Home Affordable Foreclosure Alternative (HAFA) Eligibility Worksheet

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1 Loan Look Up Home Affordable Foreclosure Alternative (HAFA) Eligibility Worksheet HAFA: A Making Home Affordable (MHA) Initiative Determine the type of first lien (Fannie Mae, Freddie Mac or Treasury) and servicer to check HAFA participation and identify applicable eligibility criteria. You will need last 4 digits of borrower s social security number (and borrower permission) to search Fannie Mae and Freddie Mac loans. Note FHA, VA and RHS loans subject to relevant agency guidelines and are not participating in HAFA at this time. Use the following links for the loan lookup step: Fannie Mae Loan Lookup: Freddie Mac Loan Lookup: Servicer Lookup: Basic HAMP/ HAFA Eligibility Checklists Note: If eligible and not already denied/failed, borrower will generally be offered HAMP loan modification option while HAFA short sale or deed-in-lieu is considered. Borrower may deny modification option. Basic HAMP Eligibility Checklist (Loan Modification) Borrower must meet ALL of the conditions as follows: First loan must have originated on or before January 1, 2009; Borrower must be able to document a financial hardship (Use Request for Mortgage Assistance (RMA) or Hardship Affidavit ); Borrower s current unpaid 1 st loan principal balance is equal to or less than $729,750 (1 unit), $934,200 (2 units), $1,129, 250 (3 units) or $1,403,400 (4 units); Single family one- to four-unit property; and The property securing the mortgage is not condemned.

2 HAMP Tier 1 Eligibility Use Basic HAMP Eligibility and servicer to verify the following criteria are met: Borrower occupies single family property as principal residence: Property was originally non-owner occupied, currently borrower s principal residence and documented; Borrower displaced and plans to occupy in the future (e.g. PCS military deployment, out of area job transfer, etc.). Borrower does not own other single family properties. Borrower s PITI (principal, interest, tax and insurance and HOA if applicable) payment must exceed 31% of their gross income; Borrower delinquent or in danger of falling behind. Loans currently in foreclosure are eligible; Not previously modified under HAMP. HAMP Tier 2 Eligibility Borrower may be eligible if (i) qualify under basic HAMP eligibility; (ii) did not qualify or failed to receive a modification under HAMP Tier 1; and (iii) the following criteria are met if applicable: Single family property owner-occupied or rental property; Rental property used for rental purposes only, not occupied by borrower as principal residence, second home, vacation home or otherwise; Rental property may be considered if: Occupied by tenant as principal residence; Occupied by borrower s legal dependent, parent or grandparent as principal residence without rent being charged or collected; Available for rent and vacant. Seasonal rental used by borrower not eligible. If loan is secured by rental property, borrower must make the following certifications: o o Borrower certifies he/she intends to rent property for at least five years following any permanent modification. Borrower may still sell property, occupy it as principal residence, or permit any dependent, parent or grandparent to occupy the property as such party s principal residence with no rent charged or collected; and Borrower does not own more than five single family properties; Borrower had previous permanent modification under HAMP Tier 1, lost good standing under a HAMP Tier 1 modification entered into before June 1, 2012, and at least 12 months have passed since HAMP Tier 1 effective date or the borrower has experienced a change of circumstance; Borrower defaults on HAMP Tier 1 Trial Period Plan or not offered a HAMP modification prior to June 1, 2012 (non-approval not due to fraud of noncompliance with Section 1481); Borrower delinquent on rental property loan (two or more payments due and unpaid) or default reasonable foreseeable (rental properties not eligible for imminent default consideration). Loans in foreclosure are eligible; or Corporations, partnerships, LLC or other business entities are not eligible. If borrower met all above criteria, then they are eligible and may qualify for a HAMP loan modification.

3 Basic HAFA Eligibility Checklist (Short Sale or Deed-in-Lieu Eligibility) Note: If eligible and not already denied/failed, Borrower will generally be evaluated for HAMP loan modification before a HAFA short sale or deed-in-lieu is offered. Borrower may deny modification and move direct to foreclosure alternative option. Borrower must meet ALL of the conditions as follows: Loan is delinquent or default reasonably foreseeable (Loan can be current and a loan in foreclosure is eligible); First loan must have originated on or before January 1, 2009; Borrower must be able to document a financial hardship. (Use Request for Mortgage Assistance (RMA) or Hardship Affidavit ); Borrower s current unpaid 1 st loan principal balance is equal to or less than: o $729,750 (1 unit) o $934,200 (2 units) o $1,129,250 (3 units) o $1,403,400 (4 units); The property is not condemned. If borrower met all above criteria and loan servicer is participating in HAFA, then they are eligible for a Treasury HAFA short sale or deed-in-lieu. If the first loan is owned or guaranteed by Fannie Mae or Freddie Mac and the borrower met the above criteria then you must proceed to either the Fannie Mae or Freddie Mac HAFA Eligibility Checklists. Additional Eligibility for HAFA Deed-In-Lieu: Borrower is interested in Deed-for-Lease/or repurchase program. Note: This form should be used to evaluate borrower s eligibility for HAMP and/or HAFA based on federal guidelines published by the U.S. Treasury Department, Fannie Mae and Freddie Mac. Final program qualification can only be confirmed by the loan servicer and borrowers may wish to confirm the result of their eligibility positive or negative with their loan servicer.

