Real Estate Blog

The Home Affordable Foreclosure Alternatives (HAFA) program will launch on April 5, 2010, and everyone from asset management companies to software providers are rushing new products to the front lines.

HousingWire broke the story on HAFA in October when the US Treasury Department announced the program. HAFA was designed to provide incentives to servicers that provide short sales and deeds-in-lieu of foreclosures to borrowers who do not qualify for a loan modification through the Home Affordable Modification Program (HAMP). The Treasury aims to help 3-to-4m borrowers through HAMP, which launched in March 2009. Through January 2010, participating servicers provided 116,000 permanent modifications.

Laurie Maggiano, the Chief of the Homeowner Preservation Office at the Treasury, told HousingWire that there are no current estimates for how many borrowers will receive a short sale through HAFA because of there are so many external factors to consider.

With documentation difficulties slowing progress in HAMP, servicers are gearing up for the wave of short sale inquiries on the way in April. MOS Group, a loss mitigation service provider, provides support through a HAFA team that will reach out to borrowers in the mandatory 30 days after a HAMP modification rejection.

“In a situation like this, where the borrower has been declined a loan modification, it’s imperative to communicate and follow up with the borrower quickly and effectively, as this first conversation can often mean the difference between a successful short sale transaction and one that falls into foreclosure,” said Greg Hebner, president of MOS Group.

Equator, which in its prior lift as REOTrans became the largest vendor management platform used by real estate owned (REO) departments across the country, released an agent-initiated short sale feature that allows real estate professionals to directly request a short sale on behalf of a client.

Lenders can enable the agent-initiated feature within the Equator network platform, which the firm says will help lower call volumes and connect the decision makers quicker.

“Traditionally, requesting a short sale meant borrowers had to call their lender, which was often a time-consuming process,” says Chris Saitta, CEO of Equator. “Now agents can now provide the additional service of requesting a short sale directly through Equator. This makes it easier for the borrower, and speeds up the process considerably.”

Chrisley Asset Management (CAM), the default manager, will provide short sale and loan modification services to lenders. CAM will work as a liaison between the borrower and the lender or servicer. When pursuing a short sale or a loan modification, brokers, attorneys and even the borrowers complain of a lack of communication.

Rasheeda Shears of CAM said that not only would borrowers and agents be able to communicate with a CAM liaison to get word back from the banks, but it would be the same representative for each account.

Even online auction sites are getting into the HAFA rush. REA Accelerated Marketing Group, a California-based online real estate bidding platform, formed a partnership with the short-sale technology provider National Quick Sale to “broaden the exposure” of short sale listings and complete more transactions.

“Short Sales are a great alternative to foreclosures, but without a comprehensive automation solution many servicers have simply avoided them,” Equator’s Saitta said.

Write to Jon Prior.

March 1, 2010
CONTACT: Everett Wilkinson
561-880-5790
Everett@southfloridateaparty.org

The Tea Party Movement has consistently been about making Washington hear our demand for fiscal discipline and protection of the nation's economic security. Today, here in Florida, we have a new way to make this message clear.

Today, Senate President Jeff Atwater, introduced Senate Resolution 10 (SR 10) which will reinstate Florida's support for our right to demand a Balanced Budget Amendment to the U.S. Constitution.

Since Washington won't do what is best for this country, it's time for those of us who are patriots to protect America.

"If Washington won't balance its budget, then it is time" says Everett Wilkinson, South Florida Tea Party, "We The People force them to balance the budget."

You can find listings of all members of the Florida Legislature(Senate and House). Call, write or email and tell them YES to SR 10 -- Here is a link to the Florida Legislature website

YES to a federal Balanced Budget Amendment!

Also visit balanceourbudgetnow.com for more information and to encourage other State legislators to do the same!

If you visit the website for Lower Taxes Now - www.lowertaxesnow.org - you will see the mission statement and most likely determine right away that this is a valid and worthy cause.

"TO PROMOTE GREATER GOVERNMENT EFFICIENCY IN AN EFFORT TO IMPROVE OUR ECONOMY AND THE QUALITY OF LIFE FOR FLORIDIANS."

But if for some reason you are not convinced so easily, perhaps a peek at some of the data might persuade you. Now organizing in Palm Beach County, Lower Taxes Now will bring its own special method of exposing where all the money goes and providing a platform for ordinary citizens to interact with government to prioritize spending and debt.

