Alert May 19, 2009

Treasury and HUD Announce New Making Home Affordable Program Initiatives

Treasury and HUD announced a further expansion of the Making Home Affordable Program. In addition to incentivizing servicers to modify mortgages, the Program now offers incentives to services and borrowers for pursuing short sales and deeds-in-lieu of foreclosure in instances where a borrower cannot qualify for modification. In addition to this short-sale initiative, Treasury and HUD announced a new Home Price Decline Protection initiative aimed at providing creditors with additional incentives to modify loans in areas where home price declines are most severe. Under this new initiative, incentive payments are calculated by directly linking the payment amount to both the rate of home price declines in a local housing market and the average cost of a home in that market. Click here for a fact sheet on both new initiatives and here for an overall progress report produced by HUD and Treasury on the Making Home Affordable Program.