Making Home Affordable

Transcription

1 Making Home Affordable Working Together to Help Homeowners March 2013 Making Home Affordable

2 You will be able to print today s presentation and listen to the Encore Replay this evening from HMPadmin.com Learning Center =>Trusted Advisors=>Presentations=> Short Sale Workshop & Webinars 3/19: Short Sale Workshop Las Vegas, NV Follow us on March 2013 Making Home Affordable 2

3 MHA Offers Solutions MHA and related programs work together to help homeowners avoid foreclosure. Transition from Home Ownership Historically Low Mortgage Interest Rates AVOIDING FORECLOSURE Breathing Room for Unemployed Help When You Owe More Than the Home is Worth More Affordable Payments March 2013 Making Home Affordable 3

4 MHA Provides Relief to Struggling Homeowners Over 1.5 million actions taken to help homeowners. MHA Foreclosure Avoidance Programs Homeowner Assistance Actions MHA First Lien Modifications Started 1,264,711 Second Lien Modification Program (2MP) 105,437 Home Affordable Foreclosure Alternatives (HAFA) 114,417 Unemployment Program (UP) Forbearance Plans 30,525 *Does not include 2.09 million Home Affordable Refinance Program (HARP) refinances through November Total *1,515,090 Source: Making Home Affordable Program Performance Report Through January 2013 March 2013 Making Home Affordable 4

5 There s Still Work to Do While we see signs of recovery, many families and communities continue to struggle with foreclosure. Source: RealtyTrac March 2013 Making Home Affordable 5

6 MHA Enhancements Help More Homeowners Enhancements designed to provide relief to more homeowners and to accelerate housing market recovery. Expansion of Program Eligibility Extension of Application Deadlines MHA Help for More Homeowners Increase in Investor Incentives for Principal Reduction March 2013 Making Home Affordable 6

7 HAFA Offers Transition from Homeownership When the weight of homeownership becomes too great, there are still options to avoid foreclosure. Home Affordable Foreclosure Alternatives (HAFA) includes short sale and deed-in-lieu of foreclosure (DIL). Think HAFA when: Mortgage has become unaffordable, and homeowner needs a way out. Homeowner doesn t qualify for modification. Modification doesn t work out. Homeowner has moved and needs to sell. Path back to homeownership generally shorter from short sale than from foreclosure. March 2013 Making Home Affordable 7

8 HAFA Offers Benefits HAFA continues to set the standard for short sales in a difficult market. HAFA available for principal residence, rental property, and vacant property (not condemned). HAFA features standardized time frames. Short sale terms can be pre-approved. Commission for real estate professionals is set. Homeowner must be released from personal liability for mortgage debt. Relocation assistance ($3,000) may be provided to homeowner or tenant. Cap on subordinate lien payoff amounts increased from $6,000 to $8,500. Foreclosure not to be completed during review. March 2013 Making Home Affordable 8

9 HAFA is Streamlining Documentation New HAFA guidance makes use of certain documents optional. Request for Mortgage Assistance (RMA) Form, which includes Hardship Affidavit and Dodd- Frank Certification, most comprehensive. No income documents required except as required by investor guidelines. HAFA-specific documents SSA, DIL Agreement, RASS, Alt RASS now optional or replaced. Servicer must provide HAFA terms in writing. Became effective Feb. 1. March 2013 Making Home Affordable 9

10 HAFA Servicers to Provide Timely Decisions New HAFA guidance shortens servicer response time. Became effective Feb. 1. Generally, servicer to decision homeowner s request within 30 calendar days. Servicer to respond in writing with one of the following: Confirmation of HAFA eligibility and terms of HAFA short sale or DIL. Notice of ineligibility and either terms of proprietary options, or non-approval of any short sale or DIL. Confirmation of receipt (within 10 days), copy of the Hardship Affidavit, description of evaluation process, and timeline for decision. March 2013 Making Home Affordable 10

