Foreclosure Councelors: What They Can and Can't Do

Foreclosure Counselors: What They Can and Can’t Do

Foreclosure counselors can make the difference between losing your home and keeping it.

Here’s how they work and how to choose one.
A foreclosure counselor can help assess your finances and make a budget, but cannot give any tax or legal advice.

If you’re facing foreclosure, your foreclosure counselor will be a key part of your foreclosure team. As you start looking for one, however, you need to know what exactly they do, what they don’t do, and how to choose one who’s legitimate and qualified.

What a foreclosure counselor does:
Reviews your finances
Helps you establish a budget
Explains your non-foreclosure options, such as

loan modification, short sale or deed in lieu of foreclosure;

helps you navigate the process with any chosen option
Advocates on your behalf with lenders and loan servicers.

Counselors should also be upfront about discussing their

own track records as well as the track records of the agency they work for.

Read more: http://www.houselogic.com/articles/foreclosure-counselors-what-they-can-and-cant-do/#ixzz0vqTnqRA2

Expect to spend two to 24 hours with a counselor, depending on the complexity of your foreclosure situation, including how many lenders you have to provide documentation to and negotiate with.“Be sure the counselor is looking at your entire situation,” and not just your foreclosure, adds Martha Viramontes, director of housing at ClearPoint Credit Counseling Solutions in Los Angeles. “When counselors focus only on your mortgage, they’re fixing only one aspect of your financial situation.” They should give you an action plan containing the tasks you are going to perform to change your financial situation.

What a foreclosure counselor doesn’t do:
Give tax advice
Give legal advice
Give guarantees regarding a particular outcome
Create miracles

For additional advice, add a tax adviser and attorney to your team. Finally, “don’t expect a counselor to be a genie,” says Douglas Robinson, a spokesperson for NeighborWorks America, a nonprofit community development corporation in Washington, D.C., that provides foreclosure counseling. “If you’re in a home that under the most aggressive scenario you can’t afford, but maybe you got into it because of some toxic loan that should never have been available in the first place, you’re probably going to have to move. It’s best you get out smoothly.”

How to choose an agency:
Seek only HUD-approved agencies. HUD makes it easy:

Type in your state or ZIP code at http://www.findaforeclosurecounselor.org/

or call HUD’s foreclosure counseling hotline at 800-569-4287

or its foreclosure prevention hotline at: 888-995-HOPE (4673).

HUD-approved agencies are all nonprofit, community-based organizations that have administered a housing counseling program for at least a year.

HUD-approved agencies also are required to:
Employ counselors who are knowledgeable about federal housing programs.
Have a staff of counselors of which at least half must have two or more years of counseling experience.

At least half must also have received housing counseling training in the past two years.
Provide you with certain documents, such as a privacy agreement explaining how your personal information will be handled.

In addition, at the agency you work with, see if you can find a foreclosure counselor who has certification through the NeighborWorks Center for Homeownership Education and Counseling Look (NCHEC), which has a Foreclosure Intervention and Default Certification Program. Certified counselors must follow NeighborWorks counseling standards and code of ethics and conduct.

They also are required to:
Have at least one year of experience in foreclosure counseling
Attend three foreclosure prevention courses

Check out my website at: http://www.callkim.net/

Kim Duclos Coldwell Banker Wardley (888) 949-2890

Home Affordable Foreclosure Alternatives (HAFA)

On June 1, 2010, Fannie Mae began its own Home Affordable Foreclosure Alternatives (HAFA) Program, which is designed to mitigate the impact of foreclosures on borrowers who are eligible for a loan modification under the Home Affordable Modification Program (HAMP) but ultimately did not complete a modification. The Government is trying to push forward to facilitate a short sale for borrowers that have slipped through the cracks with the modification process. I am hoping that this will be a more positive process with the HAFA short sales, then the ones we are working with in the current market. Buyers will have to seek professional advice as to what tax ramifications they will face and if they will be held responsible for any partial payment as a consequence of the sale.

Program Features

The Fannie Mae Home Affordable Foreclosure Alternatives (HAFA) program simplifies and streamlines the use of short or “preforeclosure” sale and deed-in-lieu of foreclosure (DIL) options by incorporating the following unique features:

Complements HAMP by providing alternatives for borrowers who are HAMP eligible (including borrowers facing imminent default);

1. Utilizes verified borrower financial and hardship information collected in conjunction with HAMP, eliminating the need for additional eligibility analysis;
2. Allows the borrower to receive pre-approved short sale terms prior to the property listing;
3. Prohibits the servicer from requiring, as a condition of approving the short sale, a reduction in the real estate commission agreed upon in the listing agreement;
4. Releases the successful HAFA borrower from future liability for the debt;
5. Uses standard processes, documents, and timeframes; and
6. Provides financial incentives to borrowers, servicers and subordinate lienholders.

The effective date for the implementation of the Fannie Mae HAFA is August 1, 2010; however, servicers are encouraged to adapt their processes to implement these policies and procedures immediately.

Complete program details for the Fannie Mae HAFA can be found here. Additionally, new servicer and borrower materials have been developed to support and facilitate the implementation of the program. All materials – including a program overview and job aid, as well as the required borrower documentation – are available on the new HAFA page on eFannieMae.com.

Please Call me for all of your Real Estate Needs.

(888) 949-2890 http://www.callkim.net/ kim.duclos@coldwellbanker.com