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Get Paid to Move Out of Your Home?

March 13, 2010

In an effort to end the foreclosure crisis, the Obama administration has been trying to keep defaulting owners in their homes. Now it will take a new approach: paying some of them to leave?

The new plan is called HAFA (Home Affordable Foreclosure Alternative) created to assist the more than five million households are behind on their mortgages and risk foreclosure. The government’s $75 billion mortgage modification plan has helped a few of them. Consumer advocates, economists and even some banking industry representatives say much more needs to be done.

Under the new program, the servicing bank, as with all modifications, will get $1,000. Another $1,000 can go toward a second loan, if there is one. And for the first time the government would give money to the distressed homeowners themselves. They will get $1,500 in “relocation assistance.”

Taking effect on April 5, the program could encourage hundreds of thousands of delinquent borrowers who have not been rescued by the loan modification program to shed their houses through a process known as a short sale.


  • Lenders taking a long time to accept
  • Not accepting short sale offers
  • Forgiving deficiency (Currently provide 1099) they will get the lender’s assurance that they will not later be sued for an unpaid mortgage balance.
  • Pulls down the value of neighboring homes
  • Banks that own these loans are in a position to block any sale unless they get a piece of the deal.


  • Streamline the process
  • The government intends to pay all parties as an incentive
  • Prospect of getting more money with a sale than with a foreclosure.
  • Suffering less damage to credit ratings. And as part of the transaction,
  • For communities, the plan will mean fewer empty foreclosed houses waiting to be sold by banks.
  • A lender will use real estate agents to determine the value of a home and thus the minimum to accept. This figure will not be shared with the owner, but if an offer comes in that is equal to or higher than this amount, the lender must take it.
2 Comments leave one →
  1. March 23, 2010 9:16 pm

    I need to discuss a short sale question. My home has been refinance with Modification program through the Obama administration with a 4.25% interest rate through Chase Mortgage. The home is in my daughters name, and my husband and I pay the mortgage and we all live in the home. A mortgage broker here in Chicago approached us with the ideal of a short sale option. He stated that the mortgage can be put in our name through a purchase from our daughter with and FHA loan as a short sale. He also indicated that Chase will take the current appraised value on the home and Chase will take the lost on the loan and our daughter will not be required to repay about $70,000 – 90,000 nor would this lost to Chase effect her credit and any other problems with Chase. Can you highlite us on this problem? Call me at
    708-769-0451 the sitution is a bite more indept, but this is the bases. Boy, you were hard to track down!! Hope to hear from you soon.

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