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The Expanded Military Homeowners’ Assistance Program Of 2012
President Obama announced changes to the military homeowners’ assistance program 2011 (HAP) on the 6th of March, 2012. As per announcements made, amendments to the HAP, which is administered by the US Army Corps of Engineers (USACE), Department of Defense (DOD) and came into effect on the 18th of January, 2011, stands expanded to reach out to military homeowners whose homes have got wrongfully foreclosed. The American Recovery and Reinvestment Act of 2009 temporarily expanded the HAP for assisting military homeowners in recovering some financial losses incurred due to sale of homes on account of closure of a base or realignment of duty. It has been estimated that about 20,000 military service members have lost homes to foreclosures. The amendments will benefit them.
Obama’s military housing help initiative of 2012 seeks to address issues related to foreclosures of homes owned by service members or veterans. Accordingly, an agreement has been reached with lenders to review cases where homeowners have been denied low home refinancing rates and consequently, their homes were foreclosed resulting in direct violation of the Service members Civil Relief Act (SCRA). The proposed changes will require mortgage servicers to determine legality of such home foreclosures.
Under the changed rules and regulations that apply to the military homeowner assistance program, if any home owned by a military service member or veteran has been wrongfully foreclosed, the lender is required to compensate the borrower by paying the lost home equity as well as an additional $ 116,785. The federal government arrived at the figures in consultation with major mortgage loan dealers in the U.S. and the attorney generals of 49 states.
Furthermore, lenders will also review such cases wherein borrowers, whose home values had declined, were forced to sell their homes on account of a military reassignment.
More About The Military Home Assistance Program Expansion
The recent expansion of the homeowners’ assistance program military will benefit even those families of military men, who have been either wounded or killed during deployment in course of national duty. For achieving this, a stimulus package of $ 555 million is in place. To all eligible applicants, the HAP plan of 2012 will provide the below mentioned benefits.
- Portion of loss incurred during sale of homes would be reimbursed.
- If the full cost of the mortgage is not recovered by selling of the home, financial help will be provided.
- Borrower can buy the home by totally getting rid of the existing mortgage loan.
- Receive government support in case of foreclosure or any mortgage payment default.
However, it could be important to note that all these benefits are subject to taxes as required by laws applicable under the American Recovery and Reinvestment Act (ARRA) of February 2009 which is in turn responsible for the temporary expansion of the HAP program. As a result, home makers, who qualify for military PCS housing assistance, will be taxed for any income which is over and above the fair current market prices of their primary residential homes, which were sold off on account of Permanently Changed Stations (PCS) orders, due to injury or death of the service member. And the taxable amount will vary according to the gross income of the service member as well.
Eligibility Guidelines For Assistance With Military Housing Program
To be eligible to receive the benefits of the ARRA expanded army housing assistance program of 2012, borrowers need to meet the following requirements.
- Applicant should be in active service of the United States military.
- PCS orders must have been issued from 1st February 2006 to 30th September, 2010.
- Borrower needs to have bought the home before 1st July 2006 and sold it after this date.
- Price of homes in city or county should have declined by 10%.
- Values of individual properties should have declined by 10%.
- The military HAP plan is a onetime benefit, cannot apply for 2nd time.
- Home under consideration has to be the service member’s primary residence.
- Military member should have moved at least 50 miles from duty station and home under PCS orders.
- Applicants should have been active service men before the home was purchased.
- In the case of retired personnel, only mandatory retirements will be considered.
It is to be noted that the ARRA expanded military HAP program will not make any reimbursements for 2nd mortgages, if any, that were non-existent at the time of purchase of the home. Therefore, home equity loans or lines of credit obtained for carrying out renovations in the home after it was bought will not be eligible to get federal assistance. Besides, determining of reimbursement for private home sale will involve certain calculations. Hence, a competent mortgage professional may prove to be a valuable guide for securing more information regarding the government assistance schedule for helping home owners with military background.
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