1. Module 3: The SSA 7 Pages 26 3-1

2. SSA Pg. 1: Cover Letter (top) SSA Pg. 1: Cover Letter (top) Introduces Short Sale 26 3-2

3. How a Short Sale Works Participation 27 SSA Pg. 1: Cover Letter (bottom) 3-3

4. SSA Page 2 (top) SSA Page 2 (top) 27 3-4 120 Days to sell

5. When to Take Listing At or prior to SSA Listing commission honored if 6% or less Required contract language – (see pg. 36 of manual) Get subordinate lien info 28 3-5

6. Maintain property 28 SSA Page 2 Bottom SSA Page 2 Bottom 3-6

7. SSA Page 2 Bottom SSA Page 2 Bottom Monthly Payments? Servicer may require monthly payments. Freddie Mac requires payments 29 3-7

8. SSA Page 2 Bottom SSA Page 2 Bottom Clear title & negotiate with subordinate lien holders 29 3-8

9. SSA Page 2 Bottom SSA Page 2 Bottom Servicer may pay up to $8,500 aggregate total to subordinate mortgage lien holders. 29 3-9 Fannie & Freddie pay 6% of the 2 nd lien balance up to a max $6,000.

10. Fannie & Freddie One Subordinate Lien Payoff Examples 2nd lien of $50,000 $50,000 x 6% = $3,000 2nd lien of $100,000 $100,000 x 6% = $6,000 29 3-10

11. Fannie & Freddie One Subordinate Lien Payoff Examples 2nd lien of $150,000 $150,000 x 6% = $9,000 $6,000 Max. 29 3-11

12. Fannie & Freddie Two Subordinate Liens Payoff Examples 2nd lien of $50,000 3rd lien of $30,000 $50,000 x 6% = $3,000 to 2nd lien holder $30,000 x 6% = $1,800 to 3rd lien holder 30 3-12

13. Fannie & Freddie Two Subordinate Liens Payoff Examples 2nd lien of $90,000 3rd lien of $30,000 $90,000 x 6% = $5,400 to 2nd lien holder $30,000 x 6% = $1,800 Only $600 to 3 rd lien 30 3-13

14. Subordinate Liens Liens released from property Full release of liability No $$ or notes from seller or licensee HOA/Condo Assn. liens and other subordinate liens NOT included in $8,500 but must be paid off Seller should seek legal advice regarding future liability 30 3-14

15. SSA Page 2 Bottom SSA Page 2 Bottom Future paperwork. Foreclosure postponed. 31 3-15

16. Foreclosure Postponement Foreclosure process may begin No foreclosure sale: –Determining eligibility –Awaiting SSA –During SSA –Pending closing –Pending DIL 31 3-16

17. SSA Page 3 Top SSA Page 3 Top Four points: 1.Arm’s length transaction 31 3-17

18. Arm’s Length Transaction Can’t list with or sell to: –Related persons –Persons with whom the seller has close personal or business relationship 31 3-18

19. Arm’s Length Transaction Can’t list “In-House” From HAFA Q&A on www.REALTOR.orgwww.REALTOR.org –Q: May sellers who are real estate agents list with their broker? 31-32 3-19

20. Arm’s Length Transaction Q: May sellers who are real estate agents list with their broker? A: No, this would violate the arm's length transaction provision that prevents the seller from listing the property with anyone they have a close personal or business relationship with. This is an anti-fraud provision. If the property is listed by an agent with their broker the risk of an "incentive" being paid and the seller profiting from the transaction increases." 32 3-20

21. SSA Page 3 Top SSA Page 3 Top 1.Arm’s length transaction 2.No commission to seller 3.Resale restriction on buyer 4.Seller can’t buy-back or lease 32 3-21

22. SSA Page 3 Top SSA Page 3 Top Authorization to talk to others 32 3-22

23. SSA Page 3 Top SSA Page 3 Top Tax consequences notice 32 3-23

24. SSA Page 3 Top SSA Page 3 Top Credit reported as: “settled for less than full payment.” 32 3-24

25. SSA Page 3 Bottom SSA Page 3 Bottom Deed-in-Lieu 33 3-25

26. Deed-in-Lieu After 120 day marketing period expires Optional language Voluntary transfer to lender Borrower gets $3,000 Sub liens removed –Up to $6,000 available If borrower uncooperative, servicer forecloses 33 3-26