11 HAFA Further Defining Hardship New HAFA guidance defines predetermine d hardship. Homeowners must demonstrate hardship for HAFA eligibility: Reduced income Increased expenses Excessive debt Insufficient cash reserves Predetermined Hardship = 90+ days delinquent plus FICO score <620. Became effective Feb. 1. March 2013 Making Home Affordable 11

12 Financial Hardship Eligibility for Service Members HAFA recognizes PCS as financial hardship. HAFA takes into account the challenges a PCS order creates for service member. Service member can cite PCS order as basis for financial hardship: Regardless of whether income decreased. As long as the service member does not have sufficient liquid assets to make mortgage payments. March 2013 Making Home Affordable 12

13 HAFA Process Timeline Short Sale Request/HAFA Solicitation Evaluation Marketing and Offer Trigger event to begin HAFA screening 30 Days Servicer has 30 calendar days to offer consideration under HAFA. Servicer has 30 calendar days to deliver short sale terms to homeowner Homeowner and/or listing agent has minimum of 120 calendar days to market property. Servicer has 10 business days to approve or deny the sale or provide a counter offer. 30 Days 120+ Days 3 Days 10 Days 45+ Days Servicer has 10 business days to acknowledge homeowner s request for a short sale or DIL. 10 Days Homeowner and/or listing agent has 3 business days to submit received offer to servicer. Servicer schedules closing for no less than 45 calendar days. Upon closing, homeowner receives $3,000 relocation assistance. March 2013 Making Home Affordable 13

14 HAFA Is Expanding Reach More than 114,400 homeowners have completed HAFA transactions. Home Affordable Foreclosure Alternatives (HAFA) The Home Affordable Foreclosure Alternatives Program (HAFA) offers incentives and a streamlined process for homeowners looking to exit their homes through a short sale or deed-inlieu of foreclosure. HAFA has established important homeowner protections and an industry standard for streamlined transactions. Effective November 2012, the GSEs revised their short sale and deed-in-lieu programs. The GSE Standard HAFA program is closely aligned with Treasury s MHA HAFA program. Combined Short Sale and Deed-In-Lieu Activity GSE Activity Source: Making Home Affordable Program Performance Report Through January 2013 March 2013 Making Home Affordable 14

15 Industry Resources Resources are in place to help. HAMP Solution Center Fannie Mae Freddie Mac FHA Loans FHA National Servicing Center USDA RHS Loans Centralized Servicing Center VA Loans Mortgage-Help Resources (866) (800) 7Fannie KnowYourOptions.com (800) Freddie, select option 2 FreddieMac.com (877) HUD.gov/offices/hsg/sfh/nsc/nschome.cfm (800) (877) HomeLoans.va.gov March 2013 Making Home Affordable 15

16 HMPadmin.com Visit HMPadmin.com for the latest MHA Program Guidance and information. March 2013 Making Home Affordable 16

17 HMPadmin.com Learning Center Upcoming Webinars for Trusted Advisors Register at HMPadmin.com > Learning Center > Trusted Advisors > Webinars California: State and Federal Foreclosure Prevention Solutions Wednesday, March 27, :00 p.m. - 2:30 p.m. ET Escalations for Trusted Advisors Wednesday, March 27, :30 p.m. - 4:30 p.m. ET HAMP A to Z for Trusted Advisors Monday, April 1, :00 p.m. - 4:30 p.m. ET Unemployment (UP) for Trusted Advisors Monday, April 8, :30 p.m. - 4:30 p.m. ET MHA Tools & Resources Thursday, April 11, :30 p.m. - 3:30 p.m. ET Short Sale Workshop/Webinar Live from Los Angeles Tuesday, April 16, :00 p.m. - 2:00 p.m. ET March 2013 Making Home Affordable 17

18 HMPadmin.com News Subscribe to the MHA enewsletter for the latest program, operational, and MHA updates. March 2013 Making Home Affordable 18

19 HMPadmin.com Case Escalation Get help with difficult-toresolve cases. March 2013 Making Home Affordable 19

20 MHA.gov - Program Options Learn about MHA Program options and participating mortgage companies at MHA.gov. March 2013 Making Home Affordable 20

