Home Affordable Foreclosure Alternatives. September 2011 Making Home Affordable

Transcription

1 Home Affordable Foreclosure Alternatives September 2011 Making Home Affordable

2 Home Affordable Foreclosure Alternatives ti HAFA This presentation will cover the following: 1 Welcome 2 Treasury HAFA Overview & Update 3 GSE Overview & Update 4 Servicer Overview & Update 5 Discussion/Questions September 2011 Making Home Affordable 2

3 Home Affordable Foreclosure Alternatives HAFA Overview September 2011 Making Home Affordable 3

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 incursnoout of pocketno 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 September 2011 Making Home Affordable 4

5 HAFA Advantages HAFA has key benefits for the real estate professional. Ability to market property as pre approved short sale Sales commission cannot be changed once established Ability to escalate difficult cases Transparency in the short sale process Foreclosure cannot take place while the homeowner is being considered for HAFA Servicer will assign a relationship manager to work with the homeowner September 2011 Making Home Affordable 5

6 What are the Goals of HAFA? Key Components of the Program Goal 1 Provide assistance to homeowners who need to transition to more affordable housing. Release of subordinate liens and personal l liability. Financial incentives for homeowners, investors and servicers. Goal 2 Standardize & streamline the short sale process. Uniform documents. Specified response times and timeframes. Upfront disclosure of short sale terms and conditions. September 2011 Making Home Affordable 6

7 HAFA by the Numbers HAFA is growing gin scope and influence. Source: Making Home Affordable Program Performance Report Through August, 2011 September 2011 Making Home Affordable 7

8 HAFA Resources Get help with questions about HAFA at September 2011 Making Home Affordable 8

9 Trusted Advisors di Escalate Tough Cases HAMP Solution Center (HSC) helps trusted advisors with cases that are difficult to resolve. September 2011 Making Home Affordable 9

10 MakingHomeAffordable.gov September 2011 Making Home Affordable 10

11 More Help for Struggling Borrowers Foreclosure Alternatives Short sale Deed-in-lieu Deed-for-Lease 11

12 Leave the home: Short sale A short sale, also known as a pre-foreclosure sale, is when a borrower sells a home for less than the balance remaining on the mortgage. If the mortgage company agrees to a short sale, a borrower can sell the home and pay off all (or a portion of) the mortgage balance with the proceeds. These borrowers may also be eligible for the government s Home Affordable Foreclosure Alternatives Program (HAFA) which offers short sale and DIL options. A short sale is an alternative to foreclosure and may be an option if a borrower: Is ineligible to refinance or modify the mortgage Is facing a long-term hardship Is behind on mortgage payments Owes more on the home than it s worth Has not been able to sell the home at a price that covers what is still owed on the mortgage Can no longer afford the home and is ready or needs to leave 12

13 Leave the home: Deed-in-Lieu of foreclosure A Deed-in-Lieu of Foreclosure (DIL) is where a homeowner voluntarily transfers the ownership of a property (the title and all property associated with it) to the owner of the mortgage in exchange for a release from the mortgage loan and payments. A DIL may be an option if a borrower: Is ineligible to refinance or modify the mortgage Is facing a long-term hardship Is behind on mortgage payments Owes more on the home than it s worth Doesn t want to sell the home or hasn t been able to sell the home Can no longer afford the home and is ready to leave 13

14 More Help for Struggling g Borrowers Outreach Fannie Mae Mortgage Help Centers open in 11 markets Thousands attend foreclosure prevention events KnowYourOptions.com provides interactive help 14

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16 Freddie Mac Short Sale Overview Mark Johnson Loss Mitigation Manager October 12, 2011

17 Everyone Benefits From A Short Sale Homeowner Prevents foreclosure Avoids deficiency judgment Satisfies the debt for less than full amount Avoids stigma of foreclosure Servicer Reduces NPL servicing costs Receives potential incentives Investor Reduces potential losses Avoids REO and associated expenses MI Company Reduces claim losses Avoids REO and associated expenses Freddie Mac 17

