Presentation is loading. Please wait.

Presentation is loading. Please wait.

Home Affordable Foreclosure Alternatives (HAFA) A “Making Home Affordable” Initiative This document is proprietary and solely for the use of AssetPlanUSA,

Similar presentations


Presentation on theme: "Home Affordable Foreclosure Alternatives (HAFA) A “Making Home Affordable” Initiative This document is proprietary and solely for the use of AssetPlanUSA,"— Presentation transcript:

1 Home Affordable Foreclosure Alternatives (HAFA) A “Making Home Affordable” Initiative This document is proprietary and solely for the use of AssetPlanUSA, its clients and/or partners including the California Association of REALTORS®. No part of it may be circulated or reproduced without prior written approval from AssetPlanUSA. This document is not endorsed by any government department. Revised

2 MARKET BACKGROUND Worst housing and economic crisis since Great Depression with over 10 million families affected! 6

3 FORECLOSURE ALTERNATIVES MARKET BACKGROUND WHAT ARE THE NUMBERS? June million delinquent or in some stage of foreclosure 2.6 million HAMP/HAFA eligible 60+ day delinquent loans As of July 2011, there are 675,447 active permanent HAMP modifications Total U.S. delinquency rate was 8.34% Unemployment rate nationwide 9.1% (nearly 14.1 million Americans unemployed) with California at 12% 6.2 million estimated “long-term unemployed” 12,888 successful HAFA transactions completed Any borrower who either fails or is denied a loan modification is someone who should consider foreclosure alternative options. *Source: Making Home Affordable Program Servicer Performance Report Thru July 2011, (as of 9//01/2011, Housing Scorecard August 2011; Lender Processing Services Mortgage Monitor thru July 2011; U.S. Dept of Labor, Bureau of Labor Statistics August 2011

4 MAKING HOME AFFORDABLE INITIATIVE Launched in early 2009  HARP & FHA Refinances  Refinance for Underwater Borrowers  HAMP & 2MP: Loan Modification Programs  HAFA: Foreclosure Alternatives  Short Sale  Deed-in-Lieu

5 THE HAMP AND HAFA RELATIONSHIP HAFA after HAMP  Borrower Not Qualified; or  Does Not Want Modification HAFA Short Sale or Deed-in-Lieu  Debt Forgiveness  First Lien upon qualification  Subordinate liens upon effective negotiation  Relocation Support  $3,000

6 Making Home Affordable (MHA) Plan (Non-GSE) Determine Servicer Participation Program Eligibility Who Owns the Loan Determine Servicer Participation Program Eligibility Who Owns the Loan Permanent Loan (Stay in Home) Permanent Loan (Stay in Home) HAMP 90 Day Trial Period HAMP 90 Day Trial Period Lender May Offer HAMP Before HAFA Options Lender May Offer HAMP Before HAFA Options Request HAFA (45 day consideration period ) Request HAFA (45 day consideration period ) Possible Foreclosure Successful Close HAFA Short Sale Deed-in-Lieu Deed-for-Lease Repurchase Optio n HAFA Short Sale Deed-in-Lieu Deed-for-Lease Repurchase Optio n No Yes Servicer Participation List

7 INVESTOR GUIDELINES & CONSTRAINTS Who Owns U.S. Mortgages?  Investors  Usually Not Also Servicer  Investor Not Bound by MHA Guidelines o May Add Additional Guidelines

8 MHA HANDBOOK FOR SERVICERS Published December 2010  Consolidated Resource for all MHA Information  Supersedes all Treasury Directives  Mortgages Not Owned or Guaranteed by Fannie Mae or Freddie Mac

9 TREASURY HAFA BENEFITS Investor Benefits  Foreclosure Expense Reduction  Property Condition Maintained  Loss Severities Reduced  Faster Default Resolution

10 Unpaid Principal Balance $500,000 REO 60% Loss Severity Short Sale 48% Loss Severity Investor receives $200,000 Investor receives $260,000 20% less Loss Severity Effectively, Investor Receives a 30% Higher Return

11 TREASURY HAFA ELIGIBILITY HAFA Eligibility - Similar to HAMP  Principal Residence  Can be Vacant up to 12 Months Prior  First-lien Originated on or Before January 1, 2009  Delinquent or Will be in the Foreseeable Future  Un-paid first lien balance =/- $729,750  2 units - $934,200  3 Units - $1,129,250  4 Units - $1,403,400  Verified Financial Hardship  No Longer 31% of Monthly Gross Income SERVICERS MAY RE-EVALUATE BORROWERS PREVIOUSLY DETERMINED TO BE INELIGIBLE FOR HAFA USING NEW DIRECTIVE GUIDANCE