21 MHAStorefront.com Order MHA brochures and posters. Have them shipped to you at no cost. March 2013 Making Home Affordable 21

22 Outreach Events for Homeowners 82 events put more than 72,000 homeowners face-to-face with housing counselors and servicers. Event partnership with HOPE Now and HUD ensure events of high quality. March 2013 Making Home Affordable 22

23 Help for Homeowners Event Las Vegas, NV is our 83 rd event. Help for Homeowners Event Tuesday, March 19, :00 p.m. 8:00 p.m. Wednesday, March 20, :00 a.m. 3:00 p.m. Paradise Event Center - Las Vegas Hotel and Casino 3000 Paradise Rd. Las Vegas, NV Complimentary Self-Parking at Paradise Event Center Learn more at MakingHomeAffordable.gov March 2013 Making Home Affordable 23

24 S H O R T S A L E P R O G R A M

25 Chase by the Numbers through January 2013 National 7.3 million Mortgages Serviced for Chase or Other Nevada 60, ,683 Modifications Completed 7, ,410 Short Sales Completed 1/09 since 8, ,430 Foreclosures Prevented* Chase Since 1/09 at 17,736 * Includes modifications, forbearance, short sales, repayment plans, term extensions, and deeds-in-lieu/settlements 25 Page 25

26 Chase s Proactive Short Sale Program The List Management Department offers a proactive approach that allows for efficient processing of a Short Sale. Contract not required! We want to open the Short Sale file as soon as there is an active listing for the property. Property valuation and document collection/file perfection occurs with List Management prior to assignment to a Negotiator. Pre-Contract files will require regular contact between Chase and the listing agent to ensure marketing of the property is occurring effectively while considering any foreclosure or other timelines. This process is intended to streamline the overall process by ensuring the Short Sale package is complete to facilitate a fast turn-around for a decision. 26 Page 26

27 Short Sale Financing and Timing It is essential to initiate the buyer s loan approval process early for non-cash transactions to avoid delays in closing Once the short sale is approved, it may take up to 90 days to close if a buyer does not have a strong pre-approval and an early start with financing A primary cause for approved short sales not completing is failure of the buyer to secure financing If the transaction does not complete, the file will remain active with our List Management Department while listed on the MLS. Having well-qualified, pre-approved back-up buyers is essential! 27 Page 27

28 What Can You Do to Help With a Short Sale? Use Equator. Chase began roll-out on October 5. All files are in Equator as of 12/15/12. Full capability for customers and real estate agents to upload: Third party authorizations Listing agreements and agreements of sale HUD-1 settlement statements Financial documentation Obtain transaction status updates and communicate directly with negotiators through the portal, minimizing phone traffic and outside 28 Page 28

29 What Can You Do to Help With a Short Sale? Set reasonable expectations regarding timelines and valuations. Know your seller. Properly pre-approve your buyer! Submit complete short sale request prior to receiving a contract or at time of listing - do not wait for a buyer! Start the process! Maintain regular contact with Chase and return required documents promptly (within 3 days of request). Escalate when necessary. Ensure proposed transaction is at arm s length and there is no potential conflict of interest. Partnership with your Mortgage Banker is critical! 29 Page 29

30 Chase Short Sale Resources Short Sale Hotline: chase.com/avoidforeclosure Short Sale Escalation: Call between 8 a.m. to 7 p.m. ET, Monday Friday This number changes to effective 2/15/13. Chase Homeownership Centers: Locate Chase Homeownership Centers at chase.com/myhome 30 Page 30

31 Disclosures This material is intended for home lending professionals or nonprofit, HUD-approved, housing counselors and not for distribution to consumers. This document is not an advertisement for consumer credit as defined in 12 CFR (a)(2). All home lending products are subject to credit and property approval. Rates, program terms and conditions are subject to change without notice. Not all products are available in all states or for all dollar amounts. Other restrictions and limitations apply. Information presented is for informational purposes only. It is believed to be reliable, but Chase does not warrant its completeness, timeliness or accuracy. Home lending and deposit products offered by JPMorgan Chase Bank N.A. Member FDIC JPMorgan Chase & Co. 31 Page 31