18 Freddie Mac Short Sale Options Eligibility Criteria HAFA Programs Delinquent more than 60 days Meet HAMP eligibility criteria Evaluated for other home retention ti options Classic Short Sale & DIL Borrowers who are delinquent or in danger of imminent default No need to be HAMP eligible Borrower Not required to make any contribution Maximum possible contribution toward Contribution any deficiency from the sale in cash and/or promissory note Documentation Property Valuation Uniform documents: Short sale agreement Request for short sale Approval and denial letters Deed-in-lieu agreement Servicer orders a property valuation using the 90-day as is marketing value SAI Uniform documentation Form 710 Same as HAFA Incentives Servicer Borrower Price is based on a market sales comparison using the as-is value $2,200 $3,000 $2,200 Freddie Mac 18

19 Challenge: Many Real Estate Agents Are New To The Short Sale Experience Most common challenges: MI and junior liens are part of the negotiation process completed short sale package Postponements and pending foreclosure sale Deficiency Judgments, Tax implications, Arms Length Affidavit Freddie Mac 19

20 Challenge: Getting Agreement Among Multiple Parties Parties in a Typical Short Sale Transaction These have up to three times more parties involved than a typical real estate transaction Agents Seller Loan Servicer Mortgage Investor Mortgage Insurer Buyer Housing Counselor Primary Pool Junior Lienholders HOA Liens Buyer s Lender Freddie Mac Source Effective Short Sale Workouts, Genworth Financial, Inc 20

21 Freddie Mac Is Improving Short Sale Processes & Increasing Awareness Streamlined document requirements Paying agents full commission Providing quicker decisions Implemented training programs for real estate agents Debuted an online learning center Participating in borrower workshops nationwide Freddie Mac 21

22 Real Estate Professional Presentation on HAFA Short Sales Date: October 12,

23 Chase Foreclosure Alternatives Chase Foreclosure Alternatives Map Short Sale High Level Process Flow Short Sale Consideration Short Sale Document Requirements HAFA Program Overview Approval of a HAFA Short Sale HAFA SSA Timeline HAFA Short Sale Benefits HAFA Short Sale Buyer HAFA Program Comparison Chase List Assist Short Sale Webpage How Can You Help Us? Short Sale Resources 23

24 Chase Foreclosure Alternatives Map 24

25 Short Sl Sale Process Flow Entry Points Live Transfers Liquidation Process Overview Customer Care Document Intake/Setup List Assist Negotiation Quality Reviews Closing Collections Strategic t Theme Pre-Qualification Underwriting System Maintenance Modification Denials Document Review Customer Contact CHOC s Missing Document Letters Borrower File Setup Outreach Loan Assignment Inbound Triage HAFA Pre-Qual SSA Production List Price Validation Document Perfection Denial HAFA/BAU Review Offer & HUD Negotiation NRV Calculation Approval/Denial Communication Real Time Reviews HAFA Compliance GSE Compliance Investor Policy Internal Policy Cash Posting & Instructions CBR Coding HAFA Maintenance Loss Recognition Customer Correspondence Offer Listed 25

26 Short Sale Sl Consideration When is a short sale considered? When the value of the property is less than the outstanding balance of the loan. When the customer is unable to make their mortgage gg payments py due to a hardship and all other retention options have failed. How does a customer qualify for a short sale? Provide hardship information and proof of hardship. Financial i l difficulties (loss of employment, reduction in income, etc.) The loan is delinquent or will be an Imminent Default loan. 26

27 Short Sale Document Requirements Borrower Real lett Estate Professional Hardship Affidavit/RMA Listing agreement (If property is Dodd Frank Certification (HAFA) already on the market) Letter from any junior lien Proof of MLS holder(s) agreeing to accept a Sales/Purchase Contract with all settlement to release their applicable addenda lien(s) 3 Comparable Active Listings Authorization to provide and release information allows agent or designee to discuss the account with Chase Financial information if required by the investor or mortgage insurer (MI): Proof of Income Twomost recent bank statements Last two years tax returns HUD (Estimated dclosing Statement) 27

