Breaking news from the Treasury….

Obama’s HAMP is a Flop!

Over 800.000 homeowners “booted” from the Home Affordable Modification Program.

Where do these homeowners turn?  Short sales or foreclosures…that’s the option.

Here’s the article from Arthur Delaney via HuffPost.com:

WASHINGTON — The U.S. Treasury Department announced Wednesday that more than 600,000 homeowners across the country have been granted “permanent” mortgage modifications under the Obama administration’s signature anti-foreclosure effort, the Home Affordable Modification Program.

The latest monthly release shows, however, that more than 800,000 homeowners have been bounced out of HAMP as of January.

So-called permanent modifications, which last for five years, typically reduce struggling borrowers’ monthly payments by roughly $500 through reductions in the interest rate, extensions of the mortgage terms and temporary forbearance (though not forgiveness) of principal owed.

Of the 607,607 permanent modifications that have been started since HAMP’s 2009 launch, 68,114 have been canceled. That means only 539,493 homeowners remain in active modifications. Combined with the three-month “trial” modifications that have been canceled instead of made permanent, 808,354 homeowners have been booted from the program.

When HAMP was announced, President Barack Obama said it would modify mortgages for 3 to 4 million homeowners. The Treasury Department has since disavowed that goal, arguing instead that the benefit of HAMP is that it has given foreclosure-bound homeowners a softer landing, soothed the devastated housing market and raised standards for the mortgage servicing industry.

A Treasury official said Wednesday that “by setting affordability standards and developing a framework for how mortgage servicers provide assistance to struggling families, HAMP has established critical protections for homeowners and has catalyzed improvements in modifications industry-wide.”

Borrowers are eligible for HAMP if they meet several criteria, the most important of which is monthly payments that eat up more than 31 percent of monthly income. Servicers get $1,000 incentive payments for permanent mods, but housing experts have said servicing incentives remain tilted toward delinquency and foreclosure. Despite clear eligibility criteria, many borrowers have found themselves trapped in trial modifications that inexplicably drag on for far longer than the standard three months, as banks lose paperwork while simultaneously threatening to foreclose.

How Will a Short Sale Affect my Taxes in Orange County? from Kim and Kris Darney on Vimeo.

As of 2009 more than 11.3 million residential properties fell into negative equity. That equals 24% of all homes in America with a mortgage. Consider walking outside of your front door, and realizing that 1 in 7 of your neighbors are in jeopardy of foreclosure.

Questions regarding tax ramifications are high on the list. We’re not CPA’s, but do understand the mortgage debt relief act that President Bush put in place in 2007 that works with the IRS to eliminate any Capital Gains taxes when you short sale your primary residence. Governor Schwarzenegger is looking to legislators to bring a bill that will give relief to homeowners that do short sales.

Homeowners that are considering a short sale also wonder how hard it will be to purchase another home. There are current programs that allow a seller to purchase at the same time as they short sell. These loans follow FHA Guidelines and one of the conditions are that the seller can not miss any payments during the short sale. In most cases, a seller can buy again in about 2 years if they meet lender requirements.

Realize that you have options, your not alone….24% of Americans that have a mortgage payment are behind. Banks have openly shared that a short sale is looked upon as a favorable solution to a foreclosure. We have worked with many clients that have never missed a payment and have decided to short sale for various reasons,

Short sales are a dignified solution to a bad economic situation.

Some of the highlights of HAFA include an incentive of up to $3000 for relocation costs that is paid to the home seller at close of escrow with a successful short sale. Non recourse settlements are also a huge benefit to the homeowner under the new program. If you are looking for alternatives to foreclosure, a short sale may be the answer.

We will schedule a discreet confidential meeting with you to answer all of your questions regarding a short sale.

24% of all Americans that have a mortgage are underwater, you’re not alone. A short sale is a dignified solution to a bad economic situation.

Kim and I run across this all the time.  IT IS ILLEGAL

Most recently we have been requested from Citi and Bank of America Negotiator did not care…It’s clearly in violation of REPA laws.

FASLO Solutions is another violator…they go as far as having an agreement outside of escrow between buyer and FASLO…Thats no lie!

Short Sell your home…it’s a business decision!

How does the proposed MHA Short Sale and Deed In Lieu program guidelines effect my Short Sale business?

Recently, on another blog there was an article published that was misleading and (frankly) a little deceptive regarding the effects of MHA on the existing Short Sale process. I don’t often call attention to this sort of thing. But, today…I am making an exception. Why? Simple, our country…our industry doesn’t need anyone passing along incorrect information.

So, starting today….whenever we come across misleading…incorrect information we will let you…our students and fellow real estate professionals know. If this offends the offender then so be it.

The fact is HREU has been coaching our Agent Short Sale Secrets students to the new MHA proposed guidelines for nearly 12 months now. These proposed guidelines are certainly nothing new…and nothing to worry about.

As you will note…these guidelines are merely proposals and lenders/ servicers can participate if they choose. There has been a lot of chatter in the real estate community that the proposed MHA guidelines will radically alter the Short Sale process. Matter of fact, its been brought to my attention that a few folks have popped up who are trying to convince agents that the MHA proposed changes are something to worry about….they are not. As any HREU Agent Short Sale Secrets student will tell you…when a lender is following the MHA guidelines the Short Sale actually goes smoother and faster.

So, I am going to clear the air.

Before I do..a couple important points you need to clearly understand:

1) HREU is the nations largest online real estate university. As you know, we often report relevant real estate news to you days and often weeks before you read elsewhere. Agents, if there are changes that will effect your business you can rest assured that we will tell you.

2) We have been talking about MHA on this blog since it was proposed months ago. This is nothing new.

3) Lenders are NOT REQUIRED to participate in this proposed program.

4) In case you missed it…this is a proposed program….lenders are NOT REQUIRED TO PARTICIPATE. In preparing this blog post I emailed a few of the folks we are in contract with at the major lenders (Wells Fargo, BOA, Citi) and they confirmed that the guidelines are merely proposals. In other words, Not an actual law/ rule etc. If you are dealing with a FHA owned loan then you probably will be working with a servicer who is using the MHA guidelines.