Making Home Affordable - 2011 - 1st QTR Update

8/7/2019 Making Home Affordable - 2011 - 1st QTR Update

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Jannuary2011lMakingHomeAffordable

MakingHomeAffordable

Overview of Programs


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2Jannuary2011lMakingHomeAffordable

WhattoExpect

Thispresentationwill:

ProvideanoverviewofMakingHomeAffordable

(MHA)anditsvariouscomponents.

Showyouhowandwheretogetmore

informationabout

the

programs

reviewed

today.

Identifyresourcesinplacetohelpyou.

Overviewof

MHAPrograms


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MakingHomeAffordableOffersHelp

HomeAffordableModificationProgram(HAMP)

Home

Affordable

Unemployment

Program

(UP)

PrincipalReductionAlternative(PRA)

SecondLienModificationProgram(2MP)

HomeAffordableForeclosureAlternatives(HAFA)

Optionsformortgagesinsured,guaranteed,orheldby

federalgovernmentagencies:

FHA(FHAHAMP),USDA(RDHAMP),VA(VAHAMP)

HousingFinance

Agency

Innovation

Fund

for

the

HardestHitHousingMarkets(HHF)

MHAandother

programswork

togetherto

help

homeowners

avoid

foreclosureand

torevitalize

thehousing

market.

Homeowner must not have not been convicted within the last 10 years of any one of the following in connection with a

mortgage or real estate transaction: felony larceny, theft, fraud or forgery; money laundering; or tax evasion.


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HAMPEligibilityCriteria

Homeowner:

Hasfinancial

hardship

and

is

delinquentorinimminent

default

Isowneroccupantof 14

unitproperty

Hassufficient,documented

incometosupportthe

modifiedpayment

Loan:

Amountowed

on

first

mortgageequaltoorlessthan

$729,750

Mortgageoriginatedonor

beforeJanuary1,2009

Firstmortgagepayment(PITI+

homeowner

association/condofees)

is

greaterthan31%of

homeownersmonthlygross

income


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Program

enhancements

aredesignedto

addressa

varietyof

scenarios.

ScenariosofHAMPModifications

Whatifthehomeownerisunemployed?

Unemployment Program (UP)

Whatifthehomeownerowes

morethanthehomeisworth?

Principal Reduction Alternative(PRA)

Whatifthe

homeowneris

strugglingtomake

themortgage

payment?

Home Affordable

Modification

Program (HAMP)


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UPOverview

Anyunemployedhomeownerwhorequests

assistanceunder

HAMP

must

first

be

consideredforUP.

UPprovidestemporaryassistanceto

homeownerwith

hardship

related

to

unemployment.

Assistancegrantshomeownersaforbearance

wherepaymentsarereducedorsuspended.

EffectiveAugust1,2010.

Home

Affordable

Unemployment

Program(UP).

What if thehomeowner is

unemployed?


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UPEligibilityCriteria

Isowner

occupant

of

14unit

property.

Makesrequestbeforeseriously

delinquent

(three

months

due,

unpaid).

Isunemployedattimeof

requestandeligiblefor

unemploymentbenefits.

HasnotpreviouslyreceivedUP

forbearance.

Amountowed

on

first

mortgageequaltoorlessthan

$729,750.

Mortgage

originated

on

or

beforeJanuary1,2009.

Isdelinquentordefaultis

foreseeable.

Loanhas

not

been

previously

modifiedunderHAMP.

Homeowner: Loan:


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FromUPtoHAMPModification

Minimumforbearanceis3months,butmaybe

extendedat

servicer

discretion.

Homeownerspaymentmustbereducedtono

morethan31%ofgrossincome.

Servicermay suspend

homeowners

mortgage

paymentinfull.

UPForbearancePlanNoticeprovidesthe

effectivedateandotherdetailsaboutthe

ForbearancePlan.

Eligible

homeowner

enters

forbearance

period.


unemployed?


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FromUPtoHAMPModification

Atleast30daysbeforeforbearanceexpiration,

servicerrequired

to

evaluate

whether

extension

willbeprovided.

ServicerprovidesInitialPackagetohomeowner

atre

employment

or

30

days

before

UP

forbearanceexpiration.

HomeownersubmitsInitialPackageforservicer

evaluationforHAMP.

Servicer

evaluates

eligible

homeownerfor

HAMP.


unemployed?


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Step#1

foreveryone!

Homeowner

submitsInitial

Packagefor

evaluation.

StepstoHAMPModification

Homeownerproactivelyseekshelpfromservicer

or

responds

to

servicer

solicitation

letter. HomeownersubmitsInitialPackage:

RequestforModification&Affidavit(RMA)

Signedanddated4506TEZ

Evidenceofincome

Certificationthathomeownernotconvictedof

felonylarceny,theft,fraudorforgery;money

laundering;or

tax

evasion

over

last

10

years.

