Help for Hardest Hit Programs (H4HH)
Federal Help for Homeowners February 19, 2010, President Obama announced $1.5 billion in funding for innovative measures to assist families in states hardest hit by the aftermath of the housing crisis. Michigan was selected as one of the first five states to share in this fund; our allocation is $154.5 million. Funding must be within guidelines set forth in the Emergency Economic Stabilization Act (EESA) and distributed directly to an eligible financial institution, Michigan Homeowner Assistance Non-Profit Housing Corporation (MHA). MHA acting through MSHDA will accept homeowner s applications from Participating Lenders/Servicers.
Help for Hardest Hit Programs The Department of U.S. Treasury approved Michigan s proposal of three new programs: - Unemployment Mortgage Subsidy - Loan Rescue - Principal Curtailment Programs were designed to help Michigan s residents maintain homeownership during periods of job loss or other involuntary hardships.
H4HH Targeted Homeowners Homeowners currently receiving unemployment compensation Homeowners who have fallen behind in their mortgage payments or taxes due to a one-time, involuntary crisis such as a temporary layoff, medical emergency, or divorce Homeowners who can no longer afford their mortgage payments due to lower income and need a principal curtailment due to a severe negative equity position
H4HH Eligible Properties Located in the State of Michigan Existing one family, single unit homes; includes condominiums (attached or detached) Existing manufactured homes on permanent foundation affixed to real estate (single & doublewide) No second homes or investment properties Multi-unit properties are not eligible even if owner-occupied
H4HH Program Eligibility Requirements Borrower eligible for only one H4HH program Borrower must occupy property as their primary residence Borrower must be obligated on the original mortgage note Maximum existing unpaid principal balance of $729,750 Cash reserves cannot exceed 3 months total PITI (includes all subordinate liens)
General H4HH Eligibility Requirements Servicer H4HH Participation Agreement required If HAMP Servicer, must use HAMP as first loss mitigation option as required by their agreement Servicer should follow their existing loss mitigation policies and incorporate H4HH assistance as needed to reach a sustainable housing payment (PITI) Generally, a sustainable PITI should not exceed 31% to 43% after assistance using all income disclosed within the intake/loss mitigation packet
H4HH Loan Terms A secured subordinate lien (mortgage and note) 0% non-amortizing loan, forgivable over a 5 year term, 20% per year Original mortgage & note sent to MSHDA for recording and retention MSHDA will pay recording fees New title policy is not required MSHDA is not required to be added as a loss payee on insurance policies
H4HH Loan Terms Due on sale or transfer, payoff of existing mortgage, or when the property is no longer the borrowers primary residence If existing 1 st mortgage is refinanced, MSHDA will not subordinate H4HH lien Servicer may not charge the borrower any fees to participate in H4HH programs Servicer will not be compensated by MSHDA for participation
Unemployment Mortgage Subsidy Eligible borrower must be receiving Michigan unemployment benefits at time of application Maximum subsidy is lesser of $750/month or 50% of the required PITI; maximum benefit per household is $9,000 Borrower s remaining portion of housing payment should be sustainable; within 31% to 43% DTI Subsidy amount cannot be used to pay down Borrower s housing ratio below 25% DTI Approved subsidy amount will not be increased or decreased after Commitment is issued and funded (i.e. change in escrow payments)
Unemployment Mortgage Subsidy Borrower must continue to remit their portion of the monthly payment as due. MHA subsidy will cease if borrower s portion of payment is delinquent over 30 days Borrower responsible for notifying MSHDA when unemployment status changes Once borrower returns to work, assistance provided for an additional two months, not to exceed 12 month maximum If loan is presently delinquent, Servicer must provide stabilization plan to remedy delinquency within a reasonable time period not to exceed 12 months
Loan Rescue Program Homeowners must document a one-time, involuntary crisis that resulted in mortgage delinquency (i.e. loss of wages, illness, divorce) Up to $5,000 in assistance; used to pay delinquent payments or escrow shortages Assistance cannot be used to pay servicing fees (i.e. late fees, inspection fees, appraisal fees, legal fees) Assistance is allowed on 2nd lien as long as1st lien is documented as presently current
Principal Curtailment Program Homeowner must have severe negative equity; greater than 115% CLTV of current market value Homeowner must have had a decrease in income and needs a principal curtailment to reach a sustainable payment Provides a one-time assistance of up to $10,000, which the Servicer must match at a minimum of 1:1 ratio Loan modification is required to re-amortize the lower outstanding loan balance If loan is presently delinquent, Servicer must provide stabilization plan to remedy delinquency within a reasonable time period not to exceed12 months
Principal Curtailment Program Assistance allowed on 2 nd lien is eligible if the 1st mortgage is current and at 100% or higher LTV of current market value After funds are applied, CLTV cannot be less than 115% and 1st lien cannot be reduced below 100% H4HH lien is not to be used in CLTV calculations on this program
