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As foreclosure filings continue to be on the rise, despite reports of an improving economy, the government is discouraged by figures indicating that their mortgage loan modification programs aren't as effective as originally hoped.

To compensate, they're now encouraging short sales, in which the lender agrees to accept less than the balance owed as payment-in-full. Idaho short sales will now be the preferred option for homeowners who don't qualify for the Home Affordable Modification Program (HAMP), or for those who enroll in the Home Affordable Modification Program but fail to meet the modified payment arrangements during the trial period.

April 5th marks the beginning of yet another government plan: The Home Affordable Foreclosure Alternative Program, which isn't drastically different from short sale incentives offered in the past. Under this program, which runs through December 31, 2012, lenders are required to offer short sales as an option to homeowners within 30 days of a failed HAMP trial or failure to qualify for HAMP.

The Home Affordable Foreclosure Alternative Program will offer up to $1,500 to borrowers to help cover relocation costs, and a $1,000 incentive to lenders for each completed short sale.

While it sounds great, an abundance of Idaho short sales could mean longer escrow periods for buyers. Visit our Idaho short sale page to learn how the Idaho short sale process works.