The Obama Adminsitration has announced its new Foreclosure Alternatives Program (FAP).  This new program may be advantageous for those borrowers who are unable to retain their home unter the Making Home Affordable Loan Modification Program.  With the  FAP program, the sevicer may consider a short sale or, if that is not successful, a deed-in-lieu of foreclosure.  Late July is the Tresury Departments current target for issuing guidelines and forms necessary to start the program.

Borrowers/homeowners qualify under the FAP if they meet minimum eligibility requirements for the Home Affordable Modification program but don’t qualify for a modification or do not successfully complete the trree month trial period.  Before proceeding with a foreclosure, the servicer must determine if a short sale is appropriate.

The program will include streamlined and standardized documents, including a Short Sale Agreement and an Offer Acceptance Letter.  The goal is to make it easier to use the short sale option.

Under the Short Sale Agreement, servicers must give borrowers/homeowners at least 90 days to market and sell the property, or up to one year, depending on market conditions.  The property must be listed with a licensed real estate professional with experience in the neighborhood.  No foreclosure may take place during the marketing period (at least 90 days) specified in the Short Sale Agreement.

If you need additional information regarding short sales, please feel free to contact me via email or phone.