 business days and the servicer must approve or disapprove within 10 days of receipt.
DEED in lieu for foreclosure
This requires marketable title meaning there are no other liens,taxes owed and other items.
Specified vacate date
$3,000 relocation assistance
Terms and conditions:
Reduced payments during the consideration period 31%
No subordinate liens. Borrower is responsible for clearing junior liens.
A Servicer with special circumstance can accept a DIL without the 90 day marketing period.
If you have any questions please contact David@ambroselawgroup.com or call 248-624-5500