32 Short Sales A guide to working with Wells Fargo Rob Chauncey Field Short Sale Manager Nevada, Utah and Idaho

33 33 Short Sale as an Excellent Alternative to Foreclosure A Short Sale is a solution that allows the customer to sell the home for less than total amount owed. When all home retention solutions have been reviewed and exhausted, we immediately begin working with the borrower to determine if a short sale or deed-in-lieu can be accomplished. A Short Sale Benefits Everyone Customer Benefits Alternative to foreclosure with planned & graceful exit, Wells Fargo or Investor pays closing costs and incentives in certain cases, credit report reflects Settled for Less than Owed. Buyer Benefits Usually home is in better condition than buying a foreclosed property. Wells Fargo Benefits Average of 10% savings over REO, reduced losses and corporate advances, eliminates nonperforming asset. Junior Lien Holder Benefits Higher debt payment resulting from short sale versus foreclosure transaction. Community Benefits Occupied and maintained properties, stabilizing neighborhoods, preventing vandalism and other crime.

34 Primary Concerns or Myths Surrounding Short Sales Top concerns provided through external surveys and our own internal escalated complaints. Primary Concerns and Myths Difficulty of obtaining mortgage financing appraisals a special sore spot. Fall-off in First Time Homebuyers affects overall demand. Banks are holding shadow inventory in the hopes values will increase. Lost documentation, multiple submissions. Short sale process takes too long and I lose potential buyers. There are a number of decision makers involved in a short sale the more parties involved, the more complex the process becomes. All parties must be aligned before the home can be sold, i.e., investors, second lien holders, and mortgage insurance. Most importantly, this is not a typical buy-sell transaction.

35 35 Why is each Short Sale process so Different?

36 Wells Fargo s Loan Servicing by Investor Type Wells Fargo is primarily a Lender and a Servicer, with 82% of the loans serviced by Wells Fargo, owned by outside investors. 66% of the loans serviced by Wells Fargo are owned/ guaranteed by Fannie Mae*, Freddie Mac*, and Ginnie Mae: FNMA and FHLMC buy loans up to a conventional loan limit now $417,000 in most markets. GNMA buys FHA and VAinsured loans, which provide mortgage funding for homeowners with little cash to put down or U.S. Veterans. Wells Fargo Loan Servicing By Investor Ownership (as of 2nd Quarter 2011) 1 * Fannie Mae = FNMA, Freddie Mac = FHLMC, Ginnie Mae = GNMA 18% 69% 13% 1 Includes all residential mortgage loans serviced within Wells Fargo (WFHM, WFF, HE) and Wachovia 18% of the loans serviced by Wells Fargo are also owned by Wells Fargo: Roughly 27% of this is Wachovia Picka- Pay, which came to Wells Fargo as part of the Wachovia acquisition. A portion is also Wells Fargo Home Equity and Wells Fargo Financial. 13% of the loans serviced by Wells Fargo are owned by private investors. Private investors include pension funds, investment houses, banks, and insurance companies. Includes America s Servicing Company, or ASC loans, which are loans that Wells Fargo did not originate or underwrite, and which were serviced under the ASC name. We only maintain the servicing rights to these loans, we are not the end investor. (including PaP) Confidential. For review only in Wells Fargo approved meetings. Not to be copied, shared or distributed beyond members of the approved meeting. 36

37 37 Wells Fargo services 10 different portfolios and all 10 were processing short sales differently. Process Re-Engineering project for all operation sites will allow alignment between sites and investors and best practices. This best practice should create a more transparent process flow and a better experience for all involved.

38 38 Process Flow Set up Open short sale template & assign to processor Processor Order appraisal & collects docs. Assigns to Negotiator when offer comes in Negotiator Works with Realtor to obtain best offer and final approval Closer Collects wire Settlement Audits HUD

39 39 Wells Fargo Changing the Short Sale Process from Reactive to Proactive.

