On May 14, 2009, the Treasury and the Department of Housing and Urban Development announced updates to the Making Home Affordable Program. These updates detail Foreclosure Alternatives Incentives and Home Price Decline Protection Incentives.
Foreclosure Alternative Program. The Foreclosure Alternative Program provides incentives to mortgage servicers to pursue short sales of homes or deeds in lieu of foreclosure. In either case, the incentives are aimed at helping homeowners who can no longer afford to stay in their homes by allowing them to avoid foreclosure and relocate to a home that they can afford.
The updates indicate that homeowners who satisfied the minimum eligibility requirements for a modification under the Program but who could not qualify for a modification will be eligible for the Foreclosure Alternative Program. For example, a homeowner may meet all eligibility requirements yet the servicer determined that the borrower would not be able make payments on a loan as modified under the Program; in this case, the homeowner may be eligible for the foreclosure alternative. Further, homeowners who received a modification but who were unable to sustain payments under that modification will be eligible for the Foreclosure Alternative Program.