28 HAFA Program Overview The Home Affordable Foreclosure Alternatives (HAFA) Program provides additional options to avoid foreclosure and offersincentives to borrowers, servicers and investors whoemploy liquidation strategies (short sale and deed in lieu) instead of pursuing foreclosure. Pre Sale (SSA) The borrower will receive the Short Sale Agreement (SSA) with related documentation. It will contain the acceptable list price and the expiration date of the SSA. The borrower must list the property with a real estate agent at a price that will support the minimum net proceeds. Offer (RASS) When an offer is received, the borrower will submit a Request for Approval of Short Sale (RASS), along with the required documentation to be approved within 3 business days. The servicer will approve the sale, provided it will generate the minimum required net proceeds and will comply with the terms given in the Short Sale Terms and Conditions Agreement. Alternative Rass (ARASS) If an offer to purchase a property is made before the servicer provides an SSA, the borrower will submit an Alternative RASS for the servicer ss consideration. 28

29 HAFA Short Sale Approval Process Alternative Request for Approval of Short Sale (Alt RASS) Negotiator compiles all of the required documentation. Negotiator will evaluate offer presented and determine if any negotiation is required for the price, closing costs, etc. Negotiator completes a gain & loss analysis onceall negotiations arecomplete. The gain loss analysis is presented for short sale approval and may require investor and/or mortgage insurance (MI) carrier approval(s) prior to final Chase internal approval. Short Sale Approval (SSA) Pre Contract Specialist compiles all of the required documentation. Pre Contract Specialist evaluates for HAFA eligibility. Pre Contract Specialist completes a gain & loss analysis once they have values and the HAFA documents. The gain & loss analysis is presented for SSA and may require investor and/or mortgage insurance (MI) carrier approval(s) prior to final Chase internal approval. 29

30 HAFA Short Sale Agreement Timing Borrower must contact Chase & accept HAFA After Borrower responds to HAFA solicitation, Chase must complete and send SSA to borrower SSA Marketing Period* Borrower submits offer to Chase along with the completed RASS Chase must approve/deny offer Trigger Solicitation 14 days 45days 120 days 3 days 10 days *Chase willnot permit an extension after the 120 day SSA marketing period expires 30

31 HAFA Short Sale Benefits HAFA uses borrower financial and hardship information previously collected for consideration of a HAMP loan modification. Allows borrowers to receive pre approved pp short sales terms before listing the property. Requires borrowers to be fully released from future liability for all mortgage debt (no cash contribution, promissory note, or deficiency judgment is allowed). Provides $3,000 for borrower relocation assistance. Provides a $6,000 aggregate g cap for subordinate mortgage gg lien holders. 31

32 HAFA Short Sale Buyer Sales contract must be executed with all appropriate addenda. Buyer(s) must have pre approval or commitment letter on letterhead from a lender. Short Sale must be an Arm s Length transaction.* No agreements permitted between the Seller and the Buyer that the Seller will remain in the property as a tenant or later obtain title or ownership of the property. Purchaser may not sell the property within 90 days of closing. * Servicers have the discretion to approve sales to non profit organizations with the stated purpose that the property will be rented or resold to the borrower, so long as all other HAFA program requirements are met. 32

