Industry NewsMortgage

Feds get behind short sales

Making Home Affordable program expanded

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The Obama administration will encourage troubled borrowers who don't qualify for loan modifications or can't keep up payments on a modified loan to pursue a short sale or deed their property to their lender in order to avoid foreclosure. While the main thrust of the administration's Making Home Affordable initiative remains loan modifications and refinancings, the program is being updated to provide incentives for borrowers and loan servicers to engage in short sales and deeds-in-lieu of foreclosure. Borrowers -- who must meet the minimum eligibility requirements for a Home Affordable modification -- will receive up to $1,500 to assist with their relocation expenses when they agree to a short sale or deed-in-lieu of foreclosure. Loan servicers will earn up to $1,000 for successfully completing a short sale or deed-in-lieu. In addition to incentives, the program establishes a standard process, minimum performance timeframes and standard documentation for short sales and de...