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Home Affordable Foreclosure Alternatives          Training for Trusted Advisors                                          F...
Home Affordable Foreclosure Alternatives – HAFAThis presentation will cover the following:   1      Overview   2      Adva...
Home Affordable Foreclosure Alternatives – HAFAOverview                                      February 2012 | Making Home A...
HAFA Advantages HAFA has key benefits for the homeowner.           Releases homeowner from future liability of mortgage de...
What are the Goals of HAFA?                                                          Key Components                       ...
Protections Against Unnecessary ForeclosureEligible homeowners must be considered for HAFA before:                 The ser...
HAFA Eligibility Criteria                  One‐to‐four unit owner‐occupied. Property                  Primary residence ...
HAFA Documents Summary SSA Short Sale Agreement       RASS       Request for Approval of       Short Sale                 ...
HAFA Entry PointsA homeowner can enter HAFA in several ways:                                    Without first being       ...
February 2012 | Making Home Affordable   10
HAFA Screening Phase             30 Days                    14 Days                    10 Days     Servicer screen        ...
HAFA Screening Phase                                                     30 DaysBankruptcy Consideration                  ...
HAFA Evaluation Phase 45 Days            14 DaysHomeowner          Homeowner signs evaluation /       and returns SSASSA p...
HAFA Evaluation Phase                                                   45 Days                                           ...
HAFA Marketing Phase 120+ Days       3 Days          10 Days            45+ DaysList property   Receive offer   Respond to...
Working Together for Success   Homeowner Responsibilities                         Agent Responsibilities    Provide all i...
HAFA Marketing Phase                                               3 Days                                                 ...
HAFA Marketing Phase                                               3 Days                                                 ...
HAFA Marketing Phase                                                               10 Days                                ...
3 Days                                                           Receive offerHAFA Marketing PhaseClosing the transactionT...
HAFA Process Summary  Timeline            Screening Phase                      Evaluation Phase                           ...
Alternative Request for Short Sale ‐ RASS Process    Homeowner                                     Homeowner has 14       ...
Deed‐In‐Lieu of ForeclosureTerms        1   Homeowner conveys clear title to servicer or investor.        2   Homeowner ne...
HAFA Resources                 February 2012 | Making Home Affordable   24
Trusted Advisors Escalate Tough Cases HAMP Solution  Center (HSC) helps  trusted advisors  with cases that  are difficult ...
Requesting an Escalated Case  Trusted advisor or homeowner escalates a case for review and resolution                     ...
MakingHomeAffordable.gov                             February 2012 | Making Home Affordable   27
HAFA – Success StoriesA smooth transaction helps a Florida family move forward   Florida         From Vicki O. of Prudenti...
HAFA – Success StoriesMany “THANKS” from a couple in California   California         Client: Craig & Nancy L.         Agen...
HAFA – Success StoriesCommunications is the basis for our success   Arizona         Agency: Coldwell Banker Residential Br...
Discussion/Questions                       Thank You                              February 2012 | Making Home Affordable  ...
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Home Affordable Foreclosure Alternatives Training for Trusted Advisors

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Home Affordable Foreclosure Alternatives Training for Trusted Advisors

  1. 1. Home Affordable Foreclosure Alternatives Training for Trusted Advisors February 2012 | Making Home Affordable
  2. 2. Home Affordable Foreclosure Alternatives – HAFAThis 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
  3. 3. Home Affordable Foreclosure Alternatives – HAFAOverview February 2012 | Making Home Affordable 3
  4. 4. 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 February 2012 | Making Home Affordable 4
  5. 5. 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. February 2012 | Making Home Affordable 5
  6. 6. Protections Against Unnecessary ForeclosureEligible 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. February 2012 | Making Home Affordable 6
  7. 7. 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. February 2012 | Making Home Affordable 7
  8. 8. 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 February 2012 | Making Home Affordable 8
  9. 9. HAFA Entry PointsA 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. February 2012 | Making Home Affordable 9
  10. 10. February 2012 | Making Home Affordable 10
  11. 11. 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 February 2012 | Making Home Affordable 11
  12. 12. HAFA Screening Phase  30 DaysBankruptcy 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. February 2012 | Making Home Affordable 12
  13. 13. HAFA Evaluation Phase 45 Days 14 DaysHomeowner  Homeowner signs evaluation /  and returns SSASSA preparation  February 2012 | Making Home Affordable 13
  14. 14. HAFA Evaluation Phase 45 Days Servicer evaluation / SSA preparationRequired Homeowner Documentation 1 RMA or Hardship Affidavit 2 Dodd‐Frank Certification Servicer may, but is not required to obtain financial  3 documents February 2012 | Making Home Affordable 14
  15. 15. HAFA Marketing Phase 120+ Days 3 Days 10 Days 45+ DaysList property Receive offer Respond to offer Close transaction February 2012 | Making Home Affordable 15
  16. 16. 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. February 2012 | Making Home Affordable 16
  17. 17. HAFA Marketing Phase 3 Days Receive offerProperty 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. February 2012 | Making Home Affordable 17
  18. 18. HAFA Marketing Phase 3 Days Receive offerSubmitting Offer to ServicerWithin 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. February 2012 | Making Home Affordable 18
  19. 19. HAFA Marketing Phase 10 Days Respond to offerApproval or Denial of the OfferWithin 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.  February 2012 | Making Home Affordable 19
  20. 20. 3 Days Receive offerHAFA Marketing PhaseClosing the transactionTerm of Sale Section of the RASS The RASS should identify key costs expected at closing. February 2012 | Making Home Affordable 20
  21. 21. 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 February 2012 | Making Home Affordable 21
  22. 22. 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. February 2012 | Making Home Affordable 22
  23. 23. Deed‐In‐Lieu of ForeclosureTerms 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. February 2012 | Making Home Affordable 23
  24. 24. HAFA Resources February 2012 | Making Home Affordable 24
  25. 25. 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. February 2012 | Making Home Affordable 25
  26. 26. Requesting an Escalated Case  Trusted advisor or homeowner escalates a case for review and resolution Case Submission Form MHA Third Party Authorization  Form February 2012 | Making Home Affordable 26
  27. 27. MakingHomeAffordable.gov  February 2012 | Making Home Affordable 27
  28. 28. HAFA – Success StoriesA 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. February 2012 | Making Home Affordable 28
  29. 29. HAFA – Success StoriesMany “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…”. February 2012 | Making Home Affordable 29
  30. 30. HAFA – Success StoriesCommunications 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!” February 2012 | Making Home Affordable 30
  31. 31. Discussion/Questions Thank You February 2012 | Making Home Affordable 31

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