33 HAFA Program Comparison Treasury HAFA Fannie Mae HAFA Freddie Mac HAFA Effective date April 5, 2010 December 31, 2012 August 1, 2010 December 31, 2012 August 1, 2010 HAFA short HAMP eligible (delinquent or All Treasury eligibility criteria, All Treasury eligibility criteria, sale eligibility imminent default) plus: plus: Evaluated for HAMP and other Not considered strategic default Borrower must be 60 days retention options (able but unwilling to make delinquent Not in an active HAMP Trial Plan payments) Unencumbered assets and cash Chapter 7 & 13 active Unencumbered assets and cash reserves less than the greater of HAFA deed in lieu eligibility bankruptcies reserves less than the greater of Disqualified for HAMP or $5,000 or three times the requested short sale prior to monthly mortgage payment evaluation for HAMP Low surplus income Vacant no more than 12 months No foreclosure sale scheduled or prior to Short Sale Agreement, reasonably able to be scheduled Alternative Rass or DIL within 60 days Agreement. properties where no pending At servicer discretion, according to investor requirements Property value Must assess value in accordance with investor guidelines judgment, judgment, hearing or summary judgment is scheduled within 60 days Property listed for at least 120 days at market price, except in specific circumstances DIL must accelerate acquisition of property by Fannie Mae, versus foreclosure No foreclosure sale scheduled within 30 days, unless approved by Fannie Mae Borrower has been evaluated for deed for lease, if they want to lease the property BPO or appraisal (if required), within 90 days $5,000 or three times the monthly mortgage payment Property listed for at least 120 days at market price under short sale agreement HAFA DIL approved by Freddie Mac Interior BPO required, within 30 days 33

34 HAFA Program Comparison 34

35 List Assist Department Chase List Assist program was designed to proactively reach out to customers who have properties listed for sale to assist through the marketing process and collect all required documentation prior to the offer in an effort to expedite approval. Through our List Assist team, we have enhanced our short sale efforts and streamlined the process by: Proactively reaching out to homeowners who have listed their property. Working to gather the documents, provide guidance on property value and actively market ktthe home. Establishing a dedicated team working closely with real estate agents on offers and valuations. List Assist agents will also take incoming calls from agents and Borrowers to provide information and instant contact with a Liquidation agent. The List Assist agents will explain to the borrower their options, review the short sale process and request the needed documentation to move forward. 35

36 Short Sale Webpage The Short Sale website is easily accessed from the Chase Home page and provides the short sale information packet and FAQ information about the Chase Short Sale process. The site can be accessed through 36

37 How Can You Help Us? Submit all required documentation as soon as possible: If an offer is not received on the property, provide an executed listing agreement and MLS listing history. If offer has been received, provide all information discussed previously. Help the homeowners in negotiations with subordinate lien holders. Make sure all required signatures are on the relevant documents. Set reasonable expectations on timelines and valuations. Ensure that the proposed transaction is at Arm s Length. Make every effort to ensure title and escrow are scheduled to close within the approved timeframe. 37

38 Short Sale Resources Chase Borrowers can be referred to the following: Toll free number: Or Access the Chase Short Sale website On line at Or Locate a ChaseHomeownership Center On line at chase.com/homeownershipcenter Short Sale Fax Line:

39 Default Liquidations Short Sales Abel Fregoso, Jr Vice President National Field Short Sales October 2011

40 Potential for Acceleration Short Sale Activity From a rate of 7.8% (Q1 2009), residential delinquency rates continued to rise to a high of 11.3% (Q2 2010). During the last 6 months of 2010 rates declined to a low 10.0% (Q4 2010). Q reflected an upward trend to 10.2% - Q pending. Revisions to the 2010 and Q1/Q GDP numbers show less economic activity than previously reported, and no material improvement in new jobs or the current level of unemployment the factors will remain a strong influence on the residential housing market. 40

41 Wells Fargo s Loan Servicing by Investor Type Wells Fargo is primarily a Lender and a Servicer, with 81% of the loans serviced by Wells Fargo, owned by outside investors. 69% 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. * Fannie Mae = FNMA, Freddie Mac = FHLMC, Ginnie Mae = GNMA Wells Fargo Loan Servicing By Investor Ownership (as of 2nd Quarter 2011) 1 19% 69% 12% 1 Includes all residential mortgage loans serviced within Wells Fargo (WFHM, WFF, HE) and Wachovia (including PaP) 19% of the loans serviced by Wells Fargo are also owned by Wells Fargo: Roughly 26% of this is Wachovia Pick-a- Pay, which came to Wells Fargo as part of the Wachovia acquisition. A portion is also Wells Fargo Home Equity and Wells Fargo Financial. 12% 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. Confidential. For review only in Wells Fargo approved meetings. Not to be copied, shared or distributed beyond members of the approved meeting.