4 Fannie Mae Standard Short Sale/HAFA II Eligibility Checklist Note: If eligible and not already denied/failed, borrower will generally be evaluated for HAMP loan modification before a short sale or deed-in-lieu is offered. Borrower may deny modification and move direct to foreclosure alternative option. Remember these are general guidelines and each servicer and/or investor may have their own policies that the borrower will need to follow. Contact servicer early in the evaluation process for best results. Borrower must meet ALL of the conditions as follows: Qualify for HAMP Modification thru December 31, 2013: First loan must have originated on or before January 1, 2009; Borrower must be able to document a financial hardship (Use Form 710 Uniform Borrower Assistance Form ); Borrower s current unpaid 1 st loan principal balance is equal to or less than $729,750 (1 unit), $934,200 (2 units), $1,129, 250 (3 units) or $1,403,400 (4 units); Borrower s first loan monthly mortgage payment (PITI & HOA fees) must be greater than 31% of their gross income; Property is principal residence / owner occupied; single family 1-4 units Loan is delinquent or default reasonable foreseeable (also known as imminent default); loan can be current, borrower in foreclosure or bankruptcy may be eligible. Short Sale Eligibility: Property types primary residences, investment properties and second homes. Borrower must provide complete Borrower Response Package (income and hardship documentation) including Form 710 Uniform Borrower Assistance Form or customized equivalent documenting hardship unless qualifies for Streamlined Documentation; 31 days or more delinquent - all single family property types are eligible including principal residence, investment properties and second homes, regardless of occupancy status and property may be vacant but must not be condemned: o If borrower is either delinquent or in imminent default, servicer to evaluate for cash contributions based on borrower s delinquency status at that time and may also be reviewed at time of receipt of purchase offer. Exception: Active military service members with Permanent Change of Station (PCS) orders relocating from a primary residence purchased on or before June 30, 2012, are exempt from total monthly debt ratio requirement and cash or promissory note contributions. o Borrower cannot have cash reserves equal to or less than the greater of $10,000 or six times the borrower s total monthly payment (PITI & HOA), excluding retirement accounts. Streamlined Documentation - 90 days or more delinquent Borrower Response Package is not required if credit score is less than 620 as of evaluation date or service member received PCS order. No cash or promissory note requirement. Credit score cannot be more than 90 days old as of evaluation date.

5 Borrowers who are current or less than 31 days delinquent and meet imminent default requirements, may be eligible and must occupy as a principal residence and: o Complete Borrower Response Package including fully executed Form 710 or equivalent, documenting one hardship such as: Death of borrower or co-borrower; Long-term or permanent illness or disability of borrower or co-borrower or dependent family member; Divorce or legal separation of borrower or co-borrower; Distant employment transfer or relocation, greater than 50 miles one way from current primary residence to be closer to employment, including PCS order. o Total monthly debt-to-income ratio must be greater than 55%. Borrower can obtain new mortgage during hardship term if it involves new employment, distant employment transfer or receipt of PCS orders. Short Sale Affidavit (anti-fraud/arm s length transaction documentation) required at closing. Borrower cannot be participating in a third party program arranged short sale for a fee. Additional Eligibility for Fannie Mae Standard Deed-In-Lieu: Property to be listed in MLS with licensed real estate agent for at least 90 days at no more than 110% of market value and did not sell. (This requirement can be waived under extenuating circumstances) AND/OR 90 days or more delinquent Borrower Response Package is not required if credit score is less than 620 as of evaluation date or service member received PCS order. No cash or promissory note requirement. Credit score cannot be more than 90 days old as of evaluation date AND/OR. Borrower is interested in Fannie Mae s Deed-for-Lease (D4L) program Note: This form should be used to evaluate borrower s eligibility for HAMP and/or Standard Short Sales based on federal guidelines published by the U.S. Treasury Department and Fannie Mae. Final program qualification can only be approved by the loan servicer and borrowers may wish to confirm the result of their eligibility positive or negative with their loan servicer. Source: Fannie Mae Announcement SVC

