All of those servicers that have signed agreements with U.S. Department of the Treasury to participate in the Home Affordable Modification Program (HAMP) they must consider those eligible borrowers who do not qualify for HAMP or other foreclosure prevention options including the Home Affordable Foreclosure Alternatives program which includes short sale and deed in lieu. However each of the servicer has some option in determining additional eligibility criteria and certain program rules. In order to facilitate the borrowers and their representatives in understanding about any unique components of a HAFA policy of servicers, Treasury has developed a HAFA model. The information of this model is prepared by the U.S. bank.
- Eligibility requirements: –
Basic eligibility and U.S. Bank specific requirements:
- The mortgage loan is negligent or default is reasonably foreseeable
- Cannot have pending foreclosure sale less than 15 days from receipt of a Complete Borrower Response package
- The mortgage loan is a first lien mortgage loan that should be originated on or before January 1, 2009. This includes mortgages that are secured by cooperative shares, apartment units and manufactured housing.
- The mortgage property is secured by a one to four unit property.
- The property securing the mortgage is not inculpated.
- The current Unpaid Principal Balance of the mortgage loan not including liabilities is not greater than;
- 1Unit: $729,750
- 2Units: $934,200
- 3 Units: $1,129,250
- 4Units: $1,403,400
- A borrower has documented a financial hardship that is evidenced by a signed Hardship Affidavit or RMA wherein the borrower has represented that he or she does not have sufficient advantages to make the monthly mortgage payments.
- The borrower must submit a request for consideration for a short sale or deed in lieu or before pre-approval of a HAFA short sale, written request for approval of an executed purchase contract on or before December 31, 2015. Written evidence of the request must be evidencing submission by program cu-off date.
- The borrower must be a natural person. Mortgage loans made to, or secured by properties owned by, corporations, partnerships, limited liability companies or other business entities are not eligible for assistance under HAMP.
- The acceptance of the procedures not stats from the sale but all of the costs and payments should be 85% of the current property value which must be approved by U.S. Bank.
- Documentation requirements: –
Preapproved short sale: –
- Request for Mortgage Assistance(RMA)
- Hardship Affidavit
- Dodd Frank Certification
- Evidence of residency
- Subordinate lien documentation to include lender name, balance and account number
- Income Documentation; same a required for evaluation of the Home Affordable Modification Program (HAMP); Documentation must be less than 90 days old.
Generally wage earners will be asked to provide two most recent pay receipts from the last 90 days. Self-employed borrowers will be asked to provide a profit and loss statement for the most recent five months and prior year Federal tax returns.
Request for Short Sale Approval when submitting an Executed Sales Contract that has not been preapproved: –
- Accepted purchase contract
- Other offer documents or subordinate lien information
- Forthcoming default: –
- Most recent filed tax returns
- Pay receipts from the last 90 days
- Bank and investment account statements
- Documentation of all sources of income
- Valuations: –
- Establishing property value; Property value is established by using a certified interior Broker’s Price Opinion if UPB is less than $250,000 and a full appraisal if the current UPB is greater than $250,000.
- Disputed valuations; submit comparable sales documentation including date of sale, distance form subject property and reason the proposed property is more comparable to the subject property.
- Price Reduction Review during Marketing Period; property values will be reviewed every 180 days by U.S. Bank.
- Payments during marketing period: –
Borrowers must continue to make the modified payments during the marketing period.
- Deed-In-Lieu: –
If a short sale is not completed then Deed-in-lieu required at the end of the marketing period.
- Average timelines: –
- 14 calendar days for the Submission of required income or eligibility documentation.
- 30 calendar days for the eligibility review to issuance of SSN
- 10 business days for the acknowledgement of receipt of request for short sale or DIL
- 120 calendar days or as specified in SSN for marketing period
- 5 business days for the submission of purchase contract
- 30 calendar days for the servicer’s approval of purchase contract
- 45 calendar days for escrow and closing
- 30 calendar days for valuation dispute resolution
- Third party vendors: –
U.S. Bank may engage the third parties to act on the behalf of the bank;
- Real estate agents or broker
- Property preservation vendors