No Bull Agent

Homeowner in Distress? The HAMP and HAFA Programs May Be for You.

Homeowners in distress continue to dominate the headlines.  The recent article “Home Prices in San Diego County Take a Breather” posted on SignOnSanDiego.com states, “The proportion of the resale market made up of homes foreclosed on in the prior 12 months slid last month, down to 28.4 percent, compared to 38.6 percent a year earlier, making it the lowest since November of 2007, according to DataQuick.”  Though this statistic shows the number decreasing, 28.4% is still a large percentage and varies from market to market.  Homeowners are looking for options and as of April 5, another became available.

The Home Affordable Foreclosure Alternatives Program (HAFA) provides an option for homeowners who are in danger of losing their homes through foreclosure under the Home Affordable Modification Program (HAMP).  For reference, HAMP is a loan modification program put in place to reduce monthly mortgage payments for delinquent or at-risk homeowners.  This original program was put in place for loans originated on or before January 1, 2009 and for borrowers who are at least 31 days delinquent.  The program is scheduled to end December 31, 2012.  So, HAFA is for homeowners who have taken advantage of HAMP and are still at risk of foreclosure.

According to Realtor.org, HAFA provides incentives through a short sale or deed-in-lieu of foreclosure to avoid foreclosure on a loan eligible for modification under HAMP. Read the rest of this entry »

Tags: borrower, california, distressed, HAFA, HAMP, home owner, kaplan, nobullagent, san diego

California Debt Relief Extended for Distressed Homeowners

Senate Bill 401, which was signed into law on April 12, provides help for distressed homeowners by waiving their California state income tax owed on debt forgiven in a foreclosure, short sale or loan modification.  This news will help many during this tax season as it could mean the difference between owing money and getting a state tax refund.  This law mirrors the federal exemption, but is different in that the federal is for indebtedness up to $2 million and the state is for indebtedness up to $800,000 and forgiven debt up to $500,000.

As we do not give tax and/or legal advice, it is important to contact an accountant or real estate attorney to determine whether you qualify.  The basics, however, as stated by the California Association of Realtors are that this bill is for debt forgiven on a loan secured by a “qualified principal residence.”  What is debt on a “qualified principal residence?”  It is defined as, “debt incurred in acquiring, constructing, or substantially improving a principal residence.  It includes both first and second trust deeds.  It also includes a refinance loan to the extent the funds were used to payoff a previous loan that would have qualified.”  These tax breaks will continue for three years as they “apply to debts discharged from 2009 through 2012.” Read the rest of this entry »

Tags: debt relief, distressed, home owner