Home Affordable Foreclosure Alternatives Training for Trusted Advisors

Home Affordable Foreclosure Alternatives
Training for Trusted Advisors

February 2012 | Making Home Affordable

Home Affordable Foreclosure Alternatives – HAFA
This presentation will cover the following:

1 Overview

2 Advantages

3 Components and Process Phases

4 Resources

5 Success Stories

6 Discussion/Questions

February 2012 | Making Home Affordable 2

Home Affordable Foreclosure Alternatives – HAFA
Overview


HAFA Advantages
HAFA has key benefits for the homeowner.

Releases homeowner from future liability of mortgage debt

Homeowner receives $3,000 in relocation assistance

Less negative effect on homeowner’s credit score

Homeowner incurs no out‐of‐pocket expenses

Foreclosure cannot take place while the homeowner is being
considered for HAFA

Servicer will assign a “relationship manager” to work with the
homeowner


What are the Goals of HAFA?
Key Components
of the Program

 Release of subordinate liens and
 Release of subordinate liens and
Provide assistance to personal liability
personal liability.
Provide assistance to homeowners
homeowners who need to
Goal 1 who need to transition to more
transition to more affordable
 Financial incentives for
 Financial incentives for
homeowners, investors and
affordable housing. homeowners, investors and
housing. servicers
servicers.

 Uniform documents.
 Specified response times and
Standardize & streamline the
Goal 2 short sale process.
timeframes.
 Upfront disclosure of short sale
terms and conditions.


Protections Against Unnecessary Foreclosure
Eligible homeowners must be considered for HAFA before:

The servicer refers the loan to foreclosure.
1

A foreclosure sale is conducted.
2

Note:
• At the servicer’s discretion, the servicer may initiate foreclosure or continue with an existing
foreclosure, but may not complete the sale.
• A foreclosure sale may not be conducted until 5 business days after sending a notice stating
that the homeowner was determined to be not eligible for HAFA.

HAFA Eligibility Criteria

 One‐to‐four unit owner‐occupied.
Property
 Primary residence at some point in the last 12 months.

 Has not purchased a new property within the last 12 months.
 Has documented financial hardship (for Servicemembers, this may
Homeowner include a Permanent Change of Station order).
 Is delinquent or default is reasonably foreseeable.

 First lien mortgage balance equal to or less than $729,750 (1‐unit).
Mortgage
 Mortgage originated on or before January 1, 2009.


HAFA Documents Summary

SSA
Short Sale Agreement

RASS
Request for Approval of
Short Sale

Alternative RASS
Alternative Request for
Approval of Short Sale

DIL Agreement
Deed-in-Lieu Agreement


HAFA Entry Points
A homeowner can enter HAFA in several ways:

Without first being Property
From HAMP
in HAMP already listed

Homeowner does not
Homeowner does not qualify Homeowner requests short Homeowner sends an
qualify for a Trial Period Plan.
for a Trial Period Plan (TPP). sale or DIL. executed sales contract to
Homeowner does not the servicer.
the servicer.
Homeowner does not
successfully complete a Trial
successfully complete a TPP.
Period Plan.
Homeowner misses at least
Homeowner misses at least
two consecutive payments
two consecutive payments on
on a permanent HAMP
a
modification.
permanent HAMP
modification.
Homeowner requests short
Homeowner requests Short
sale or DIL.
Sale or Deed‐in‐Lieu.


HAFA Screening Phase

30 Days 14 Days 10 Days
Servicer screen Homeowner responds to Servicer acknowledges
homeowner and notify for notification homeowner’s request
HAFA

10 Days
Homeowner request short Servicer acknowledges
sale or DIL homeowner’s request


HAFA Screening Phase 30 Days

Bankruptcy Consideration Screen homeowner and
notify
for HAFA

Homeowner in bankruptcy must be considered for
1 HAFA if requested.

Servicers are not required to proactively solicit
2 homeowners in bankruptcy.

Time allowances are acceptable for bankruptcy‐related
3 delays.


