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Buying distressed properties may be getting quicker and easier for some Bonita Springs homes that qualify for the Loan Modification Program.  From April 5, 2010 through December 31, 2012, new rules may be elected by qualified homeowners under the Federal Making Homes Affordable Act.  This appears to be an effort to shorten the time period and simplify the hassles normally associated with closing on many of these distressed homes.

For short sale properties (homes that are worth less than the balance of the mortgage and the homeowner “qualifies”), the new process is essentially this:  the homeowner applies for a loan modification under HAMP; then requests a short sale under HAFA; enters into a short sale agreement with the loan servicer for a pre-approved net amount acceptable to “pay off” the loan; lists the home for sale as a potential short sale; and gets a contract from a buyer to purchase the property.  Unlike the current process that may take 3 to 6 months to get an approval or disapproval from the lender, a decision will be made within 10 business days.

This process can also be initiated by the loan servicer, offering the program to the homeowner.  If the homeowner agrees within 14 business days, a similar process can be followed to the conclusion of a short sale.

There are eligibility requirements for this accelerated form of process.  The home must be the primary residence of the homeowner; the amount owed must be less than $729,750; the homeowner must be struggling with the mortgage payments; the mortgage must have been initiated before 1/1/2009; and the mortgage payment (principal, interest, taxes, insurance, and HOA fees) must exceed 31% of the homeowner’s monthly income.

Similar new rules will apply to prevent a judicial foreclosure process, by offering a Deed in Lieu of Foreclosure program in certain situations. 

Because these new rules are new and complex, we highly recommend professional assistance in working through this process.  If you are a homeowner with an “upside down” situation on your primary residence, the Boeglin Team will be happy to meet with you to review your options.