42 Strategic Partnership Wells Fargo and Our REALTOR Partners Wells Fargo s primary concern and obligation is to our customers and investors. Our goal is to exhaust all efforts to help customers remain in their homes through various workout options. Once home retention efforts are no longer an option, Wells Fargo continues to work diligently to provide alternatives to foreclosure through short sales or deeds-in-lieu of foreclosure. Our last resort is to foreclose. Our partnership with experienced real estate brokers and their agents, familiar with the management of distressed real estate, is key to our success and commitment to quality service. Our REALTOR Partners expertise helps us to deliver timely solutions to assist customers, minimize losses to investors, and help to rebuild and stabilize our communities. These are unprecedented times in our industry, and now more than ever it is critical that we partner together as leaders in driving solutions and results to help in the recovery of a strong housing market. Our REALTOR Partners help us by providing their: - Familiarity with local market trends and community goals - Established relationships with the real estate community - Expert knowledge in short sale and REO liquidations - Strong customer service and communication skills 42

43 Short Sales: Excellent Alternative to Foreclosure 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 or Investor pays some closing costs. Investor Benefits 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. 43

44 Our HAFA Strategy HAMP Fallout Regular Short Sales HAMP Eligible Filter incoming workload using consistent metrics to control and direct the inventory Determine Path HAFA Inventory Proprietar y Short Sale Inventory Consider HAFA first; proprietary p Short Sales / DIL second HAFA inventory and the Proprietary inventory are going to remain distinctly separate. 44

45 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. 45

46 Partnering to Improve the Short Sale Process We have worked to improve our processes and communications regarding short sale transactions. We hear your concerns and are working diligently to reduce the completion timeline and improve communication. Internal Improvements to Short Sale Process Staff resources have been increased by 57% over the last 12 months to ensure forecasted volumes can be managed. Proactive marketing efforts to provide information and education on short sale workout alternatives to customers. Wells Fargo is leveraging new technology (Equator) to provide a rules-based work flow system with direct portal access for agents and customers. Process Re-Engineering project for all operation sites will allow for alignment between sites and investors and best practices. Our field negotiator team and branch offices are expanding to support more difficult markets for customer face-toface assistance, and for seminars and training for agents. Integrating ServiceLink and Stewart Lender Services as 3 rd party providers for Short Sales overflow. Automated Valuation requests for Short Sales Marketing campaigns. Short Sales Fraud monitoring through CoreLogic. Wells Fargo is Persistent and Continuously Focused on Third Parties to Improve the Short Sale Process Wells Fargo has led discussions with Fannie Mae and Freddie Mac, resulting in increased delegation authority, foreclosure prevention, and streamlining processes. These efforts have resulted in industry wide solutions. We have partnered with Treasury to provide guidance on rules for the HAFA program. Expanding our REALTOR Finder Tool to leverage experienced agents in all markets for referring our customers. Participation in Congressional Hearings and other government meetings to further educate and inform on existing processes and concerns. Communication and Education Multiple communication materials have been prepared for HMC s, Agents, Customers and Real Estate Consultants Cine-meetings were conducted to provide consistent information across the country to address concerns and provide detailed steps necessary to complete a successful short sale. 46

47 Challenges in the Short Sale Process Portfolio is serviced for other investors, and may require obtaining investor approval from Freddie Mac, Fannie Mae, etc. Mortgage Insurers & Junior Lien Holders take longer to respond and may want cash contributions or promissory notes from the customer. Not all customers have a valid hardship, however many seek to dispose of their property via a short sale transaction. Not all buyers can be qualified to purchase bad credit and/or limited cash for closing. High HAFA fallout rates; HAFA program limits qualified properties, however, can review for proprietary programs. Technology in market place for short sale processing is in the early stage of adoption industry wide and still needs improvement. Some jurisdictions and investors are not allowing f l l t t 47