Please visit our new website at http://pbctaxreform.ning.com/ 

Join as a member, read the blogs, contribute a story, help us organize our new board and tell your friends. There are links to websites (like www.MyFloridaCFO.com )where you can access reports showing where your tax dollars are going, how much elected officials make compared to the private sector, how much taxes have gone up over time in your city, how much debt your city and county has and so much more. 

Lower Taxes Now has no party affiliation whatsoever and is in fact made up of members of just about every political party. Our mission statement applies equally to all elected officials of every political party. 

As every level of government balloons in size all around us, ordinary citizens are losing more and more of their freedom and liberty. We are now called upon to do our patriotic duty and push back against this intrusion into our lives. 

Chase is approved by the Treasury Department to offer the Home Affordable Modification Plan.  One provision of this federally subsidized program allows for part of a loan's principal balance to be forgiven.  A Chase loan modification that features a reduction in the principal balance is offered to some homeowners-but who qualifies for this very important feature and why?  The $75 billion dollars set aside to help homeowners find loan workout solutions serves to encourage Countrywide and other banks to offer very aggressive options.  Homeowners who are struggling with unaffordable mortgage payments and now owe more than their home is worth need to know if they qualify for this loan modification option.  Here is some helpful information about who could qualify.

Chase has signed an agreement with the Treasury Department in which they:

1. Agree to standard modification terms in return for incentive payments
2. Reduction in interest rates to as low as 2%
3. Principal reductions for certain loans
4. Extend loan terms to 40 years
5. Waive late fees, administration charges, bring the loan current
6. Perform a Net Price Value scenario to determine principal reduction option-homes that have realized signifcant loss of value may qualify
7. Reach out to at risk homeowners to offer a loan workout

This article is by James Lincoln and is reprinted from Posted: Oct 08, 2009

1. Step 1

   Do you owe more than your home is worth? Did you know you can reduce your principal balance to current market value with a Principal Reduction Program? Even is you have bad or no credit, behind in payments, or in foreclosure without needing to go through the hassle of a Loan Modification?
   When first hearing about Atlantic Mutual's Principal Reduction Program, most homeowners simply ask, "What is Principal Reduction all about?" Our Principal Reduction Program (Often referred to as "PRP" or "Principal Reduction Loan") In the simplest terms, It's when a bank reduces the balance on your mortgage either through a loan modification process whereby the loan stays with your existing lender, or by your lender agreeing to a "Short Refinance" in which a new lender buys your note at a discount, usually at market value. Our Principal Reduction Program is designed to help people who owe more than their house is worth. It's a "Property Relief" program for people that are "upside down" in their mortgage (negative equity), meaning the property is worth less than their current mortgage.

2. Step 2

   Through the Principal Reduction Program, we at Atlantic Mutual work with several lenders and hedge funds to purchase your current mortgage at a discounted rate in order to replace it with a new, better mortgage. The Principal Reduction Program offers you the following benefits:
   • A new mortgage with a principal balance set at the current market value of your home
   • A fixed interest rate of prime + 3% for the 30 year term of
   your loan (currently, at 6.25%) Any loan amount qualifies
   • Primary and secondary residences can enter the program
   • Will accept first and second mortgages, along with HELOCs
   • Credit reporting of your current mortgage as "payment in full"
   • No closing costs associated with your new loan.
   • NO CREDIT REQUIRMENTS
   
   A Principal Reduction Program works to lower the principal mortgage amount on your home to match the true current value.

3. Step 3

   But, why would your bank agree to a PRP? Because your bank can now utilize U.S. Government TARP funds (Troubled Asset Relief Program) to help recoup their losses after agreeing to reduce a homeowner's mortgage amount. The Troubled Asset Relief Program (TARP) is a program of the United States created to purchase assets and equity from financial institutions to strengthen the financial sector; it is the largest component of the government's measures in 2008 to address the subprime mortgage crisis.

4. Step 4

   Our Principal Reduction Program is similar to the popular "Cash for Clunkers" automobile program in the sense that it was designed to help boost the economy by introducing new money into the private sector. Through the Principle Reduction Program your current lender is being reimbursed for 80% to 85% of their loss from TARP funds. They can write off the rest and take what would have likely become a problem loan off the books. This improves their balance sheet, gives them new money to lend, and will eventually increase their stock price.
   