12 IMPLICATIONS OF TREASURY HAFA Implications for Servicers and Investors  HAFA Consideration Mandatory Before Foreclosure  Includes Those Trying HAMP o Did not qualify for HAMP o Failed HAMP Trial Period Plan o Delinquent on a HAMP Payments o Borrower Requests Short Sale

13 IMPLICATIONS OF TREASURY HAFA Implications for the Distressed Borrower Borrower’s Responsibilities:  Must Cooperate with Real Estate Professional  Must Deliver Clear Title  Must Maintain Property  Borrower Occupancy o Can be Vacant Up to 12 Months Prior to SSA o Borrower Didn’t Purchase Another Home o Unless Servicer Offers HAFA Deed-for-Lease

14 TREASURY HAFA INCENTIVES  $3,000 Borrower Relocation Incentive  $1,500 Servicer Incentive  1 st Lien Investor Incentive o Partially Reimbursed by Treasury (Up to $2,000) o Allow Portion of Gross Sale Proceeds Paid to Subordinate Lien Holders ($6,000 Aggregate Cap) o Servicer, on Behalf of Investor Determines Amount of UPB Paid to Subordinate Liens o Servicer Must Include How Subordinate Liens Will be Paid in HAFA Policy

15 TREASURY HAFA ROLES & RESPONSIBILITIES The Distressed Borrower  Respond According to Timelines o No Less Than 14 Days from Borrower Solicitation or SSA Mailing  Provide Hardship Information o Request for Modification & Affidavit “RMA” or Signed Hardship Affidavit  List Property According to SSA Guidelines  Comply With Terms Spelled Out in the SSA

16 TREASURY PROCESS AND DOCUMENTS The Treasury HAFA Process – Standard  Request for Modification Affidavit (RMA) or Signed Hardship Affidavit, Plus  Two unique documents o Short Sale Agreement (SSA) o Request for Approval of Short Sale (RASS)

17 TREASURY HAFA PROCESS & DOCUMENTS Request for Modification and Affidavit  Submitted at Start of Process  Servicer Review for HAMP  If Denied HAMP, HAFA Offered  SSA Then Generated o Borrower Returns Document to Servicer in 14 Days  Pre-set List Price and Terms

18 TREASURY HAFA PROCESS & DOCUMENTS Short Sale Agreement (SSA) Overview  Generated by Servicer Giving: o Program Details o Pre-Approved Terms and Conditions o Borrower Agrees o Property Listed After SSA Received o Real Estate Professional Acknowledges

19 TREASURY HAFA PROCESS & DOCUMENTS Request for Approval of Short Sale - RASS  Generated by Servicer  Sent with the Short Sale Agreement - SSA  Completed by Borrower and Real Estate Professional  Re-States Relevant SSA Terms  Final Transaction Details

20 TREASURY HAFA PROCESS & DOCUMENTS Request for Approval of Short Sale - RASS

21 TREASURY HAFA PROCESS & DOCUMENTS RASS Disapproval of Short Sale  Why Disapproved? o Didn’t Comply o Documents Not Included o Proceeds Insufficient

22 TREASURY HAFA PROCESS & DOCUMENTS Treasury HAFA Process – Alternative RASS  Property Already Listed  Executed Contract Received  Submitted by Real Estate Professional After Offer Received o Part of HAFA Package  Servicer to Respond to Borrower No Later than 45 Days From Receipt of Request o Response May be Approval, Disapproval or Counter-Offer

23 TREASURY HAFA PROCESS & DOCUMENTS Deed-in-Lieu Agreement – DIL  Borrower Voluntarily Transfers Property  If Available – Offered in SSA or DIL Agreement  Deed-for-Lease or Repurchase Option  Incentives Still Available  Full Release of Debt  Clear & Marketable Title

24 HAFA PROCESS: STANDARD HAFA SHORT SALE STANDARD PROCESS TIMELINETRIGGER / COMMENT Servicer solicitation or Borrower solicitation Servicer must give written response to request in 10 business days 45 calendar days Borrower requests HAFA consideration Borrower fails HAMP Trial Period or HAMP Modification Lender/Servicer offers program Borrower receives SSA Broker and Borrower Sign and return SSA with stipulated documents 14 calendar days Lender/Servicer sends Borrower an SSA for Short Sale during the 45 day consideration period Short Sale Agreement Duration days Effective Date is date the SSA is mailed to borrower Submittal of a Sales Contract, RASS and stipulated documents 3 business days Borrower executes a Sales Contract for the sale of their property (contract is bilateral) Lender/Servicer mandated response with approval or disapproval 10 business days Lender/Servicer receives executed Sales Contract, RASS and stipulated documents Must approve if SSA terms are met Approval or Disapproval must be in writing Closing 45 calendar days (minimum) Transaction is approved May be shortened with borrower’s consent