48 Understanding Short Sales Information to Help You and Your Clients in the Short Sale Process

49 Short Sale Overview How the Process Works Bank of America is the negotiator between the seller and the investor. Many loans have multiple l investors who must be satisfied. We have 500+ investors, and each can set different policies. Communication Investors (Own the Loans) Real Estate Agent (Selling the Property) 1 st lien investors Mortgage insurer 2 nd lien investors Home equity loans (Mortgage Servicer) Services the distressed homeowner Has an obligation to uphold investor requirements Represents the distressed homeowner Identifies and obtains the releases of all non-bank of America liens Communication 49 Not intended nor authorized for consumer distribution. Bank of America: Proprietary Bank of America Corporation

50 Short Sale Overview Two Paths Homeowners have two paths to successfully complete a short sale. I do not have an offer to purchase my home Homeowner Wanting to Short Sell I have an offer to purchase my home 50 Not intended nor authorized for consumer distribution. Bank of America: Proprietary Bank of America Corporation

51 Short Sale Overview I do not have an offer to purchase my home Homeowner Wanting to Short Sell Initiating a Short Sale Before There s an Offer Provides numerous benefits if the homeowner is eligible and qualifies for a pre-offer program. Homeowner Benefits $ - Relocation assistance. Deficiency may be waived. The mortgage debt may be settled through the program. Cash contributions or promissory notes may not be required. Note: When the homeowner initiates a short sale before there s an offer, all program options are explored: HAFA, cooperative, traditional, etc. Process Benefits Foreclosure hold, if applicable (subject to specific conditions). Faster decisions within 10 business days once an offer is submitted. Agent Benefits Suggested list price is provided prior to marketing the home. Most elements of the short sale process are addressed upfront (including commission) rather than at the end. 51 Not intended nor authorized for consumer distribution. Bank of America: Proprietary Bank of America Corporation

52 The Short Sale Process a Detailed Look Path No. 1: Initiating Without an Offer The steps involved when you initiate a short sale before you have an offer. Initiation Borrower Outreach 1. Initiate short sale and begin negotiating any 2 nd liens not serviced by Bank of America. 2. Upload the 3 rd Party Authorization. Complete the Borrower Contact Information task. If the homeowner e qualifies for HAFA, continue to Document Collection Underwriting Valuations Marketing Offer Submission Offer Analysis 3. Upload required documents to the Equator Library within 14 calendar days. 4. The short sale and the homeowner s financial situation receive a deeper review. No agent action required. 5. Coordinate access to the property, if needed. Notify the short sale specialist when you have mailed and uploaded the signed Short Sale Agreement. 6. List and promote the property to potential buyers for up to 120 calendar days. 7. Submit the short sale offer and supporting documentation. 8. Come to an agreement with the investor on terms of offer and determine closing date. Closing 9. Complete the short sale by the date noted in the approval letter. 52 Not intended nor authorized for consumer distribution. Bank of America: Proprietary Bank of America Corporation

53 The Short Sale Process a Detailed Look Path No. 2: Initiating Without an Offer The steps involved when you initiate a short sale before you have an offer. Initiation Borrower Outreach 1. Initiate short sale and begin negotiating any 2 nd liens not serviced by Bank of America. 2. Upload the 3 rd Party Authorization. Complete the Borrower Contact Information task. If What the homeowner if the homeowner e qualifies efor does HAFA, not continue qualify? to Document Collection Underwriting Valuations Marketing Offer Submission Offer Analysis 3. Upload required documents to the Equator Library within 14 calendar days. Homeowner and agent will be notified. 4. The short sale and the homeowner s financial situation receive a deeper review. No agent action required. Equator record will be closed. Agent and homeowner should market the property. 5. Coordinate access to the property, if needed. Notify the short sale specialist when you have mailed and uploaded the signed Short Sale Agreement. Agent should initiate a new short sale in Equator once there is an offer on the property. 6. List and promote the property to potential buyers for up to 120 calendar days. 7. Submit the short sale offer and supporting documentation. 8. Come to an agreement with the investor on terms of offer and determine closing date. Closing 9. Complete the short sale by the date noted in the approval letter. 53 Not intended nor authorized for consumer distribution. Bank of America: Proprietary Bank of America Corporation