Servicerevaluatesincome,debt,andhardship

againsteligibilitycriteria.


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Servicer

calculatestargetmodified

payment.


Servicerappliesthestandardmodification

waterfall to

reduce

monthly

mortgage

payment

to31%ofgross(pretax)income.

1. Capitalizeoutstandinginterest,escrow

advances,outofpocketservicingexpenses

(nolate

fees).

2. Cutinterestratetoaslowas2%.

3. Extendloantermupto40years.

4. Deferportion

of

principal,

interest

free,

until

loanispaidoff.


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Qualified

homeowner

entersHAMP

TrialPeriod.


Servicerdeterminesifhomeownerqualifiesfor

HAMPtrial.

Serviceroffers3monthtrialperiod(4monthsif

inimminentdefaultatstart).

TrialPeriod

Plan

Notice

details

terms

and

need

notbesignedbyhomeowner.

Homeownermustmakepaymenteachmonth

duringtrialperiod.

Homeownereligibleforpermanentmodification

aftersuccessfultrialperiod.


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HAMPPay

for

Performance

Homeownerwhomakestimelypayments

receivesprincipal

reduction

of

up

to

$5,000:

$1,000peryearfor5years.

HAMPreduces

principalfor

responsible

homeowners.


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Interestrate

adjustment

allowsfor

gradual

transitionto

sustainable

payment.

HAMPModification

Cap = Mortgage Rate atthe Time Modification

Agreement is Prepared


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PRAOverview

PRAwasdesignedtohelphomeownerswhose

homesare

worth

significantly

less

than

they

owe(LTV115%+)byencouragingservicersand

investorstoofferprincipalreductionrelief.

Principalreductionmaylowerredefaultriskfor

someloans.

Availablethroughservicersparticipatingin

HAMP.

Eachservicer

required

to

develop

guidelines

aroundapplicationofprincipalreduction.

EffectiveOctober1,2010 December31,2012.

Principal

ReductionAlternative

(PRA)

Whatifthe

homeowneris

underwater?

PRAEffective

October1,2010


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Servicer

provideshomeowner

detailsof

principal

reduction.

PRAHomeownerNotification

Servicermustprovidethefollowinginformation

tothe

homeowner:

Howdeferredprincipalreductionwillbe

appliedtotheloan.

ThatprincipalreductionwillbereportedtoIRS

inyearcurtailmentisapplied.

Thathomeownershouldseekadvicefromtax

professional.

Howhomeowner

may

elect

to

decline

the

principalreduction.

Whatifthe

homeowneris

underwater?

PRAEffective

October1,2010


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Servicersmaynotreferhomeownerto

foreclosureuntilhomeownerisdetermined

ineligiblefor

HAMP,

or

contact

efforts

failed.

Servicermaynotproceedwithforeclosuresale

untilhomeownerdeterminedineligible,

declinesHAMP,

or

contact

efforts

have

failed.

Servicersattorneyortrusteecannotconducta

foreclosuresalewithoutwrittencertification

thatahomeownerisnotHAMPeligible.

Inmostcases,ifnotapproved,homeownerbenefitsfrom30daywaitingperiodbefore

foreclosuresale.

HAMPProtections

Against

Foreclosure

Designedto

protectresponsible

homeowners

from

unnecessary

andcostly

foreclosure

actions.


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SecondLien

ModificationProgram(2MP)

2MPOverview

DesignedtoworkintandemwithHAMP,

providingacomprehensive

solution

for

homeownerwith2nd lien.

When1st lienismodified,participating2MP

servicermustoffertomodify2nd lien.

Availablethroughservicersparticipatingin2MP.

EffectivethroughDecember31,2012.


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2MPreduces

principalfor

responsible

homeowners.

2MPPay

for

Performance

Homeownerwhomakestimelypayments

receivesprincipalreductionofupto$1,250:

$250per

year

for

5years.


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2MPworksin

tandemwith

HAMP.

2MPModification

May

Reduce

Principal

Whenthereisprincipalforbearanceor

reductionon

1

st

lien,participating

2MP

servicer

must forbearorforgiveon2nd lieninatleast

sameproportion.

IfPRAisofferedretroactivelyona1st lien,2MP

servicermay forgive

principal

retroactively

on

2nd lien.


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Home

Affordable

Foreclosure

Alternatives

(HAFA)

HAFAOverview

Providesotherforeclosurealternatives:short

sale(SS),

deed

in

lieu

of

foreclosure

(DIL).

Standardizesandsimplifiesprocessto

improveexecution.

Offersbenefitstoproactivehomeowners:

Provideshomeownerwith$3,000

relocationassistance.

Releaseshomeownerfromfuture

liability.

Encouragescooperationfrom

subordinatelienholders.

Effective

April

2010

December

31,

2012.


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HAFAEligibility

BeforeevaluatingforHAFA,servicermust

considerother

retention

programs.