25 HAFA PROCESS: ALTERNATIVE HAFA SHORT SALE ALTERNATE PROCESS TIMELINETRIGGER / COMMENT Borrower requests HAFA using the Alternative RASS Servicer must give written response to request in 10 business days 45 calendar days Borrower requests HAFA consideration after an offer has already been submitted for approval Transaction approval, disapproval or counteroffer 10 business day approval Lender/Servicer approves Borrower for the HAFA Alternative RASS transaction Closing 45 calendar days (minimum) Transaction is approved May be shortened with borrower’s consent *Effective June 1, 2011, as of Supplemental Directive 11-02

26 PRIMARY CHANGES SINCE LAUNCH TREASURY HAFA ONLY Supplemental Directive  Announced December 2010-Effective February 2011 o Monthly Gross Income o Vacating the Property o Subordinate Lien Release o Alternative Deed-in-Lieu o AltRASS Timing

27 PRIMARY CHANGES SINCE LAUNCH TREASURY HAFA ONLY Supplemental Directive  Announced March 2011-Effective June 2011 o Validation of Residency o Acknowledgement of Receipt o Response in 45 Days o If Not Able to – Every 15 Days

28 PRIMARY CHANGES SINCE LAUNCH TREASURY HAFA ONLY Supplemental Directive  Announced May 2011-Effective September 2011 o Assignment of Relationship Manager o Assigned by no later than November 2011 o Notification within 5 business days of assignment

29 PRIMARY CHANGES SINCE LAUNCH TREASURY HAFA ONLY Supplemental Directive  Announced August 2011  Partially Effective Immediately, or by October 2011 o Template Matrix at HMPAdmin.com  Property Value  Additional Eligibility Policies o Borrower Communication Timelines  Proactive Contact – 14 Days o Use of HAFA over Proprietary SS/DIL

30 PRIMARY CHANGES SINCE LAUNCH TREASURY HAFA ONLY Supplemental Directive Continued o Subordinate Liens  $6000 – Mortgages  Other Lien Holders o Re-Evaluation of Value o Use of Relocation Incentive  Transaction Costs  NOT Release of Mortgage or Non-Mortgage Liens

31 FANNIE MAE AND FREDDIE MAC HAFA Key Similarities  HAMP Review Before HAFA  Eligibility the Same as Treasury HAFA o 31% of Gross Income Still Applies  Forms and Processes the Same

32 FANNIE MAE HAFA Fannie Mae Key Differences Borrower May Not Qualify If:  Foreclosure is Imminent – within 60 days Borrower May Still Qualify If:  Relocation for employment within prior 90 days

33 FREDDIE MAC HAFA Freddie Mac Eligibility Differences:  Borrower Must be 60+ Days Delinquent  Allowable Transaction Costs Capped o Total Closing Costs 9%  Maximum Commission 6%  Alternative RASS Not Permitted  Documents Cannot be More Than 90 Days Old  Mandates Monthly Mortgage Payments o Not to Exceed 31% of Gross Income

34 FANNIE MAE / FREDDIE MAC HAFA Borrower’s Financial Condition:  Borrower Cannot Contribute to Sale o HAFA Requirement  No Borrower Promissory Notes Permitted  Maximum Cash Reserves o 3 x PITI or $5,000 (whichever is higher)  Borrower Surplus Income May Cause Non- Qualification

35 FANNIE MAE DEED-FOR-LEASE Fannie Mae Deed-for-Lease Deed-for-Lease Program (D4L)  Borrower stays as Tenant o No Repurchase Option  No Lease-Back or Repurchase Program for Freddie Mac HAFA

36 FANNIE MAE / FREDDIE MAC HAFA Servicer Duties and Responsibilities  List Price  FREDDIE MAC: 90 days “as is” Price  Listing Agent Accountability - Monthly o Marketing Plan and Updated Comps  Price Adjustments o Within MANP  Clear Title  Minimum monthly payment 31% Freddie Mac o Additional termination requirements Source: Fannie Mae Announcement SVC

37 RESOURCES Additional Sources: (Consumers) (Servicers and Professionals) Questions or Escalated Issues May be ed Treasury: (Escalated Issues) (Questions)

38 CONTACT INFO Sept for CVAR Members &


Download ppt "Home Affordable Foreclosure Alternatives (HAFA) A “Making Home Affordable” Initiative This document is proprietary and solely for the use of AssetPlanUSA,"

Similar presentations


Ads by Google