40 40 Field Short Sale Program Wells Fargo Home Mortgage desires to provide local real estate agents with personalized service and information related to its short sale process. Local Short Sale Managers are in high risk markets to develop relationships with local REALTORS to improve the customer experience and increase the closing ratio. Rob Chauncey Field Short Sale Manager

41 41 Wells Fargo Proactive vs. Reactive Short Sales (cont) Get us involved early in the process Notify Wells Fargo Home Mortgage (or the appropriate servicing lender) as soon as the listing contract is signed This allows us to complete the property valuation and borrower financial evaluation prior to receiving the offer. This significantly reduces the short sale decision time on a submitted offer. Streamlining process through Equator

42 42 Leveraging technology through Equator Create your free account today Step 1: Go to Enter your address in the Create an Acct section Step 2: Select the account type Choose the Agent option Step 3: Follow the steps Enter all information requested Step 4: Submit your registration Then you ll receive an with a link to activate your account Equator support team: (310)

43 SUMMARY OF THE SHORT SALE PROCESS FOR REAL ESTATE AGENTS March 2013 Kamara McMullen AVP Short Sale Outreach

44 Key Changes For 2013 Streamline Programs HAFA Held FNMA/FHLMC HAFA GSE Sunset DOJ 2 nd lien Alignment MI Delegations 30 Day Decisions Dual Track 44

45 Short Sale Inventory 45

46 Process Overview Getting Started Eligibility & Initiation Qualify the Borrower Determine FMV Marketing & Selling Market the Property Submit Offer & Req d Docs Closing the Deal Investor Decisioning Closing 46

47 Getting Started Determine Short Sale Eligibility Determine if the borrower has a documented financial hardship Determine if the borrower owes more than home is worth Educate the homeowner on the short sale process and determine if liquidation is the best option. Educate the homeowner about the importance of providing necessary documents and cooperation in maintaining property for showings. Contact Citi to initiate the short sale. 47

48 Getting Started 1. Initiate Short Sale with CitiMortgage Homeowners Assistance Team (HAT) at (866) Account number. Borrower Social Security Number (SSN). Borrower(s) first and last name. Letter of Authorization (LOA). Borrowers Financials. 48

49 Getting Started HAFA ARASS Initiate Short Sale Without Offer Held FHA ATP With Offer HAFA RASS Traditional 49

50 Getting Started 2. Qualify the Borrower Homeowner Support Specialist Hotline (HOSS) (855) Fixed 1 st & 2 nd Lien Fax: HOST.CitiLinkdocs@citi.com Home Equity Line of Credit Fax: HOST.CUSTOMdocs@citi.com OneMainFinancial or CitiFinancial* Fax: HOST.Networkdocs@citi.com 50

51 Getting Started 3. Determine Fair Market Value What You Do Ensure accessibility to the property for an interior valuation if required Provide comps if reassessment is needed Start process of initiating outside lien releases and/or judgments What We Do Determine FMV Order new value every days (depending on investor) Work with realtors on reassessment of value if needed Assign file to a negotiator 51

52 Marketing & Selling 5. Submit offer, HUD1, Addendums, etc What You Do Submit offers that are FMV Present counter offers to buyers agent Be aware of approaching f/c sale dates Submit any other documents required by investor, MI, etc. Adjust closing date as needed What We Do Review and negotiate offer Respond to offer within 10 business days Submit file to investor as required Submit file to MI company as required Contact realtors every 30 days to discuss list price 52

53 Closing the Deal 6. Investor Decision Come to an agreement on the terms of the offer and determine the closing date. Seller agrees Investor Approval Mortgage Insurance approval Jr. Liens Issue short sale approval Buyer agrees 53

54 Closing the Deal 7. Closing What You Do Close by date on Approval Notify Negotiator of any changes Provide final HUD1 within 48 hours of closing for approval Make sure relocation incentive is on final HUD1 as credit to borrower What We Do Work with agent and title co to facilitate closing Manage any post approval changes Follow up with real estate agents for updates on closing and buyers financing. 54

