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Here is the latest short sale news at Seattle Short Sales. We assist hundreds of Seattle area homeowners with short selling their home and avoiding foreclosure.

J.P. Morgan Chase Overcharged 4,500 Military Members, Wrongfully Foreclosed on 18

Seattle Short Sales - Monday, March 07, 2011

J.P. Morgan Chase has apologized for overcharging 4,500 active-service military members on their mortgages, and for wrongfully foreclosing on 18 of them. But for California Rep. Bob Filner, an apology is not enough. “Everything is impersonal. Nobody is ever responsible and yet these people’s lives were turned upside down.”

This story was reported last month by the Wall Street Journal. The report indicates that a spokesperson for the lender has acknowledged that they did not comply with the law, and that they are embarrassed about the incident.

The Servicemembers Civil Relief Act, or SCRA, is a federal law that protects soldiers, sailors, airmen and Marines from being sued - both when in active service, and for up to a year afterward. The origins of the act date back to the Civil War; the law was redrafted under its current title in the 1940s.

Two of the results of this act, for servicemembers who fall under its protection, are that interest rates are capped, and foreclosures cannot take place.

Chase’s error was discovered partly because a U.S. Marine Corps captain who felt that he had been overcharged on his mortgage filed a lawsuit against the lender. The lawmakers who participated in this hearing expressed their concerns that, although this problem was discovered with this one lender, it may also occur with many other lenders - and that other military personnel may also be being overcharged or threatened with having their homes taken away.

If you are a homeowner, and would like to learn more about short selling your home, please go to: http://seattleshortsales.com/homeowners/

If you are a real estate agent, and would like to learn about our no-fee short sale service, please go to: http://seattleshortsales.com/agents/

HAP Homeowners Assistance Program: An Option for Military Homeowners with Negative Home Equity

Seattle Short Sales - Monday, September 20, 2010

The Department of Defense’s Homeowner’s Assistance Program (HAP) was originally designed for members of the American military who are affected by Base Realignment and Closure (BRAC). Announcement of a base closure could cause a drop in local house prices, forcing military members to take a loss on their home sale. The HAP program is authorized in Section 1013 of the Demonstration Cities and Metropolitan Development Act of 1966 (as amended), to provide financial assistance to eligible federal personnel - including military, Coast Guard, and some civilian - who are faced with losses on the sale of their home as a result of a BRAC move.

The government’s economic stimulus package, through the American Recovery and Reinvestment Act of 2009, modified the plan to what is known as “Expanded HAP”. The new “Expanded HAP” makes more military members and civilians eligible for assistance by including those undergoing a Permanent Change of Station (PCS) move. It also removes the requirement to prove that the house price decline was a result of the BRAC announcement.

The HAP program helps military members to sell their home and make their move, without having to go to their lenders to try to have a short sale approved.

Eligibility:
The new Expanded HAP program is open to:
- Wounded members of the Armed Forces (30% or greater disability) and wounded Department of Defense (DoD) and Coast Guard civilian homeowners reassigned in furtherance of medical treatment or rehabilitation or due to medical retirement in connection with their disability,
- Surviving spouses of the fallen,
- Base Realignment and Closure (BRAC) 2005 impacted homeowners relocating during the mortgage crisis, and
- Service member homeowners undergoing Permanent Change of Station (PCS) moves during the mortgage crisis.

Who can apply:
The HAP program is undergoing on-going amendments, as the government works towards finding ways to help distressed military homeowners in the current unpredictable and changing economic climate. It is best to contact HAP directly (contact details below) to get advice specific to individual situations.

General guidelines to qualify for HAP assistance for those applying as a result of a PCS move are:
- they must be active-duty military personnel
- the PCS move must be greater than 50 miles, with PCS orders dated between February 1, 2006, and September 30, 2010 (closing date is subject to availability of funds)
- the home must have been their primary residence at the time the move was announced
- county, parish and city home values must have dropped by at least 10% between July 1, 2006, and the HAP application date; and the individual home value also must have dropped by 10% between the date of purchase and date of sale.

Current regulations are that the home must have been under contract to purchase prior to July 1, 2006. Many military members purchased their homes just after this cut-off date, and an amendment under discussion may open the program to homeowners who purchased after this date.

Guidelines for applicants eligible as Wounded, Injured or Ill and Surviving Spouses are slightly different, e.g. the requirement to purchase the primary residence prior to July 1, 2006 does not apply.

Benefits:
HAP provides assistance to military homeowners faced with selling their home at a loss in a number of different ways. The exact ways that HAP may help depend upon which eligibilty requirements the homeowner applies under. For those who are applying as a result of a PCS move, HAP may help by:
- if foreclosure is taking place, providing financial assistance after foreclosure by paying some of the expenses,
- if a private sale is taking place at a loss, reimbursing 90% of the difference between the purchase price and the sale price, plus closing costs,
- if a home sale cannot be negotiated within 120 days, purchasing the home directly by paying either 75% of the purchase price or by paying out the mortgage, whichever is greater (HAP will not reimburse or pay out second mortgages).

How to apply:
Contact your nearest HAP office or visit the HAP website from application forms. A complete HAP application package must include:
- Form HUD-1 - proof of home purchase
- Proof of ownership - copy of deed
- proof of occupancy at time of receipt of PCS orders (e.g. utility bill)
- proof of program eligibility

Important things to know when applying for HAP:
1. You must be actively marketing your home, and seeking to sell it at Fair Market Value.
2. HAP does not reimburse the full negative value of your property, but a percentage that ranges between 75% and 95% of that negative value.
3. HAP applications are processed in chronological order that the completed applications are received. Incomplete applications will be ignored until all documents are in order, so it is very important to make sure that your application is complete. Order of processing priority is by eligibility: (1) Wounded Injured Ill and Surviving Spouse, (2) BRAC 05 moves, (3) PCS moves.
4. A member may receive benefits only once through this program.
5. As of November, 2009, HAP benefits are no longer taxable.

Resources:
HAP website: www.hq.usace.army.mil/hap/
DoD HAP National Hotline: 1-888-363-4271
General HAP brochure: http://hap.usace.army.mil/Documents/Conventional_HAP_final.pdf
Expanded HAP info brochure: http://hap.usace.army.mil/Documents/HAP_Expansion_23April2010.pdf
Online discussion forum: http://www.moresam.net/Forum/afv/topic/aff/7/aft/301/afpg/1.aspx

If you are a homeowner, and would like to learn more about short selling your home, please go to: http://seattleshortsales.com/homeowners/

If you are a real estate agent, and would like to learn about our no-fee short sale service, please go to: http://seattleshortsales.com/agents/


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