Presentation on theme: "Consideration Process Servicers must first consider Borrowers for a HAMP Modification and then for a B65 Modification or other home retention workout."— Presentation transcript:
Consideration Process Servicers must first consider Borrowers for a HAMP Modification and then for a B65 Modification or other home retention workout options before considering them for foreclosure alternatives under HAFA. A Mortgage meets the basic eligibility criteria for HAFA if all of the conditions listed on the following slides are met
Conditions The Mortgage is a First Lien owned, securitized or guaranteed by Freddie Mac originated on or before January 1, 2009, including super conforming Mortgages and Conforming Jumbo Mortgages sold to Freddie Mac under a Seller's negotiated Purchase Documents, which are secured by 1- to 4-unit single- family Primary Residences, including Condominium Units and Guide-eligible Manufactured Homes that are not abandoned, condemned or vacant (except as otherwise specified in the Evaluation) The Mortgaged Premises are occupied by the Borrower as the Borrower's Primary Residence
Conditions (cont) The Borrower is more than 60 days delinquent in payment of the Mortgage The Borrower's original total monthly Mortgage payment prior to a loan modification, if any, exceeds 31% of the Borrower's gross monthly income as described in Chapter C65 The Servicer previously considered the Borrower for a HAMP Modification, a B65 Modification or other home retention workout options, but the Borrower was either ineligible or refused a modification as described below
Consideration Process (cont) Every potential eligible Borrower who met the previous qualification requirements must be considered for HAFA before the Borrower's Mortgage is referred to foreclosure or a pending foreclosure sale is conducted. Servicers must consider HAMP eligible Borrowers for HAFA within 30 calendar days of any of the events listed in the following slide
Conditions The Borrower is determined by the Servicer not to qualify for a HAMP Trial Period Plan The Borrower does not successfully complete a HAMP Trial Period Plan The Borrower is delinquent on his or her modified Mortgage by missing at least two consecutive payments The Borrower is offered, but refuses, a HAMP Trial Period Plan, B65 Modification or other home retention workout options and requests a short sale or deed-in-lieu of foreclosure
Consideration Process (cont) The date and outcome of the HAFA consideration must be documented in the Mortgage file. Borrowers may be accepted into HAFA if an SSA or DIL Agreement, as described in this chapter, is fully executed by the Borrower and received by the Servicer on or before December 31, 2012.
Consideration Process (cont) A Borrower may not participate in a HAMP Trial Period Plan, HAMP Modification or B65 Short Payoff and agree to an SSA simultaneously The Servicer may not offer an SSA to a Borrower if the Borrower is currently in an active HAMP Trial Period Plan, is performing on a HAMP Modification or is in the process of being reviewed for a B65 Short Payoff
Consideration Process (cont) Borrowers in active Chapter 7 or Chapter 13 bankruptcy cases must be considered for HAFA if the Borrower, Borrower's counsel or bankruptcy trustee submits a request to the Servicer. With the Borrower's permission, a bankruptcy trustee may contact the Servicer to request a short sale or DIL under HAFA. Servicers are not required to solicit these Borrowers proactively for HAFA.
HAFA Ineligible Mortgages ineligible for HAFA include the following: Mortgages secured by Investment Properties or second homes Cooperative Share Mortgages Leasehold Mortgages Mortgages sold to Freddie Mac on a participation basis Mortgages sold to Freddie Mac with recourse or indemnification FHA, VA and RHS Mortgages
Ineligible Borrower If the Borrower requests to be considered for HAFA and is found to be ineligible, the Servicer must continue evaluating the Borrower for a B65 Short Payoff or a B65 deed-in-lieu of foreclosure, unless ineligibility was due to title reasons under the evaluation, in accordance with the workout hierarchy and other evaluation notice requirements set forth in the HAFA Deed-in-Lieu requirements. The Servicer must continue with delinquency collection efforts, or initiate or continue foreclosure, as applicable.
Ineligible Borrower After the Servicer has determined the Borrower is ineligible for a HAFA Short Sale, the Servicer must consider the Borrower for a B65 Short Payoff.