HAMP, HAFA Help People Take Advantage of the Low Mortgage Rates

September 21, 2011 / Russell Legato, Residential Property Analyst

Mortgage rates have been holding steady lately.  Many ordinary people polled expect that to remain unchanged.  August New Home Starts were down more than expected.  This news probably won’t have much impact on the mortgage rates but today’s expected announcement about August existing home numbers may have an impact.

HAMP, HAFA Help People Take Advantage of the Low Mortgage Rates

According to realtor.com statistics the inventory level has seen a 19% decrease in the number of homes listed for sale compared to August 2010.  This is good news.  Also good to hear is an average of 2.63% increase in the listing price compared to last year.

Despite this encouraging news it seems that some government programs to help home owners who are in trouble aren’t working so smoothly.  One plan, the Home Affordable Foreclosure Alternatives (HAFA) has been used little.  It appears that this plan isn’t so appealing to the Banks as it only offers $1500 for each short sale.  The bank only gets the difference between the loan value and the sale price and it just isn’t enough in most cases to accept only $1500.

Another plan, Home Affordable Modification Program (HAMP) requires the home owner to have an income which often isn’t the case for those needing help.  These modifications are not appealing to the banks either as they have to recognize any loss associated with the modification when the loan is modified.  These plans are available but are not being utilized as the planners of these programs had hoped.

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