Effective Mortgage Company & Counselor Partnerships - October 2009

AGENDA Welcome & Introduction Important Role of Housing Counselors Role of Mortgage Companies / Mortgage Servicers Home Retention Solutions & Tools Working with Mortgage Company’s Retention Team Appendices

Role of Counselors: Role of Counselors: Helping Homeowners Make Informed Decisions

Role of the Housing Counselors Obtain third party authorization to act on homeowner(s) behalf and work with the mortgage company. STEP 1: Obtain third party authorization to act on homeowner(s) behalf and work with the mortgage company. Define the homeowners’ hardship and the reasons for delinquency or imminent default. STEP 2: Define the homeowners’ hardship and the reasons for delinquency or imminent default. If homeowner is unemployed provide information to them about resources. See Appendix. Develop Crisis Budget and Determine Accurate Financial Picture STEP 3: Develop Crisis Budget and Determine Accurate Financial Picture Identify all household income for all wage earners in the household. (Gross and Net Income) Identify all expenses. (Monthly living expenses and secured/unsecured debts) Gather information/documentation to verify ability to pay. Work with the homeowner(s) to gather all required documents and get modification documents signed and returned to mortgage company. STEP 4: Work with the homeowner(s) to gather all required documents and get modification documents signed and returned to mortgage company. Explain Process and Roles (i.e.) mortgage company, investor, etc. Provide information about resources. (Websites, etc.) STEP 5: Explain Process and Roles (i.e.) mortgage company, investor, etc. Provide information about resources. (Websites, etc.)

Role of Mortgage Companies: Role of Mortgage Companies: Helping Homeowners/Counselors Determine Next Steps & Short/Long Term Solutions

Role of Mortgage Company Definition of Mortgage Servicing Administering a mortgage loan, including recordkeeping, payment collection, releasing liens, making certain insurance and taxes are paid, and initiating collections on past due payments and including foreclosure proceedings for loans that are in default. Lenders after originating a mortgage loan can retain the servicing or release to another mortgage company/servicer to handle the servicing process. Servicers sign contracts with investors called pooling and servicing agreements (PSAs) that provide specific rules that a servicer must follow with regard to collection and foreclosure activity. It’s important to understand that mortgage companies/servicers must adhere to guidelines provided by the investor and insurer (as applicable) specific to loss mitigation remedies. Each investor and/or insurer provides detailed guidelines. Mortgage companies service loans for investors such as Fannie Mae, Freddie Mac, and Ginnie Mae, as well as government agencies such as the Federal Housing Agency (“FHA”) / U.S. Department of Housing and Urban Development (“HUD”) and the Veterans Administration (“VA”). Some banks and/or lending institutions retain loans in its portfolio and is the investor of those loans. Lastly, mortgage companies will service loans for numerous private investors held in mortgage backed securities (MBS pools).

Loss Mitigation Solutions Foreclosure (Timelines Vary Among States) Deed In Lieu If home cannot be sold in 90 days, convey collateral to investor to reduce foreclosure time. Short Sale If equity is insufficient to pay total debt, sell at the market value and present offer to investor and mortgage insurer. Negotiate settlement for balance or forgiveness of debt. Sell the Home If no reinstatement, validate income and complete extension or modification. If no income or not enough income, encourage customer to sell at market value. Forbearance w/Modification or Loan Reinstatement Homeowner(s) remits no payment or payment at reduced amount for up to 90 days or greater pending investor approval. Homeowner(s) should seek Debt Counseling to reduce expenses to qualify and if unemployed partner with a local One-Stop Career Center. Customer then reinstates loan in full. Loan Modification Any loan modification to the original terms of the contract, including interest rate reduction, step rate interest changes, term extension, capitalization of past due amount, and/or a principle forbearance. Typically, should not exceed 1 modification in 12 months or 2 in 5 years. Repayment Plan Results in a homeowner(s) ability to repay past due amount.

Working with Mortgage Companies: Housing Counselors & Homeowners

Working with Mortgage Companies Counselors Dedicated toll-free lines, fax lines and escalation contacts at mortgage companies that are members of the HOPE NOW Alliance. Creation of dedicated boxes for HUD approved counselors and non-profit attorney networks. Specialized teams within loss mitigation/home retention teams created to work with HUD approved counselors, state programs resources, and to support foreclosure prevention events. Loss Mitigation websites and on-line submissions. Dedicated toll-free telephone lines, faxes, and s created to support new programs. Specialized loss mitigation websites. HOPE NOW Website (Borrower Assistance In-take Form). Special teams created for homeowners working with a counselor or who attend a foreclosure prevention event. Foreclosure prevention events (See appendix.) Homeowners

APPENDICES

Directing Homeowners to their Mortgage Company 1.Go to 2.On Home Page there is as drop down box with links to member servicers loss mitigation sites. 3.Click on the respective mortgage company. OPTION 1: Mortgage Companies Loss Mitigation Websites

Directing Homeowners to their Mortgage Companies 1.Go to 2.On Home Page in the section called “Contact Your Mortgage Company”, click on “Call for Assistance”. 3.A complete list of member mortgage companies names, toll free loss mitigation phone numbers and websites are listed. OPTION 2: Mortgage Companies Toll-Free Number to Loss Mitigation

Government Resources – Websites and Key Links Key Websites – Information about President Obama’s Making Home Affordable Modification Programwww.makinghomeaffordable.gov has section on its site that links homeowners to key sites. See below.

Assisting Unemployed Homeowners PLEASE ADVISE THE FOLLOWING: If a homeowner is unemployed, please visit for more information about unemployment resources (Click on Resources for the Unemployed under the Homeowner Resources Section). The U.S. Department of Labor has developed a Worker Reemployment Portal at to help individuals find information aboutwww.careeronestop.org/ReEmployment how to apply for unemployment compensation and search for jobs. The site also provides information about the employment and training services available to unemployed workers at the 3,000 One Stop Career Centers nationwide and information on their location by zip code. This information is also available through a toll free help line at US2-JOBS. If a homeowner does not have access to a computer, they may visit their local library for assistance.

Assisting Homeowners Who Allegedly Been Scammed You can refer them to the The HOPE NOW website and the FTC’s website has helpful information about resources.

Assisting Multi-Lingual Homeowners You can refer them to the The HOPE NOW website has a Google Translator Tool that translates all information on the site. The site provides helpful information about loss mitigation, housing counseling and other resources.

There is even help for Homeowners with Pets….. You can refer them to the Often non-profit organizations such as Best Friends, SPCAs, Humane Societies may provide assistance. There is an Organization called No Paws Left Behind that helps Homeowners with Pets.

Foreclosure Prevention Events

Learning More About HOPE NOW Sponsored Events 1.Click on Go to “Events in Your Area.” 3.Click on 2009 HOPE NOW Events”

Learning More About HOPE NOW Sponsored Events 1.Provides homeowners a document checklist. 2.Gives detailed directions. 3.Homeowners can print off the event flyer with information about the date/time.

Learning More Events in Your Area 1.Click on Go to “Events in Your Area. 3.Click on “Other Events in Your Area”

Learning More About HOPE NOW Sponsored Events 1.Freddie Mac tracks all foreclosure prevention events in the U.S. 2.Information is provided by state. 3.Flyers, date and time information is shared as available.