HAMP & HAFAHAMP & HAFA

THE NEW MODIFICATION AND THE NEW MODIFICATION AND SHORT SALE PROGRAMSSHORT SALE PROGRAMS

HAMP – Home Affordable HAMP – Home Affordable Modification ProgramModification Program ((Modification)Modification)

HAFA - Home Affordable HAFA - Home Affordable Foreclosure Alternative (Short Foreclosure Alternative (Short Sale )Sale )

GSE – GSE – Government-sponsored Government-sponsored enterpriseenterprise

NON – GSE not owned or NON – GSE not owned or guaranteed by Fannie or Freddieguaranteed by Fannie or Freddie

SPA – Servicer Participation SPA – Servicer Participation Agreement Agreement

SSA - Short Sales SSA - Short Sales

AgreementAgreement

RASS – Alternative Request RASS – Alternative Request for Approval of Short Salefor Approval of Short Sale

DIL – Deed – in - LieuDIL – Deed – in - Lieu

Where to Start:Where to Start:

Check your list: Check your list: http://makinghomeaffordable.gov/contact_servicer.htmlhttp://makinghomeaffordable.gov/contact_servicer.html

Is the lender participating in the program?Is the lender participating in the program?

Fannie Mae: 1-800-7FANNIE Fannie Mae: 1-800-7FANNIE

Freddie Mac: 1-800-FREDDIEFreddie Mac: 1-800-FREDDIE

Hope Hotline: 1-888-995-HOPE  Hope Hotline: 1-888-995-HOPE  

Introducing the Home Affordable Foreclosure Alternatives (HAFA):

Streamlined short sale rules Intended to speed up the short sale process Incentivizes borrowers and lenders to work

together to avoid foreclosure In effect April 5, 2010 - Dec. 31, 2012 Borrowers receive preapproved short sale

terms from the lender PRIOR to putting the home on the market.

HAFA SNAPSHOT

Lenders must fully release borrowers Less negotiation demands $6,000.00 is maximum for 2nd lien holders Borrowers walk away with $3,000.00 Quick response from lender Full commission paid to Realtor

HAMP – Home Affordable Modification Program (Modification)

Homeowners must first apply for a loan modification through the Home Affordable Modification Program, or HAMP to be eligible for HAFA.

Loan Modification options. Trial Period Complete Trial Period Plan Defaults on Modification (2 payments) Request SSA or DIL

Criteria to Qualify:

1. Is it a principal residence? 2. Balance owed on the 1st mortgage is equal

to or less than $729,750? 3. Are you having ongoing financial trouble?4. Did you close before January 1, 2009?5. Is your 1st mortgage payment (including

principal, interest, taxes, insurance and homeowner's association dues, etc) more than 31% of your current gross income?

HAMP Default Options for HAFA Participants:

1. Do not qualify for a trial mortgage modification under the Making Home Affordable Program

2. Do not successfully complete the trial period for their modification

3. Miss at least two consecutive payments during their modification period

4. Request a short sale or deed-in-lieu of foreclosure.

Buyers of HAFA

1. Contract must be Executed with all the appropriate addenda.

2. Buyer’s must have pre-approval or commitment letter on letterhead from a lender.

3. The sale must represent an “Arm’s Length” transaction.

4. Purchaser may not sell property within 90 calendar days of closing.

Who is Participating?

Allstate Mortgage Loans and Investments

American Home Mortgage

AMS Aurora loans Bank of America Chase

Citizens Countrywide EMC Fidelity HomEq GMAC Homestar Navy Federal Ocwen

www.makinghomeaffordable.com/contact_servicer.html

RG Mortgage Roebling Bank Service One Saxon Shore Bank Specialized Loan

Servicing Sterling Savings Bank

United Bank US Bank United Bank Wachovia Wells Fargo Westcom Wilshire And Many More

HAFA TIME: Lenders now must offer a short sale in writing to the

borrower within 30 days if the borrower does not qualify for, or complete a loan modification.

Borrowers then must respond within 14 days to the lender's short sale agreement.

Borrowers must submit the sales contract to the lender within 3 days, along with the buyers' mortgage preapproval and the status of negotiations with other lien holders on the seller's property.

Lenders must approve or deny the contract within 10 days.

HAFA, What’s in it for the Seller?

