Obamaâ€™s MHA Mod Plan to Include Short Sales
December 2, 2009 - Short sales have become the newest addition to the Obama administration's $75 billion foreclosure-deterrence agenda, expectantly making it easier for some financially uneasy borrowers to sell their homes.
The short sale program will allow borrowers to receive an incentive compensation of $1500 if their sale nets less than their mortgage amounts. In return, mortgage-servicing companies will receive $1000 for each successful completion of a short sale. These incentive payments are available to borrowers who meet the minimum eligibility for the MHA modification, but were either unable to qualify or were delinquent in their trial period payments.
Furthermore, the government is looking to implement a more streamlined and standardized method of documentation for those seeking to sell. As the U.S. Department of the Treasury points out, "These documents will outline specific marketing terms, describe the rights and responsibilities of all parties and establish clear timeframes for performances."
Borrowers will have a minimum of 90 days to market and sell their home through a licensed realtor. Additionally, the maximum marketing period for the property will be one year to ensure that borrowers and servicers move quickly. During this process, all borrowers can trust that they will not be receiving any Foreclosure Alternative program participation fees from their mortgage provider.
The program's current expiration date is set at December 31, 2012, where according to the Treasury, "payments will only be received upon a successful completion of a short sale or a deed-in-lieu (DIL)."