masters of underwriting smoothing out the home saver underwriting process
TRANSCRIPT
Masters of Underwriting
Smoothing out the Home Saver
Underwriting Process
Mississippi Annual Affordable Housing
Conference
Home Saver Program Guidelines
Compliance
Pipeline Management
Site Visits/Audits
Here We Come to Save the Day……..
Summary of HHF Policy Guidelines
Home Saver Program Goal UnemployedUnderemployedReinstatement OnlyMortgage Assistance with Education OptionMaximum AssistanceTerms of Assistance
Unemployed
To bridge eligible applicants
across a period of
unemployment and allow them
to stay current on their
mortgage.
UNDEREMPLOYED
To bridge eligible applicants
across a period of
underemployment and allow
them to stay current on their
mortgage.
REINSTATEMENT ONLY
To bring eligible applicants
current after a brief interruption
or reduction in income.
MORTGAGE ASSISTANCE WITH EDUCATION OPTION
Applicants are eligible for an additional
twelve (12) months of assistanceIf an applicant enters an educational program that leads to a certification or degree from Regionally Accredited College, University or online degree programsIf the applicant lives in a distressed county, an additional six (6) months will be added (not to exceed the maximum assistance.
MAXIMUM ASSISTANCE
Applicants are eligible for up to
$50,000.00 of arrearage assistance
which must include a minimum of
twelve (12) months of mortgage
payments.
A cap of $50,000.00 is the maximum
amount permitted for the mortgage
assistance regardless if the education
option is included or not.
TERMS OF ASSISTANCE
Non recourse 0% interest, non-amortizing,
forgivable loan secured by a subordinate
lien on the subject property.
Forgiven over a five (5) year period at a
rate of 20% per year.
If the property is sold or refinanced prior
to the loan termination date, funds will be
recovered should sufficient equity be
available from the transaction.
ELIGIBLE APPLICANTS
UNEMPLOYED: One or more applicants
must be receiving unemployment, be
eligible to receive or must have exhausted
unemployment compensation benefits.
UNDEREMPLOYED: Applicant that can show
a reduction in income by 15% or more since
the hardship event.
REINSTATEMENT ONLY: Applicants who
have fallen behind but are now re-
employed and can now sustain the
mortgage.
ELIGIBLE APPLICANTS
REINSTATEMENT ONLY:Applicants must show that they experienced a hardship with either a 15% reduction in income or a job loss. If the hardship was a job loss the applicant must have been eligible for unemployment benefits. Mortgage debt to income ratio must be 35% or below. Applicants that are eligible for the option may not participate in any other options.
ELIGIBLE APPLICANTS
Military Deployment – Members of
the U.S. Armed Forces who have
experienced ANY drop in income due
to deployment will now be eligible for
the Home Saver Program.This applies to all personnel in regular and reserve components of the Army, Navy, Air Force, Marines & Coast Guard.
INELIGIBLE APPLICANTS
Active Bankruptcy.
Disabled & permanently unable
for full-time employment.
Loss of employment or reduction
in income due to medical reasons.
Part-time employment (unless
eligible for unemployment)
INELIGIBLE APPLICANTS
Temporary/Seasonal employment.
Permanent/intermittent work is
seasonal and does not apply (ex:
farm workers)
Contract work is not considered
permanent work and does not apply.
Death of spouse, catastrophic
medical expenses and/or divorce.
INELIGIBLE APPLICANTS
Self-inflicted financial hardship
Poor debt management
Stripping the equity from their home for
non-essential purpose
Mismanagement of their personal budget.
Home has already been foreclosed on.
Already received home saver assistance. An applicant can only apply for HHF assistance one time.
INELIGIBLE APPLICANTS
Teachers or other employees cannot
claim a hardship due to a decrease in
income from a nine-month pay cycle.
Rental income will be regarded as
investment income and cannot be
used to calculate a hardship based on
loss of income.