HAFA rules also state that lenders must release borrowers from the obligation to repay the difference between the sales price and the loan amount

No deficiency judgments are allowed for a first or second loan

Up to $3,000.00 to the sellers for relocation.

HAFA: What’s in it for the Lender?

1. $1,500.00 to loan servicers to cover administrative fees

2. The second mortgage lender was to receive $3,000.00. There is now $6,000.00 for 2nd lien holder incentives (6% Cap per lien)

3. There is an investor incentive of a federal match of up to $2,000.00 who agree to share short sale proceeds with second lien holders

HAFA, What’s in it for You?

Short Sale Agreement gives the listing real estate agent the right to an undiscounted 6% commission at closing!!

Why HAFA Short Sales may close in a fraction of the time:

Prelisted price the bank will take will be marketed Contract will be looked at by the bank within 10 days Less negotiation will take place since the guidelines spell

out specific numbers. HAMP will have received the hardship documents and

ordered a property evaluation Homeowners must meet the minimum eligibility for

HAMP modification before HAFA. 90% of all lenders are participating in this program

according to National Association of Realtors (NAR) Bank might take a Deed in Lieu if property does not sell.

For the Over-Achievers:

HAMP Modification dated March 2010: http://makinghomeaffordable.gov/docs/HAMP%20Improvements_Fact_%20Sheet_032510%20FINAL2.pdf

Making Home Affordable Plan: http://www.makinghomeaffordable.gov/index.html

The Mortgage Forgiveness Debt Relief Act and Debt Cancellation: http://www.irs.gov/individuals/article/0,,id=179414,00.html

Options for Those Who Do Not QualifyOptions for Those Who Do Not Qualify Forbearance:Forbearance: The “forbearance” The “forbearance”

agreement means that you pay agreement means that you pay only a portion of your regular only a portion of your regular payment or no payment at all for payment or no payment at all for a specific period of time based on a specific period of time based on your current financial status. At your current financial status. At the end of the forbearance the end of the forbearance period, you will begin making period, you will begin making regular payments as well as an regular payments as well as an additional amount to pay off the additional amount to pay off the past-due amount. past-due amount.

Repayment Plan:Repayment Plan: If you have If you have missed some of your monthly missed some of your monthly payments, your mortgage payments, your mortgage servicer may be able to help you servicer may be able to help you catch up by creating a schedule catch up by creating a schedule for repaying the past-due for repaying the past-due amounts. amounts.

Special mortgage relief Special mortgage relief assistance for assistance for active duty active duty military service membersmilitary service members..

Pre-foreclosure Sale:Pre-foreclosure Sale: If you If you cannot sell your home for an cannot sell your home for an amount that will pay off the amount that will pay off the mortgage loan, talk to your mortgage loan, talk to your mortgage servicer about a mortgage servicer about a pre-foreclosure or “short” pre-foreclosure or “short” sale. The mortgage servicer sale. The mortgage servicer may be willing to accept a may be willing to accept a payoff amount less than what payoff amount less than what you owe on the mortgage you owe on the mortgage balance in certain situations. balance in certain situations.

Deed-in-lieu of foreclosure:Deed-in-lieu of foreclosure: If you cannot sell your home If you cannot sell your home in a reasonable amount of in a reasonable amount of time, your mortgage servicer time, your mortgage servicer may agree to have you may agree to have you voluntarily transfer the deed voluntarily transfer the deed to the property to them to to the property to them to help avoid the impact of a help avoid the impact of a foreclosure on your credit foreclosure on your credit rating.rating.

MLSMLS

Realtor remarks:Realtor remarks:

1.1. Short SaleShort Sale

2.2. CommissionCommission

3.3. HAFA - Home Affordable Foreclosure HAFA - Home Affordable Foreclosure AlternativeAlternative

4.4. Watson Title Services Watson Title Services

5.5. Lender hereby agrees to extinguish all Lender hereby agrees to extinguish all debt and liability to the note.debt and liability to the note.

IT’S ABOUT YOUR IT’S ABOUT YOUR TIME AND MONEYTIME AND MONEY

Take the stress off your sellerTake the stress off your seller Free up your time to do what you Free up your time to do what you

do best – sell propertydo best – sell property Get the seller out from under a Get the seller out from under a

hardship and the buyer into a new hardship and the buyer into a new homehome

Deliver a full commission check to Deliver a full commission check to you at closingyou at closing

Q & AQ & AQ & AQ & A