Module 4: The RASS & Alt. RASS 45 4-1. The RASS 45 4-2.

Module 4:Module 4:

The RASS & Alt.

The RASS & Alt.

RASSRASS

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The The

RASSRASS45

4-2

RASS Cover LetterRASS Cover Letter

Lines 1-3 & 5 reiterate items discussed in SSA

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RASS Cover LetterRASS Cover Letter

Line 4: No other agreements or offers not disclosed to servicer

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Emerging Fraud Trends: Emerging Fraud Trends: Short Short Payoff FraudPayoff Fraud

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Short Payoff FraudShort Payoff Fraud "Any misrepresentation or deliberate

omission of fact that would induce the lender, investor or insurer to agree to the terms of a short payoff that it would not approve had all facts been known."

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How Short Payoff How Short Payoff Fraud WorksFraud Works

• Seller owes $100,000, property worth $80,000

• Facilitator negotiates a $70,000 payoff• Facilitator doesn’t disclose existing offer

for $95,000• Both sales close

simultaneously

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Where’s the Fraud?Where’s the Fraud?• Failure to disclose the second offer• Lender takes bigger loss

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Other Agreements or OffersOther Agreements or Offers

• If other offers received servicer should be informed

• REALTORS® – Be aware– Avoid fraud or appearance of fraud

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RASS Page 2RASS Page 2Seller Net Sheet

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$3,000 to seller or tenant

RASS Page 2RASS Page 2

•Preliminary HUD-1•Complete RASS based on HUD-1

$8,500 Max Subordinate Mortgage lien payoff

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RASS Page 2 (cont’d.)RASS Page 2 (cont’d.)

Attach all required info

•Remember required contract language:Arm’s length90 day prohibition on re-sale

•Return within 3 Biz days49

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RASS Page 3 RASS Page 3

Sale Approved!!!

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RASS Page 4 RASS Page 4 Disapproval of Sale

Reasons explained

•May include counter offer

•If no counter, determine cause for disapproval and re-submit

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The Alt. The Alt.

RASSRASS52

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The Alternative RASSThe Alternative RASS• Purchase offer received but…• Seller has not:– Requested a HAFA short sale– Qualified yet for HAFA– Received SSA

• Submit contract with Alt. RASS

• Check servicer’s web site for form or procedure

No Alt. RASS

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Submitting the Alt. RASSSubmitting the Alt. RASS• Check servicer’s web site for package

or procedure

• Submit Alt. RASS & contract

• Non-GSE loans, servicer must approve, disapprove or counter offer within 30 days of receipt of Alt. RASS & other docs.

• Fannie Mae, no time frame

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Alt. RASS Alt. RASS Detailed Detailed

DiscussionDiscussion

Alt. RASS Cover LetterAlt. RASS Cover Letter

• Takes the form of a solicitation by servicer

• Contact servicer for specific instructions and/or forms

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Alt. RASS Page 2Alt. RASS Page 2

Borrower has received an offer and requests a short sale

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Alt. RASS Pages 2 & 3Alt. RASS Pages 2 & 3

• Contain same information regarding the Program Terms and Conditions as in the SSA &/or RASS

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Alt. RASS Page 4Alt. RASS Page 4Net Sheet, same as RASS

Attached document list• Check servicer’s web site for complete list of required docs

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Alt. RASS Pages 5 & 6Alt. RASS Pages 5 & 6

• Approval & Disapproval pages

• If disapproved, review reasons and re-submit

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HAFA General HAFA General Terms & ConditionsTerms & Conditions

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Foreclosure sale suspended:

• Determining eligibility

• Awaiting SSA

• During SSA term

• Pending closing

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Payment ForbearancePayment Forbearance

• Servicer may require monthly payments?

• Can’t exceed 31% of gross income

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First Mortgage ReleaseFirst Mortgage Release• Released within 30 days

• Waive deficiency judgment

• Can’t require note from borrower

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Subordinate LiensSubordinate Liens• $8,500 total aggregate for all

mortgage liens

• On HUD-1

• Liens released

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Subordinate LiensSubordinate Liens• No future liability for

borrower

• Written release required prior to releasing funds

• Can’t require $$$ from seller or licensee

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Borrower FeesBorrower Fees• No processing fees

• Servicer pays all

• Borrower waives reimbursement of impounds and insurance

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Mortgage InsuranceMortgage Insurance• Approval required

• Insurer must waive rights to collect

• Fannie & Freddie seek “Delegations of Authority”

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Incentives – Thru 2013Incentives – Thru 2013• Borrower or tenant: $3,000– On HUD-1– Servicer reimbursed

• Servicer: $1,500

• Investor: $2,000 max. to release subordinate liens– $1 for $3 basis

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Required SignaturesRequired Signatures• Servicer– Actual date

• Original borrowers

• Exceptions– Deceased– Divorced– Special cases

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Reporting RequirementsReporting Requirements• Servicer reports to Fannie Mae– SSA executed or updated– Sale Closes– SSA Terminates

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Servicer ComplianceServicer Compliance

• Freddie Mac is compliance agent

• Servicer must have staff & resources to implement HAFA

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Email Questions or Complaints to:[email protected]

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Problems???Problems???

• Treasury HAFA– [email protected]

– 866-939-4469

• Fannie Mae– [email protected]

– 800-7FANNIE 800-732-6643

• Freddie Mac– [email protected]

– 800-FREDDIE 800-373-3343

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Problems???Problems???

• Escalation for non-HAFA Programs• FHA loans: FHA National Servicing

Center– 1-877-622-8525

• VA loans: Service Center– 1-877-827-3702

• USDA loans: Centralized Servicing Center– 1-800-414-1226

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