HAFA Evaluation Phase

45 Days 14 Days

Homeowner Homeowner signs
evaluation / and returns SSA
SSA preparation


HAFA Evaluation Phase 45 Days
Servicer evaluation /
SSA preparation

Required Homeowner Documentation

1 RMA or Hardship Affidavit

2 Dodd‐Frank Certification

Servicer may, but is not required to obtain financial
3 documents


HAFA Marketing Phase

120+ Days 3 Days 10 Days 45+ Days
List property Receive offer Respond to offer Close transaction


Working Together for Success

Homeowner Responsibilities Agent Responsibilities

 Provide all information and sign documents  Listing agent should check market value of
required within required timeframes. property regularly to monitor fluctuations.
 Respond to all servicer inquiries.  Listing agent should monitor and respond
 Cooperate with the listing broker to actively to all homeowner and/or servicer inquiries
market the property. to ensure timely two‐way communication
 Maintain the property in a manner that between parties.
facilitates marketability, including:  Listing agent will work with homeowner to
 Interior and exterior maintenance, engage the subordinate lien holders in
 Payment of utilities, efforts to obtain lien under $6,000
association/condo dues, fire and subordinate lien cap (mortgage and non‐
hazard insurance, and mortgage debt).
 Report property damage requiring an
insurance claim to repair.
 Work to clear any liens or other title
impediments that would prevent
conveyance.
 Make the monthly payment stipulated in
the SSA, if applicable.


HAFA Marketing Phase 3 Days
Receive offer

Property Valuation & Disputes
 Periodically re‐evaluate property value.
Re‐evaluation  Servicer determines property value in accordance with
Value  investor guidelines during the evaluation phase.
Reconcile discrepancies between independent assessment
Procedures
Determination and market value.
 Value is communicated in the SSA as the list price.

 Periodically re‐evaluate property value.
Re‐evaluation
 Reconcile discrepancies between independent assessment
Procedures
and market value.

 Homeowner can dispute property value.
Homeowner
 Procedures by which a dispute can be made must be listed
Disputes
on each servicer’s HAFA Matrix.


Receive offer

Submitting Offer to Servicer
Within 3 business days of receipt of an executed sales contract, the homeowner or the
listing agent sends the a completed RASS with supporting documents to the servicer.
Supporting documents include the following:

1 A copy of the executed sales contract and all addenda.

Buyer’s documentation of funds or buyer’s pre‐approval or
2 commitment letter.

All information regarding the status of subordinate liens and/or
3 negotiations with subordinate lien holders.


Respond to offer

Approval or Denial of the Offer
Within 10 business days of receipt of the RASS, the servicer must determine whether to approve the
short sale and provide a decision back to the homeowner.

If the net proceeds available for payment to the servicer are equal to or exceed
1 the pre‐determined minimum acceptable net proceeds amount and all other
program conditions are met, the servicer must approve the short sale.

The servicer may require that the sale closing take place within a reasonable
2 period following acceptance of the RASS (but no less than 45 calendar days
from the date of the sales contract without the homeowner’s consent).

Decision is documented in the servicer section of the RASS and sent back to
3 the homeowner.

4 Servicer may not require any reduction to the real estate commission amounts.


3 Days
Receive offer

HAFA Marketing Phase
Closing the transaction
Term of Sale Section of the RASS

The RASS
should identify
key costs
expected at
closing.


HAFA Process Summary
Timeline

Screening Phase Evaluation Phase Marketing Phase

Trigger event to Homeowner has 14 Servicer has Homeowner and/or Servicer has 10
begin HAFA calendar days to 45 calendar days to listing agent has business days to
screening respond with request deliver an SSA to minimum of 120 approve or deny the
for consideration for homeowner calendar days to sale or provide a
HAFA market property counter offer

30 Days 14 Days 10 Days 45 Days 14 Days 120+ Days 3 Days 10 Days 45+ Days

Servicer has Servicer has Homeowner Homeowner and/or Servicer schedules
30 calendar days 10 business   has 14 calendar listing agent has 3 closing for no less
to offer days to days to return business days to than 45 calendar
consideration acknowledge SSA to servicer submit offer with days. Upon closing,
under HAFA homeowner’s RASS to servicer homeowner
request receives $3,000
relocation
assistance


Alternative Request for Short Sale ‐ RASS
Process

Homeowner Homeowner has 14 Servicer schedules
and/or listing calendar days to closing for no less
agent submits respond to request than 45 calendar
Alternative RASS for HAMP days. Upon closing,
with executed consideration. homeowner receives
contract and $3,000 relocation
RMA. assistance.
14 Days 45+ Days

Listing / Marketing Eligibility / Evaluation Approval / Closing

Servicer has 10 Servicer notifies Servicer has 45
business days homeowner calendar days to
to acknowledge about potential approve, deny
homeowner’s HAMP eligibility. or provide counter
request. offer.