6 Freddie Mac Standard Short Sale/HAFA II Eligibility Checklist Note: If eligible and not already denied/failed, borrower will generally be evaluated for HAMP loan modification before a short sale or deed-in-lieu is offered. Borrower may deny modification and move direct to foreclosure alternative option. Remember these are general guidelines and each servicer and/or investor may have their own policies that the borrower will need to follow. Contact servicer early in the evaluation process for best results. Borrower must meet ALL of the conditions as follows: Qualify for HAMP Modification thru December 31, 2013: First loan must have originated on or before January 1, 2009; Borrower must be able to document a financial hardship (Use Form 710 Uniform Borrower Assistance Form ); Borrower s current unpaid 1 st loan principal balance is equal to or less than $729,750 (1 unit), $934,200 (2 units), $1,129, 250 (3 units) or $1,403,400 (4 units); Borrower s first loan monthly mortgage payment (PITI & HOA fees) must be greater than 31% of their gross income; Property is principal residence / owner occupied; single family residence 1-4 units Loan is delinquent or default reasonable foreseeable (also known as imminent default); loan can be current, borrower in foreclosure or bankruptcy may be eligible. Short Sale Eligibility: Property type primary residence, investment properties or second homes. Borrower must provide complete Borrower Response Package (income and hardship documentation) including Form 710 Uniform Borrower Assistance Form or customized equivalent documenting hardship unless qualifies for Streamlined Documentation; 31 days or more delinquent - all single family property types are eligible including principal residence, investment properties and second homes, regardless of occupancy status and property may be vacant but must not be condemned: o If borrower is either delinquent or in imminent default, servicer to evaluate for cash contributions based on borrower s delinquency status at that time and may also be reviewed at time of receipt of purchase offer. Exception: Active military service members with Permanent Change of Station (PCS) orders relocating from a primary residence purchased on or before June 30, 2012, are exempt from total monthly debt ratio requirement and cash or promissory note contributions. o Borrower cannot have cash reserves equal to or less than the greater of $10,000 or six times the borrower s total monthly payment (PITI & HOA), excluding retirement accounts. Streamlined Documentation - 90 days or more delinquent Borrower Response Package is not required if credit score is less than 620 as of evaluation date or service member received PCS order. No cash or promissory note requirement. Credit score cannot be more than 90 days old as of evaluation date.

7 Borrowers who are current or less than 31 days delinquent and meet imminent default requirements, may be eligible and must occupy as a principal residence and: o Complete Borrower Response Package including fully executed Form 710 or equivalent, documenting one hardship such as: Death of borrower or co-borrower; Long-term or permanent illness or disability of borrower or co-borrower or dependent family member; Divorce or legal separation of borrower or co-borrower; Distant employment transfer or relocation, greater than 50 miles one way from current primary residence to be closer to employment, including PCS order. o Total monthly debt-to-income ratio must be greater than 55%. o Freddie requires that borrower must make cash contribution; exemption hardship death of borrower/wage earner and evaluation requirement. Borrower can obtain new mortgage during hardship term if it involves new employment, distant employment transfer or receipt of PCS orders. Short Sale Affidavit (anti-fraud/arm s length transaction documentation) required at closing. Borrower cannot be participating in a third party program arranged short sale for a fee. Relief for surviving spouse. Servicer cannot initiate or resume foreclosure if surviving spouse of service member, whose death was service related, is the owner, successor in interest or otherwise has title and resides in property as primary residence; Extension of Servicemember s Civil Relief Act foreclosure protection. Servicer cannot initiate or resume foreclosure for at least 12 months after service member is released from active duty or the date surviving spouse received notice of service-related death when release or receipt of notice occurs on or before December 31, Additional Eligibility for Freddie Mac Standard Deed-In-Lieu: Property to be listed in MLS with licensed real estate agent for at least 90 days at no more than 110% of market value and did not sell. (This requirement can be waived under extenuating circumstances.) 90 days or more delinquent Borrower Response Package is not required if credit score is less than 620 as of evaluation date or service member received PCS order. No cash or promissory note requirement. Credit score cannot be more than 90 days old as of evaluation date. No lease back program offered through Freddie Mac at this time. Note: This form should be used to evaluate borrower s eligibility for HAMP and/or Standard Short Sales based on federal guidelines published by the U.S. Treasury Department and Freddie Final program qualification can only be approved by the loan servicer and borrowers may wish to confirm the result of their eligibility positive or negative with their loan servicer. Source: Freddie Mac Single-Family Seller/Servicer Guide, Bulletin

8 Calculate Borrower Debt-to-Income Ratio In some cases, the fields in bold font may not be included in the monthly principal and interest mortgage payment amount per borrower s monthly statement. You may verify what is included in the monthly mortgage payment from the most recent mortgage payment coupon/statement to minimize calculation errors. You can also visit Tools, Modification Evaluator. Monthly Mortgage Payment Gross (Pre-Tax) Monthly Income Monthly Principal and Interest $ Borrower #1 $ Insurance $ Borrower #2 $ Taxes $ HOA fees $ Total (A) $ Total (B) $ Debt to Income Ratio = (A divided by B) = % Is the Debt-to-Income Ratio greater than 31%? If no, borrower is likely not eligible for a HAMP loan modification. You may call Loan Servicer to confirm calculation and program eligibility.