On October 30, 2014, Supplemental Directive 14-04 (“Directive”) was issued modifying certain provisions of Version 4.4 of the Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages (“Handbook”). Among the revisions to the Handbook were substantial changes to the Home Affordable Foreclosure Alternatives® (HAFA) Program. One of the key components to HAFA is the relocation assistance provision that allows homeowners to receive up to $3,000 to assist with the costs of relocating. Effective February 1, 2015 the Directive increases the relocation assistance from $3,000 to up to $10,000. This is a substantial increase and should go a long way in incentivizing homeowners to participate in HAFA. However, perhaps more important to the short sale process is the Directive’s increase to the amount of money available to junior lien holders. Prior to the Directive junior lien holders could receive a maximum of $8,500 regardless of the principal amount of the loan securing the property. Effective February 1, 2015 the Directive increases the $8,500 to $12,000.
These HAFA changes should help both homeowners and real estate professionals obtain HAFA short sale approvals. Homeowners will be more willing to resolve their delinquent mortgage loans because of the increased incentive while subordinate lien holders will be more willing to participate in HAFA due to the increase in the potential payoff.
Homeowners willing to participate in HAFA may be eligible for an additional $5,000 in relocation money from the Transition Assistance Program (TAP) which is part of the Keep Your Home California Program. Eligibility for TAP is not guaranteed but it is important to explore all potential avenues for obtaining relocation assistance which is something that I do for all of my short sale clients. To view an article on TAP please click the following link: http://wp.me/p3kXsm-1BD
To view a copy of the Directive please click the following link: https://www.hmpadmin.com/portal/programs/docs/hamp_servicer/sd1404.pdf
If you or someone that you know is considering a short sale please have them contact Michael Gaddis of Michael Gaddis, J.D. Realty Group. Utilizing his skills in real estate, mortgages and the law, Michael Gaddis is an expert in short sales and the perfect advocate for anyone considering a short sale. Michael Gaddis can be reached at 760-692-5950 or by email at Michael@MichaelGaddis.com.