Wow! Talk about setting your sights low. Previous efforts at helping struggling homeowners were about foreclosure mitigation through mortgage modifications and schemes like that.
The newest program out of the Treasury is way less ambitious.
Housingwire: The Chief of the Homeowner Preservation Office at the Treasury, Laurie Maggiano, released information on the Home Affordable Foreclosure Alternatives (HAFA) while speaking at the MBA’s 96th Annual Convention going on in San Diego. The official launch is expected in the next week or so.
HAFA already holds the support of Fannie, according to a VP at the agency, Eric Schuppenhauer, who believes the new program allows borrowers in imminent default to “make a graceful exit” from their home. HAFA will keep the stigma associated with foreclosure away from the borrowers, he added, and help keep communities intact.
So this really doesn’t do anything, but somehow it will remove the stigma of foreclosure.
Maybe they could rename “foreclosure” to something kinder like “Voluntary Economic Home Separation.” But then, that’d be just changing words around, what would be the point of that? Oh wait.
Other additional incentives to the short sale industry are nearly developed. The IRS will soon offer a 4506EZ form that will enable servicers to pre-fill out the information so that it only requires a borrower’s signature. It also will include softer language so as not put potential participants off.
For what it’s worth, here’s the current form 4506, which allows a lender to obtain a client’s tax data. We’re not sure what language in it is so harsh that it needs to be softened. People must be really sensitive these days.