   For example (see below), you may have a mortgage for $250,000 on a home worth only $150,000, and the monthly payment is $1458.93. A successful PRP would reduce the mortgage to $150,000, exactly what the home is worth, as well as lower your monthly payment to $923.58, a savings of $535.35!
   Value of Home Principal Balance Interest Rate Monthly Payment
   Current Loan $150,000 $250,000 5.75% 1458.93
   New Loan $150,000 $150,000 6.25% 923.58
   
   
   The current mortgage is paid off through principal reduction negotiations with your current lender, and a new mortgage is written at prime plus 3% for a new 30-year fixed note (currently, this would be 6.25% fixed) with a new lender. The Principal Reduction Program doesn't have any negative effect on one's credit rating as it will show the existing mortgage as paid off in full. The resulting new loan from the PRP is 100% LTV (loan to value) of the current fair market value of what the property is truly worth. There are no closing costs or mortgage insurance!

5. Step 5

   HOW DOES THE PROCESS WORK?
   
   
   The process starts with Atlantic Mutual getting you qualified for the program: gathering all the required documentation, requesting the broker price opinion, and submitting the documentation to your new lender. They take your paperwork, review it for accuracy, and make sure that all of the qualifications are met. After a preliminary review, your file is submitted to the lender's attorney group for review as well.
   
   Our group begins bargaining with the lender to purchase the loans, including yours and works with the lender to get access to TARP funds. Your lender must submit a formal request to the Federal Government for the TARP funds to reimburse them for 80% of the amount they are giving up in reducing your principal. Once they are notified that the funds have been secured, your lender can agree to the lower payoff amount.
   
   Your new lender now has the servicing rights to your loan and can finance a new loan at current market value for you. To do so, a new mortgage is written at the market value, and a closing date is chosen. Normal wait time for a closing is now 30-45 days. While there are no closing costs involved, your new lender still has to do all the normal due diligence involved in writing a mortgage including a title search to make sure there is clean title.
   
   For more information, please go to: www.principal-reduction-program.com, www.atlantic-mutual.com, or call 888-850-6772 to speak to one of our Financial Analysts. We can also be reached via email at info@atlantic-mutual.com

Here’s why you can't let a new tax get a toe-in-the-door, such as a new tax for TriRail. A new tax always starts small but becomes big - - - examples are the Health Care District, the Children’s Services Council, the South Florida Water Management District, and U.S. Social Security:

The game has changed and 'we the people' no longer have the power to control the spending of our elected officials. Here in Palm Beach County, FL, we have had rampant over development and over taxation where every government agency doubled or tripled it's revenue based on artificially inflated housing values over the past decade. 

Only now, after several years of declining real estate values, have we begun to see any pull back. And any minimal cuts these agencies make are done with great reluctance.  So the bottom has fallen out of the wider economy, but governments are putting their foot on the gas.

How does this make any sense if the people who have to pay for their government through fees and taxes are broke?

Many government sympathizers will argue that governments have to fill the void and keep money flowing when the private sector pulls back. And that all those government jobs need to be saved.  But in reality, government jobs are not productive. They are the dead wood of society. The private sector produces revenue for government and therefore, the private sector should lead. If the private sector pulls back, governments automatically should.

If you lose your job or your pay gets cut, you don't spend all your savings and then charge up the credit cards. Sure, some do out of necessity. But it is not wise. And yet this is exactly what our government is doing. Every level from your local police department right on up to the federal level. 'They' are not conceding that they need to cut back. Way back. And they need to get out of the way. Instead, they are doing the opposite. More fees, more taxes, more regulation and more interference in our day to day lives. Because that is how they make money - on our backs. Sort of like the Mafia. And it feels like a shake down too. Doesn't it?

If you lost your job and now you are losing your home to foreclosure, the city still wants to fine you for an overgrown lawn or peeling paint. And chances are, that same municipality has been over charging you for property taxes for about 10 years already, heaping on the mortgage and insurance scam that has emptied your pockets in the first place. When is it ever going to be enough?  Oh but we have to save the fat cat's job in the marble-lined city hall that we borrowed money to build....

The spending attitudes of elected officials have to change if we are going to strengthen our crumbling foundation and start to rebuild a sustainable economic future. Where do we start? Since we can't seem to elect people who don't become corrupted by the money and power, we have to start at home. Don't feed the monster and he won't be able to grow.