Homeownermustbeevaluatedwithin30

calendardaysofthefollowing:

Homeowner

does

not

qualify

for

HAMP.

Homeownerdoesnotsuccessfullycompletea

HAMPTrialPeriod.

HomeownerisdelinquentonaHAMP

modification.

HomeownerrequestsashortsaleorDIL.

Servicer

evaluates

homeownerfor

HAFA.


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HAFAShort

Sale

HAFAShort

Salereleases

homeowner

fromfuture

liabilityfor

debt.

Servicerallowshomeownertosellproperty

forless

than

full

amount

due

on

mortgage.

Serviceracceptspayoffinfullsatisfactionof

mortgage.

Servicer

approves

short

sale

terms

prior

to

listingusingstandardformsandspecific

timeframes.

Alternatively,servicermayapproveshortsale

athomeowner

request

for

property

already

onthemarket.


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HAFADeed

in

Lieu

of

Foreclosure

Homeownervoluntarilytransfersownershipof

mortgagedproperty

to

servicer

in

full

satisfactionofthetotalamountdue.

Servicermayrequirehomeownertolistand

market

property

before

agreeing

to

DIL. Homeownerprovidesmarketabletitle,free

andclearofothermortgages,liens,and

encumbrances.

HAFAincentives

also

available

on

Deed

to

Leaseoptions.

HAFADIL

releases

homeowner

fromfuture

liabilityfor

debt.


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FederalHousing

Administration

(FHA

HAMP)

Defersprincipalthroughpartialclaim;modifies

remainingbalance

into

30

year

fixed

rate

loan.

Providesaffordablepaymentat31%ofgross

monthlyincome.

Homeowner

who

makes

timely

payments

receivesprincipalreductionofupto$5,000:

$1,000peryearupto5years.

Formoreinformation,calltheNationalServicing

Centerat

1877

622

8525

or

visit

www.hud.gov/offices/hsg/sfh/nsc/nschome.cfm.

Provides

additional

assistanceto

homeowners

withFHA

insuredloans.


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HHFOverview

HHFsupportsinnovativeHFAprogramsthatstabilize

housingandhelpfamiliesavoidforeclosure.

Programsmayincludeassistancetounemployed

homeowners,principalreduction,fundingto

extinguish2nd liens,andfacilitationofSS,DIL.

Designedto

complement

MHA

or

reach

homeowners

ineligibleforMHA.

EighteenstatesplusDChavefundsavailable:AL,AZ,

CA,FL,GA,IL,IN,KY,MI,MS,NJ,NV,NC,OH,OR,RI,

SC,and

TN.

www.FinancialStability.gov/roadtostability/index.html

Housing

FinanceAgency

Innovation

Fundforthe

HardestHit

Housing

Markets(HHF)


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FinancialStability.gov

/roadtostability/

hardesthitfund.html

HHFin

18

States

Plus

DC


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LearnMore!

MakingHomeAffordable.gov

Accessto

Program

information

invariouslanguages

AccessChecklisttoPrepare

HomeownerstoSpeakwith

theirMortgageServicerorCounselor

OntheHomePage,consumers

canaccess:

Contentin

Various

Languages

1888995HOPE(4673)

HelpforHomeownersEvents

BewareofScams

InformationVideo

HelpfulLinksinFooter


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AvoidScams!

BEWAREofanycompanythatpromises

Itssafe

to

skip

your

mortgage

payments.

Walkingawayfromyourhousewontaffect

yourcredit.

Wellbuy

your

house

and

just

sell

it

back

to

youlater.

Weguaranteesuccess,forafee.

Thereis

never a

fee

for

getting

information

abouttheMakingHomeAffordableProgram

fromyourmortgageservicerora

HUD

approved

housing

counselor.

Bewareof

foreclosure

rescuescams.

Helpisfree.


31/33


Homeownerslearntoidentify

scams.Enforcementiskey

partofcampaign.

PartnerToolkitprovides

resourcesforlocal

participationandpromotion.

Informationisavailablein

multiplelanguages.

ReportScams! LoanScamAlert.org

Homeowners

learnto

identify

andreport

scams.


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GetHelp!

HomeownersHOPETM Hotline:1888995HOPE

(4673)

FannieMae:

FannieMae.com,

1800

7Fannie,

KnowYourOptions.com

FreddieMac:FreddieMac.com,1800Freddie,

[email protected]

FindaHUDapprovedhousingcounseloratHUD.gov.

ForFHAinsuredloans.calltheNationalServicing

Centerat18776228525.

Reportascam

at

LoanScamAlert.org.

Tofindyourservicersphonenumber:

Refertoyourmonthlymortgagestatement,or

look

up

on

MakingHomeAffordable.gov.

Resourcesare

inplace

to

help

homeowners.

Helpis

free.


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Discussion/Questions

Thank You

Making Home Affordable - 2011 - 1st QTR Update

Documents