As part of The Administration's new plans last week, they've clarified what you can expect to happen if you are unable to make your HAMP trial plan payments and want to try a short sale.

The Home Affordable Foreclosure Alternative (HAFA) program, which includes short sales and deed-in-lieu of foreclosure, is available if you are generally eligible for HAMP but do not qualify for or complete a HAMP trial period plan.

Servicers are now eligible for additional incentive payments and you can even get up to $3,000 in borrower relocation assistance payments.

They hope this will encourage greater use of HAFA short-sales and deeds-in-lieu.

But I Keep Getting Foreclosure Notices. What's Up With That?
Foreclosure and loss mitigation are two separate processes handled by two different departments in most lenders and servicers.  And often, they don't talk with each other very well.

But new guideline put out last week should help this a little.

It clarifies lender contact requirements and defines "reasonable effort" on the part of the servicer to outreach to borrowers.

It encourages early intervention by requiring pro-active solicitation of all borrowers who meet HAMP eligibility profile and have missed two or more payments.

It establishes minimum solicitation requirements that include both phone and mail attempts.

Referral to foreclosure is prohibited until a borrower is evaluated and found ineligible for HAMP or reasonable contact efforts have failed.

Requires servicers to stop foreclosure actions after a borrower enters into a trial plan based on verified income.

Requires written certification that a borrower is not HAMP eligible before an attorney or trustee can conduct a foreclosure sale.

Establishes a 30-day borrower response period from the date of a non-approval notice during which foreclosure sale is prohibited.