Deed‐In‐Lieu of Foreclosure
Terms

1 Homeowner conveys clear title to servicer or investor.

2 Homeowner negotiates subordinate liens.

3 DIL Agreement may provide option for homeowner to rent property.

DIL Agreement may allow homeowner to re‐purchase property
4 at a later time – must be included in servicer HAFA Policy.


HAFA Resources


Trusted Advisors Escalate Tough Cases
HAMP Solution
Center (HSC) helps
trusted advisors
with cases that
are difficult to
resolve.

HSC will be sending a periodic survey to trusted advisors to rate the quality of service received. This information is highly valuable to
HSC in its efforts to ensure continuous improvement in the escalations process, and it is integral that we receive feedback from you
through this survey.

Requesting an Escalated Case
Trusted advisor or
homeowner
escalates a case
for review and
resolution

Case Submission Form

MHA Third Party Authorization
Form


MakingHomeAffordable.gov


HAFA – Success Stories
A smooth transaction helps a Florida family move forward

Florida
From Vicki O. of Prudential Florida Realty:

“We feel relieved!”

When Vicki’s client did not initially qualify for a HAMP modification, the servicer
recommended HAFA. The servicer was responsive and worked toward a quick
turnaround – five weeks to approval from the time Vicki found a buyer. Vicki
stated that the HAFA transaction was “one of the smoothest transactions she
ever had”.

The seller owed approximately $150,000 on the mortgage with a final sales
price of $39,500. The HAFA short sale closed with no deficiency judgment for
the seller and left this Florida family saying, “We feel relieved!”.

With a new “lease” on life, the client used part of the $3,000 relocation
incentive to pay for the security deposit and first month’s rent on their new
rental home.


Many “THANKS” from a couple in California

California

Client: Craig & Nancy L.
Agency: Marjorie S. and Harald S. of Stangl Advisors – San Francisco, CA

“…THANKS just doesn’t seem adequate for all your efforts on our behalf…”

A pending divorce and loss of income established the hardship for Craig and Nancy L.
of California. The property was listed for $450,000 and the couple owed $650,000 on
the first lien and $206,201.13 on the second lien. Unfortunately, their first experience
was marred by a real estate professional who mismanaged the entire process. After
having the property listed for 18 months to no avail, foreclosure was just around the
corner.

Craig and Nancy were then referred to Stangl Advisors. Marjorie and Harald at Stangl
introduced their new clients, Craig and Nancy, to HAFA and they were happy to learn
that such a program existed. After only seven months, Craig and Nancy closed
escrow at an approved sales price of $475,000 and were able to make a healthy
transition without the burden of a deficiency judgment! In a letter to Marjorie and
Harald, they wrote, “…THANKS just doesn’t seem adequate for all your efforts on our
behalf…”.


Communications is the basis for our success

Arizona
Agency: Coldwell Banker Residential Brokerage

A key to success is to provide clear, concise communication to
all parties throughout the process: sellers, buyers & servicers.

“At Coldwell Bankers, we developed a short sale Q&A for sellers to
ensure they understand the HAFA program, as well as complete a
financial worksheet and provide a 10-step worksheet with action items
and timelines. We engage with the servicer and establish a strong
working relationship, building confidence and trust, while adhering to
consistent dialogues, maintain communication logs, and follow up.
We see ourselves as the conduit of the process, communication,
setting expectations, and follow through!”

Success: “I completed 3 short sales in the first 6 months of
2011 and have 4 in process!”


Discussion/Questions

Thank You


Home Affordable Foreclosure Alternatives Training for Trusted Advisors

Recommandé

Recommandé

Contenu connexe

Similaire à Home Affordable Foreclosure Alternatives Training for Trusted Advisors

Similaire à Home Affordable Foreclosure Alternatives Training for Trusted Advisors (20)

Dernier

Dernier (20)

Home Affordable Foreclosure Alternatives Training for Trusted Advisors