Government Loan Mod Changes
US Treasury’s new guidelines which are proposed to make it easier for some borrowers in financially dire circumstances to sell their homes through either a short sale or deed in lieu of foreclosure. The guidelines expand on the government’s Home Affordable Modification Program, known as HAMP, and provide financial incentives and simplify the procedures for completing short sales, which occur when a borrower sells a home for less than what is owed on his mortgage(s). Some of the incentives under this plan include:
1.) A borrower would receive $1,500 from the government (for relocation expenses) if he sells his home for less than the amount of his mortgage(s).
2.) Mortgage servicers and Investors who hold a first mortgage could receive up to $1,000 from the government for each completed short sale.
3.) Second mortgage holders can receive up to $3,000.00 of the sales proceeds in exchange for releasing their
4.) Borrowers who complete a short sale under the program must be “fully released” from future liability for the debt, according to the guidelines.
5.) Mortgage servicers have 10 days to approve or disapprove a request for short sale.