$3k to Move Out...How Does it Work?

[mickeyme]

I just read an article on MSN about the Obama plan offering $3K to borrowers who put their home through a short sale rather then waiting for foreclosure.

Does anyone know how this works? Or where I might be able to get some information?

Thanks...MickeyMe

[StartingOver08]

Call your lender. Different programs for different lenders offering different amounts. For example Wachovia offers a special program called their Voluntary HomeTransfer program where Wachovia will pay the seller $15,000 if you short sale the property at an approved price within 120 days. If the home does not sell, then they will give you $3,000 in their in their Direct Transfer Option (normally known as a Deed in Lieu). Naturally there are conditions for each of the options, but the conditions are reasonable and Wachovia is very efficient with this program.

EMC has a program, but not as generous as Wachovia's.

You just call your lender, speak to the Loss Mitgation dept and have them send you their program details in writing.

[HHM]

The cash for keys is very hit or miss. Some banks do it, most don't. Also, most banks will only do it if the property is desirable in some way. (good location, good condition, could sell relatively quickly etc). Bottom line, banks don't have to do cash for keys.

[bkstuff]

hmmmm, wonder if BOA does this? Can they do this even if there is a 2nd mortgage with another lender? (home under water on first)

[HHM]

hmmmm, wonder if BOA does this? Can they do this even if there is a 2nd mortgage with another lender? (home under water on first)

Unfortunately, no. The lender then NEEDS the foreclosure process to kill off the 2nd mortgage.

[mickeyme]

Thanks for the input. I do have a 2nd so sounds like it won't work for me. I guess it wouldn't hurt to still ask the bank. Our place is in a good location and is in "move in ready" condition but all the places around me have been sitting on the market.
If I do ask the bank at what point would be the best time? I would want to get the most time in my place as possible, but if I wait for the NOD or NOS to be file do you know if that would be too late?
Thanks again for the input.

[jlmaca]

I just read an article on MSN about the Obama plan offering $3K to borrowers who put their home through a short sale rather then waiting for foreclosure.

Does anyone know how this works? Or where I might be able to get some information?

Thanks...MickeyMe

You might be referring to the HAFA (Home Affordable Foreclosure Alternatives Program). To qualify you must be turned down for HAMP. I applied for HAFA for short sale 3 weeks ago and the bank just sent out an appraiser. The HAFA program is rather difficult (over 45 pages of governmental paperwork). But I figured since I'm loosing the home to foreclosure anyway I might as well see if I qualify and can get the $3k. Call your bank and ask the about HAFA, if they participate they will send you a package. Fannie and Freddie loans do not qualify under any circumstances.

[bkw1nter]

Hey jlmaca,

How is this working out for you... just curious as I am in the same situation....

[jlmaca]

Hey jlmaca,

How is this working out for you... just curious as I am in the same situation....

I might know more today after I call my servicer, but as of now I have not been "officially" accepted into the program. After they received the initial request by me, they sent out an appraiser who met with my real estate agent to get a realistic selling price. That went well but that's the last I heard anything from the servicer. My agent said ultimately don't worry about the program because if they receive a good short sale offer they will probably offer you cash for keys even if you are not in the HAFA program. This is all speculation at this point. My agent also said the market is getting trashed again because of so many more foreclosures coming into the market which makes it even more difficult to sell a property. I live here rent free so I shouldn't complain. I owed $350k and it's on the market for $200k with no offers yet. Unreal.

[mickeyme]

Update - I called my first, GMAC, who confirmed what was already said in the post in regards to qualifying for a Deed in Lieu...we need to apply for loan mod and then miss payments. We have applied and were denied. They did say that if our place is on the market for 3 months with no offers then they may consider a Died in Lieu as long as my 2nd agrees; which my 2nd has said they would. (of course they tell me this after I have missed 3 payments) So my place has been on the market approx 4 weeks. In the mean time we have rcvd a NOD so at this point we are just waiting to see what happens first, FC or Died in Lieu. I am going to push for cash for keys...though I really don't think it is going to work. In the meantime I am hoping the short sale may delay the FC processthat way we can live rent free for just a few more months.

I will post another update if things change