ELIGIBLE EXISTING MORTGAGES
Fixed rate
Fixed term
Balloon term
ARM
Fully amortizing
Unpaid principal loan balance cannot
exceed $271,000.00
Home equity line of credit – closed to future
advances
INELIGIBLE EXISTING MORTGAGES
Second Mortgage Loans
Chattel Mortgages without Deed of
Trust
Interest Only Loans
Negative Amortizing Loan
Open End Mortgage/Future Advance
Clause
Loan Held by non-participating servicer
INELIGIBLE EXISTING MORTGAGES
Seller Financed
Contract for Deed
Lease with Option to Purchase
Home Equity Line of Credit – Open to
future advances
Construction to Perm Loan – not
modified to permanent financing
Second Homes or Investment
Properties
PROPERTY TYPES
Single Family (attached or detached)
Condominium Unit
1 – 5 unit properties where the
applicant is living in one of the units
PROPERTY TYPES
Manufactured Home on a foundation
permanently affixed or real estate
owned by the borrower. Title to manufactured home must be surrendered and the manufactured home must be taxed as real property (must supply documentation to support mobile home is taxed as real property) Must have a Deed of Trust
MINIMUM ELIGIBILITY CRITERIA
Applicant must have a monthly
mortgage payment that they cannot
afford due to unemployment or at least
a 15% reduction in income.
The unpaid principal balance of first
mortgage cannot exceed $271,000.00.
Job loss had to occur on or after January
1, 2008.
MINIMUM ELIGIBILITY CRITERIA
Mortgage must have been made prior to
the hardship event.
Unemployed applicants must be eligible to
receive, currently receiving or have
exhausted unemployment benefits.
Self employed applicants must be able to
document a 15% reduction in income with
minimum two (2) years tax returns.
MINIMUM ELIGIBILITY CRITERIA
Self employed applicants must have
been self employed for a minimum of
two (2) years.
All documentation must be current and
within 60 days of approval.
Servicer must be a participating servicer
or be willing to sign up as a new
participating servicer.
MINIMUM ELIGIBILITY CRITERIA
Applicant must be a resident of the
State of Mississippi.
Applicant must owner occupy the home
as their primary residence.
The applicant with the hardship must be
on at least one of the following: 1) Note 2) Deed of Trust 3) Warranty Deed 4) Quit Claim Deed
REQUIRED DOCUMENTATION
REQUIRED DOCUMENTATION:
UNEMPLOYED
Copy of most recent Utility Bill
Copy of DL or Photo ID (all parties
involved)
Copy of SS Card (all parties involved)
Copy of Unemployment Benefit Letter,
(applicant may supply) However, underwriter will pull from the MDES website on each file.
REQUIRED DOCUMENTATION FOR UNEMPLOYED
Copy of most recent Mortgage
Statement (if the name of the applicant is not on the mortgage statement, you must provide one of the following additional mortgage documents which does include the applicant’s signature)
1) Note
2) Deed of Trust
3) Warranty Deed
4) Quit Claim Deed
REQUIRED DOCUMENTATION: UNDEREMPLOYED &
REINSTATEMENT ONLY
Current Mortgage Loan Statement
Copy of Original Signed Note
Copy of Original Signed Deed of Trust
Most Recent Pay Stubs (if employed)
Most Recent Two (2) Years W2’s or
1099’s
Most Recent Two (2) Years Federal
Tax Returns
REQUIRED DOCUMENTATION: UNDEREMPLOYED &
REINSTATEMENT ONLY
Self Employed – Two (2) years most
recent Business and Personal Federal Tax
Returns (all schedules)
Self Employed – YTD Profit & Loss
Statement (signed by preparer)
Self Employed – Most recent Two (2)
months Business and Personal Bank
Statements
REQUIRED DOCUMENTATION: UNDEREMPLOYED &
REINSTATEMENT ONLY
Current SSI Awards Letter (if applicable)
Copy of DL or Photo ID (all parties
involved)
Copy of Social Security Card (all parties
involved)
VOE’sCurrent Employment Previous Employment
ADDITIONAL DOCUMENTATION THAT
MAY BE REQUIRED
Divorce Decree or Court Ordered
Document
Quit Claim Deed (Divorce or Separation)
Doctors Release authorizing full-time
employment (Disability)
Additional Tax Returns prior to most
recent 2 years (Hardship)
Bankruptcy Discharge Papers
SOURCES OF INCOME NOT CONSIDERED IN
DETERMINING ELIGIBILITY
Foster Care
Family
Contributions
Food Stamps
Medicaid
Child Support
Veteran’s
Administration
Educational Benefits
Social
Security/Disability
Benefits
Retirement Income
MISCELLANEOUS
Bankruptcy: Bankruptcy Must be Discharged or Dismissed.
Income Limits: Does not apply.
