An overview of An overview of HAMP, HARP and HAFAHAMP, HARP and HAFA

HAMP – Home Affordable Modification Program

HARP – Home Affordable Refinance Program

HAFA – Home Affordable Foreclosure Alternative

Many homeowners are struggling to make their monthly mortgage payments perhaps because their interest rate has increased or they have less income. A Home Affordable Modification will provide them with mortgage payments they can afford.

Is your home your primary residence? Is the amount you owe on your first mortgage

equal to or less than $729,750? Yes  NoAre you having trouble paying your

mortgage?For example, have you had a significant increase in your mortgage payment OR reduction in your income since you got your current loan OR have you suffered a hardship that has increased your expenses (like medical bills)? 

Did you get your current mortgage before January 1, 2009? Yes  No

Is your payment on your first mortgage (including principal, interest, taxes, insurance and homeowner's association dues, if applicable) more than 31% of your current gross income? Note: if you are uncertain, determine eligibility at makinghomeaffordable.gov 

Many homeowners pay their mortgages on time but are not able to refinance to take advantage of today’s lower mortgage rates perhaps due to a decrease in the value of their home. A Home Affordable Refinance will help borrowers whose loans are held by Fannie Mae or Freddie Mac refinance into a more affordable mortgage.

According to the resources released by the government, following are a list of qualifications:

You are the owner occupant of a one- to four-unit home

You are no more than 30 days late on your mortgage

The loan on your property is owned or securitized by Fannie Mae or Freddie Mac (see Useful Links)

http://makinghomeaffordable.gov/refinance_eligibility.html

Fannie Mae1-800-7FANNIE (8am to 8pm EST)www.fanniemae.com/loanlookup

Freddie Mac1-800-FREDDIE (8am to 8pm EST)www.freddiemac.com/mymortgage

At the time you apply, you are current on your mortgage payments (you haven’t been more than 30 days late on your mortgage payment in the last 12 months, or if you have had the loan for less than 12 months, you have never missed a payment)

You believe that the amount you owe on your first mortgage is about the same or slightly less than the current value of your house

You have income sufficient to support the new mortgage payments, and the refinance improves the long-term affordability or stability of your loan

Took effect April 5, 2010Aids eligible homeowners by pre-approving

short sales before listing and releasing them from future liability of mortgage debt

1st Lien Mortgages Apply (no FHA or VA)Used as a follow up if HAMP modifications are

not possible or if the home owner requests short sale

Not every home owner will qualify or be eligible for HAMP, HARP or HAFAHome owner may request HAFA short sale

Loan is eligible if all the following conditions are met:• Property is borrower’s principal residence• Exception: 90 day rule

• Loan is a 1st lien mortgage• Originated before Jan 1, 2009• Mortgage is delinquent or default is reasonably

foreseeable• Current unpaid balance is equal to or less than

$729,750• Borrower’s total monthly mortgage payment

exceeds 31 percent of borrower’s gross income• List with a licensed agent knowledgeable in the local market area, no FSBOs

$3,000 to Borrowers for Relocation Assistance• Will be deducted from gross sale proceeds at closing• May classify as taxable income

$1,500 to Servicers for administration and processing fees• Servicer may not charge borrower any processing fee

and MUST pay all out-of-pocket expenses$2,000 to Investors for subordinate lien holder

payoff• For every three dollars spent to release liens buyer or

investor is reimbursed one dollar – capped at 6,000

Lender waives rights to deficiency judgmentServicer must assess the property value and

cannot charge the borrower in advance• May be added to outstanding debt if transaction is

not completedServicer must review title and cannot

charge the borrower in advance• May be added to outstanding debt if transaction is

not completed

Don’t abandon the propertyMaintain the property in ‘sellable’ conditionClear and marketable title (HOA, taxes, liens)Cooperate with agent to sell by providing

accessRespond to agent and servicer in a timely

mannerProvide current income and asset statements

to your agent to keep file up to dateAct in good faith

Reinforce borrower responsibilitiesNegotiate with servicerDisseminating info to all partiesProvide relocation assistance to sellerProactively market the property for saleRefer home owner to tax and legal

professionalsFiduciary responsibility to client (home owner)Act in good faith

Notify borrower of eligibility, etc.Determine property value and bottom lineApprove/disapprove of short saleReport to credit bureausObtain mortgage insurer & investor

approval for HAFA optionsRespond under timelines specifiedAct in good faith

HAFA consideration = 30 calendar days Borrower solicitation and response = 14 calendar days SSA – short sale agreement = 120-365 days Return SSA and listing agreement = 14 calendar days Purchase offer to servicer = 3 days Approval of offer by servicer = 10 days Closing = 45-60 days

The intention of the program is to get these short sales done quickly. Therefore, all parties must be responsive and comply with timelines for this to

happen.

Borrowers’ financial situation improves enough to modify, refinance or come current

Borrower or listing broker fails to act in good faith in listing, marketing or closing

Significant change in property condition or valueEvidence of fraud or misrepresentationBorrower files for BK and court declines to

approveLitigation is initiated i.e. divorceBorrower fails to make monthly payments per

SSA

Foreclosure within 60 days? No short sale or DIL

Employer relocation $5000 or 3x PITI? Want DIL? 120 days Want to stay? D4L Non-HAFA SS ok Ends 12/31/2012

Similar to Fannie… Borrower must be

60 days delinquent DIL only after SS

90d $5000 or 3x PITI? Must pay 31% … Non-HAFA SS ok Ends 12/31/2012

Lenders and loan servicers participating in HAFA must sign a servicer participation agreement with Fannie Mae to participate in HAMP by October 3, 2010• For a full list of servicers participating in HAMP, visit

Making Home Affordable's Participating Servicers List. • http://makinghomeaffordable.gov/contact_servicer.html• Over 100 servicers have signed agreements to

participate

For a copy of this presentation, specific links or any question, For a copy of this presentation, specific links or any question, please email your request to:please email your request to:

Laura@HollywoodHillsAvoidForeclosure.comLaura@HollywoodHillsAvoidForeclosure.com

(866) 55 HOMES(866) 55 HOMESCheck out the resources on my site:Check out the resources on my site:HollywoodHillsAvoidForeclosure.comHollywoodHillsAvoidForeclosure.com