54 Short Sale Overview The Process Steps Are the Same in Both Paths But you get a huge timeline benefit by completing steps in advance of your offer. Path No. 1: Initiating before offer Initiation Borrower Outreach Program Eligibility Review Document Collection Collect Homeowne r Documents Valuation Determine Home Value & Sign Program Agreement Marketing List Home For Sale $ Offer $ Offer Analysis Submit Decision Offer in 10 Days!* Closing * HAFA only. For other pre-offer programs, the time may vary. $ Offer $ Path No. 2: Initiating after offer Initiation Borrower Outreach Document Collection Valuation Offer Analysis Closing HAFA Interest? Collect Documents Determine Home Value Negotiate Offer, Submit to Investor, Renegotiate 54 Not intended nor authorized for consumer distribution. Bank of America: Proprietary Bank of America Corporation

55 Short Sale Overview Comparison of Paths General Qualifications Timeline for Decisions After Offer Is Received Cash/Promissory Note Deficiency Pursued Foreclosure Holds Path 1: Before There s an Offer Each customers situation is considered separately by investors. For HAFA program features including qualifications please refer to HAFA Education Guide. HAFA - within 10 business days. For other pre-offer programs, the time may vary. HAFA none. For other pre-offer programs, the investor/insurer may require. HAFA none. For other pre-offer programs, the investor/insurer may require. Auto hold once Short Sale Agreement is executed (subject to specific conditions) Path 2: After There s an Offer Each customers situation is considered separately by investors. 50 days on average. The investor/insurer may require. The investor may retain the right. Vary by investor; require investor approval. Suggested List Price Provided. Not provided. Approval/ Closure Rates High after qualification. Low-medium. Relocation Assistance HAFA $3,000. For other pre-offer programs, the amount will vary. None. Unrealized Short Sale Optional deed in lieu of foreclosure. Optional deed in lieu of foreclosure. 55 Not intended nor authorized for consumer distribution. Bank of America: Proprietary Bank of America Corporation

56 Short Sale Tips Three Key Steps for Real Estate Agents 1 2 Contact Initiate Complete 3 Engage Homeowners Early 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 Care at Explain the short sale process and how it can help avoid foreclosure. Bank of America Before the Home Is Listed Initiate the short sale in Equator even if you don t yet have an offer. The homeowner may be required to contact Customer Care to discuss participation in one of our pre-offer programs, such as HAFA. If the homeowner isn t eligible for a pre-offer program, then next action is to market the home, obtain an offer and initiate new short sale in Equator. 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. 56 Not intended nor authorized for consumer distribution. Bank of America: Proprietary Bank of America Corporation

57 bankofamerica.com/realestateagent Bank of America s Real Estate Agent Resource Center 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 57 Not intended nor authorized for consumer distribution. Bank of America: Proprietary Bank of America Corporation

58 Understanding Short Sales Commitment to Continued Improvement Bank of America clearly recognizes the need for continued improvement in the short sale process and is committed to identifying new and different ways to make the process transparent and efficient. New Approaches To Reduce Processing Times Ongoing collection of feedback on process, people, and technology Right-sized staff to meet service level expectations; dedicated team of short sale professionals Enhanced our technology; monthly upgrades ongoing Resources for short sale education Where to Locate Additional Information Real Estate Agent Resource Center bankofamerica.com/realestateagent Dedicated Customer Care Monday Friday 8 a.m. to 10 p.m.; Saturday 9 a.m. to 5:30 p.m. Eastern. For homeowners: Bank of America Home Loan Assistance bankofamerica.com/homeloanhelp 58 Not intended nor authorized for consumer distribution. Bank of America: Proprietary Bank of America Corporation

59 Questions? 59 Not intended nor authorized for consumer distribution. Bank of America: Proprietary Bank of America Corporation