Maximum Delinquency: MHC will allow up to 6 months prior to hardship (included within the $50,000.00 maximum assistance) to cover payments that precede the hardship event date.
COMPLIANCE
COMPLIANCE
Quarterly Reporting
Pipeline Management
Site Visits/Audits
Quarterly Reporting
Mortgage Payment Assistance
(MPA)
Mortgage Payment Assistance
Continuing Education Option
(MPACE)
Quarterly ReportingDocumentation
MHC monitors every 90 days for continued
eligibility
Documentation required to determine
continued eligibility:Copy of most recent Pay Stub
Hire date required if re-employedSelf Employed - Quarterly Profit and Loss statement Current years tax returns & W2’s (if you have not already provided them) or statement if you did not fileMDES statement, if unemployed Copy of most recent utility bill
Quarterly ReportingDocumentation
ELIGIBILITY RECERTIFICATION: The
individual who experienced the hardship
that qualified the household for Home
Saver assistance must complete the
following:Verify primary residenceVerify the homeowner is unemployed and am available for workIf employed, verify they have obtained employment
(must provide recent paystub).
Education Option
In order to maintain eligibility under the
Education Option the homeowner who
experienced the hardship must submit
required documentation that reflect
academic progress. The Academic Plan and supporting documentation must be received within 90 days after the date of your first payment. Within 180 days after the date of your first payment, a signed verification of enrollment from your school’s registrar’s office must be submitted to MHC.
Education OptionThe Homeowner who experienced the hardship
must take a minimum of 12 hours for a full-
time student or 6 hours for a graduate student
Upon the completion of each semester, an
official transcript must be submitted to MHC
from the school’s registrar’s office reporting
the progress of the most recent semester
completed.
If we do not receive these completed
documents, the homeowner is at risk losing the
additional 12 months of assistance.
Education Option Documentation
Required documents for education
option: Signed Academic Plan cover page and the completed written plan with course descriptionOfficial Verification of enrollment from your school signed by the registrar’s office Official Transcript from School showing grades from most recent semester completed
Must be requested and sent from registrar’s office to us directly. Cannot be a copy
WHAT DOES REGIONAL ACCREDITATION MEAN?
Regionally accredited institution of higher education
means a community college, college, or university
which is a candidate for accreditation or is accredited
by one of the following regional accrediting bodies: Middle States, Association of Colleges and SchoolsNew England Association of Schools and Colleges North Central Association of Colleges and Schools Northwest Commission on Colleges and Universities Southern Association of Colleges and Schools Western Association of Schools and Colleges; Accrediting Commission for Community and Junior Colleges
Quarterly Reporting Assistance
Please encourage clients to seek
assistance in completing the
Quarterly Report if needed.
If you assist the client in completing
the Quarterly Report, make sure that
all required documentation is
included and the report is signed.
AT RISK
If applicant is not compliant by the due date
of the quarterly review MHC will send out an
At Risk letter to applicant about possible loss
of assistance.
The applicant will have ten days to respond
and submit all missing supporting
documentation.
Documentation not received, the client’s
assistance will be terminated due to non-
compliance
Program Removal
Transition: completed the terms of their
Home Saver assistance and will be
responsible for their next mortgage
payment.
Income ineligibility – No longer considered
under employed or their mortgage is
deemed sustainable
Failure to submit required documentation
Fraud
Pipeline Management
Assign client files
Follow up with clients
Check failed applications
Remove Duplicates
Change status
Notes
Site Visits & Audits
Site visits are available for technical assistance &
training
Agency Audits A letter will be sent to the agency with the audit dateAudits will can take up to 2 days to complete depending on location and size of potential auditCompliance & Single Family reps will be present for the audit
Staff will review files based on pre-selected applicant listing generated from Counselor DirectResearch on applicant lists will be done prior to site visit to determine if the applicant file would be an eligible file
ex: applicant is still under step 1 and is not considered an actual file or it is a duplicate file
Audit findings should be completed within 30 business days from the date of audit completion.
Agency Audits
Staff will review files based on pre-selected
applicant listing generated from Counselor
Direct
Research on applicant lists will be done prior
to site visit to determine if the applicant file
would be an eligible file ex: applicant is still under step 1 and is not considered an actual file or it is a duplicate file
Audit findings should be completed within 30
business days from the date of audit
completion.
Pipeline restrictions may occur
Any Questions?