27. Deed-for-Lease Program After Deed-in-Lieu Servicer may allow borrower to: –Lease property back (Deed-for-Lease) –Repurchase property at future date 34 3-27

28. SSA Page 4 SSA Page 4 Contract Acceptance & RASS 35 3-28

29. Contract Acceptance & RASS 3 Biz days to submit: –Purchase agreement –Addenda –RASS –Buyer’s proof of funds or commitment letter Approval or disapproval within 10 Biz days 35 3-29

30. Pages 5-7: Program Terms & Conditions Pages 5-7: Program Terms & Conditions 1. List Price or Acceptable Sale Proceeds 35-36 3-30

31. List Price or Acceptable Proceeds Established through BPOs List price more likely Fannie & Freddie prohibit disclosing minimum net proceeds Seller & licensee should be realistic –Demonstrate to servicer why price is too high 35-36 Paragraph 1 3-31

32. Listing Agreement Required clauses Cancellation Lender/MI approval 36 Paragraph 2 3-32

33. Property Maintenance & Expenses Seller responsible Damage reported 36 Paragraph 3 3-33

34. Partial Mortgage Payments Seller may be required to make payments Cannot exceed 31% of gross income 37 Paragraph 4 3-34

35. 5a. Closing Costs 5a. Closing Costs Servicer will select one: Total costs may not exceed $__________ Total costs may not exceed _____% of list price Itemized allowable closing costs including commission of _____% of sales price 37 Paragraph 5 3-35

36. 5b. Subordinate Liens 5b. Subordinate Liens Subordinate Liens: Up to $8,500 total aggregate 6% of balance (Fannie & Freddie only) Full release of liability required 37-38 Paragraph 5 3-36

37. 5c. Commissions 5c. Commissions Commissions 38 Paragraph 5 3-37

38. Commissions Commission % stated Listing commission honored Not to exceed 6% No commission to seller or buyer If rebate offered, commission is reduced 38 3-38

39. Third Party Vendors May be retained by servicer Fees cannot be charged to seller nor deducted from commission 38 3-39

40. 5d. Relocation assistance 5d. Relocation assistance Relocation assistance for occupant $3,000 per household 38 Paragraph 5 3-40

41. Assistance Eligibility 39 Paragraph 6 3-41 Vacate at closing Principal residence Dodd-Frank Certification

42. 3 Biz days to submit: RASS Contract & Addenda Buyer’s proof of funds/commitment letter Sales Contract 39 Paragraph 7 3-42

43. Required contract language Arm’s length transaction Buyer can’t sell within 90 days Parties to the Sale 40 Paragraph 8 3-43

44. Required closing time frame can’t be less than 45 days from contract acceptance. Closing 40 Paragraph 9 3-44

45. Foreclosure process may continue Sale is suspended Foreclosure Sale Suspension 40 Paragraph 10 3-45

46. No personal liability No deficiency judgment Satisfaction & Release of Liability 41 Paragraph 11 3-46

47. MI approval required Mortgage Insurer Approval 41 Paragraph 12 3-47

48. Review reasons with seller Termination of this Agreement 41 Paragraph 13 3-48

49. SSA Termination Financial position improves Borrower or Broker fails to act in good faith Change in property condition Fraud or misrepresentation Bankruptcy Litigation Payments not made 41 3-49

50. No guarantees Lender retains other remedies Settlement of Debt 41 Paragraph 14 3-50

51. SSA Pg. 8 Borrower’s Signature 42 3-51 Borrowers’ Signatures Exceptions: Death Divorce Special circumstances

52. SSA Page 8: SSA Page 8: Broker Acknowledgement Broker not a party to SSA Salesperson may sign Agreement to change listing to conform to SSA 43 3-52

53. SSA Page 8: SSA Page 8: Servicer signature HOPE Hotline Fraud Notice 44 3-53

54. Sign & Return the SSA Within 14 days of “Effective Date” “Effective Date” = date mailed by servicer 44 3-54