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56 Key Numbers Short Sale Hotline Homeowners Assistance Team (HAT) at (866) Homeowner Support Specialist Hotline (HOSS) (855) Fixed 1 st & 2 nd Lien Fax: HOST.CitiLinkdocs@citi.com Home Equity Line of Credit Fax: HOST.CUSTOMdocs@citi.com OneMainFinancial or CitiFinancial* Fax: HOST.Networkdocs@citi.com 56

57 Understanding Short Sales Information to Help You and Your Clients in the Short Sale Process March 2013

58 Three Key Steps for Real Estate Agents Engage Homeowners Early 1 Find out if the homeowner owes more than the home s fair market value. Discuss short sale opportunities during initial conversations with the homeowner. If the homeowner would like to better understand their options or initiate the short sale themselves, encourage them to call Customer/Agent Care at Explain the short sale process and how it can help avoid foreclosure. Contact Bank of America Before the Home Is Listed 2 Initiate the short sale in Equator even if you don t yet have an offer. The homeowner may be required to contact Customer/Agent Care to discuss participation in one of our preapproved price short sales, such as HAFA. If the homeowner isn t eligible for a preapproved price short sale, the next action is to market the home, obtain an offer and initiate new short sale in Equator. 3 Complete Required Tasks on Time Make sure all tasks are completed as soon as possible in Equator. Provide necessary documents as soon as possible to keep the process moving forward. Communicate with your short sale specialist via Equator to reduce delays. 58 Not intended nor authorized for consumer distribution. Bank of America: Proprietary Bank of America Corporation

59 $ Offer $ Short Sale Overview You get a huge timeline benefit by completing steps in advance of your offer. Initiating before offer Initiation Borrower Outreach Document Collection/ Valuation Marketing Offer Submission Offer Analysis Closing Program Eligibility Review Collect Homeowner Documents, Determine Home Value & Sign Program Agreement List Home for Sale Submit Offer Decision in as few as 10 days!* * HAFA only Initiating after offer Initiation Document Collection/ Valuation Offer Analysis Closing HAFA Interest? Collect Documents. Determine Home Value Negotiate Offer, Submit to Investor, Renegotiate 59 Not intended nor authorized for consumer distribution. Bank of America: Proprietary Bank of America Corporation

60 Short Sale Tips Getting Answers to Short Sale Questions 1 Your short sale specialist Send a message via Equator by selecting the negotiator (or closing officer) in the "To" field and providing details of your issue. You should receive a response within two business days. If there's been no answer after that time, you can contact... 2 The short sale team lead Send a message via Equator to explain your issue. You can select the team lead from the drop-down menu in the "To" field when composing an Equator message. Allow two business days for a response. If you still do not have an answer, you can call... Short Sale Customer/Agent Care 3 Call to explain your issue. Short Sale Customer/Agent Care is available Monday Friday 8 a.m. to 10 p.m., and Saturday 9 a.m. - 5:30 p.m. Eastern. If you have an urgent request, such as a foreclosure sale date within 48 hours, please call Customer/Agent Care at any point in the process. 60 Not intended nor authorized for consumer distribution. Bank of America: Proprietary Bank of America Corporation

61 How can I learn more about short sales? Short Sale Agent Resource Center bankofamerica.com/shortsaleagent Important news and updates about the short sale process and enhancements Online subscriptions to keep you informed via updates Free webinar replays Education library of important documents, including tips to a successful short sale Events Important links Contact information 61 Not intended nor authorized for consumer distribution. Bank of America: Proprietary Bank of America Corporation

62 Screenshots are the exclusive property of Equator, LLC and used herein under limited license for Bank of America training purposes only. Any distribution, reproduction, derivative, description or account of the screenshots is expressly prohibited without the express written consent of Equator, LLC Equator, LLC. All rights reserved. Not intended or authorized for consumer distribution. Bank of America, N.A., Member FDIC. Equal Housing Lender Bank of America Corporation.

63 Discussion/Questions U.S. Department of the Treasury Homeownership Preservation Office March 2013 Making Home Affordable 63