APPLICATION:1. Loans Held inFNMA’s portfolio;2. Loans that are part ofMortgage backedSecurity (MBS) poolthat has specialservicing options;3. Loans that are part ofa shared-risk MBSpool for whichFNMA markets theacquired property;4. Servicers of theseloans;5. Servicers whoparticipate in HAFAwww.makinghomeaffordable.gov/loan
Principal Residence First Liens before January 2009 Delinquent or imminent default UPB is less than $729,750 Owner Occupied Have not purchased new home within 1 year
Borrowers refusal to pay Substantial unencumberedassets or cash reserves High Surplus Income
• Pre-Approval of Short Sale Price• Specific time period to complete short sale• Deed-in-Lieu• Only 3 documents to submit• Set funds for Junior Liens• $3,000 in relocation costs• And…….
Fraud SS fraud occurs in at least 2% of allsales and costs banks $300 millionannually. Widespread Bailouts Lenders are concerned if SS areapproved on a widespread basis,large numbers of people who areunderwater will start bailing out. Incentives In some cases, servicers arecompensated higher for foreclosurethan for a short sale. Mortgage Insurance In some cases, banks can collect onMI if the property goes throughforeclosure as opposed to a short sale.