H4HH Process Flow Servicer must have executed MHA Participation agreement on file and attend this webinar training MSHDA s website www.michigan.gov/mshda will maintain a list of participating servicers; servicers will be added once executed Participation agreement is received & approved Borrowers may only apply for assistance through their existing Servicer; they may not apply directly to MSHDA Program product specifications, required submission documents, and FAQ (Frequently Asked Questions) are available at www.michigan.gov/mshda under the Lender tab, Tools and Resources
H4HH Process Flow Servicer receives homeowner s request for H4HH funds and follows their normal loss mitigation process If you are participating in HAMP, you must follow HAMP requirements first Servicer determines eligibility for H4HH and will submit eligible applications to MSHDA - First three (3) applications must be a complete copy of your loss mitigation package, including H4HH required documents - Subsequent applications will have reduced document requirements
H4HH Process Flow After Receipt of application package, MSHDA acting on behalf of the MHA, will follow this process: Date stamp application package upon receipt; FUNDS AVAILABLE ON A FIRST COME, FIRST SERVE BASIS Review borrower eligibility and contact Servicer with status via email - Request additional information - Approve request & issue Commitment - Notice of Action Taken
H4HH Process Flow Funds will be sent directly to Servicer at time of commitment on both the Loan Rescue and Principal Curtailment programs On the Unemployment Subsidy program, the subsidized mortgage payment will be sent directly to Servicer on the next due date and scheduled subsequently for the duration of the assistance Servicer has 30 days from commitment date to return executed mortgage note, mortgage and any other required trailing documents including evidence that funds were applied as approved MSHDA will send mortgage for recording and absorb recording fees
Submitting the Request Reduced Documentation Package (all programs) Mortgage Loan Profile Borrowers Intake/loss mitigation application (HAMP form or similar form) Evidence obligated on Note Mortgage history (12 month) Hardship Affidavit (HAMP or internal form acceptable) H4HH 003 Borrower s Authorization H4HH 001 Request for H4HH Commitment H4HH 002 Loan Work Out Plan
Submitting the Request Additional Submission Documents (per program) Unemployment Mortgage Subsidy: Evidence of unemployment Stabilization plan to remedy delinquency within 12 months, if applicable
Submitting the Request Additional Submission Documents (per program) Loan Rescue: Breakdown of amount of Rescue Assistance requested Terms of Modification Agreement (unexecuted copy), if applicable Evidence 1 st mortgage is current if requesting assistance for 2 nd lien (credit report or current 1 st mortgage statement is acceptable documentation)
Submitting the Request Additional Submission Documents (per program) Principal Curtailment: Appraisal or BPO documenting current market value (paid by lender or borrower) Title search to document all current liens Provide current outstanding balances for all liens (recent credit report acceptable documentation) Terms of modification agreement (unexecuted copy) Proof 1st mortgage is current if requesting assistance on 2nd lien (recent credit report or mortgage statement acceptable documentation)
Trailing Documents Servicer must submit within 30 days of commitment the following documentation: Copy of H4HH Commitment letter Original fully executed and notarized Mortgage (MSHDA will record) Original fully executed Note Evidence funds have been applied as approved. Including Servicer s Match (Principal Curtailment only) Copy of executed Modification Agreement, if applicable
Post Closing/Continual Reporting Post Closing/Continual Reporting: Servicer provides continued monthly loan status reporting on each loan as required by the US Department of Treasury (24 months) Audit: MSHDA will randomly select 10% of Servicers closed files for internal post closing audit Servicer will be notified by e-mail which loans to submit complete copy packages of their complete work out plan Files will be required to be sent via overnight courier within five business days of request.
Questions???
MICHIGAN HOMEOWNER ASSISTANCE NONPROFIT HOUSING CORPORATION Acting Through MICHIGAN STATE HOUSING DEVELOPMENT AUTHORITY Division of Homeownership 735 E Michigan Avenue, Lansing, Michigan 48912 Borrower s Authorization & Disclosure Agreement I/We, the undersigned applicant(s), have applied for a real estate modification with. I/We are hereby authorizing to release any and all information required by the Michigan Homeowner Assistance Nonprofit Housing Corporation (MHA), acting through the Michigan State Housing Development Authority (MSHDA) in our request for assistance through the Help for Hardest Hit programs. I/we hereby allow MSHDA, its agents, employees, or affiliates, to request and obtain income and asset, mortgage, credit bureau and personal information pertinent to receipt of this assistance. I/we allow contact to be made on my/our behalf with representatives from mortgage, attorney, collection and credit bureau companies. I/We understand that MHA receives Help for Hardest Hit funds through the U.S. Department of Treasury, and as such, is required to share some of my/our personal information with program administrators or their agents for purposes of program monitoring, compliance and evaluation. MHA will continue to report program success and/or other outcomes to Treasury for a period following the end of MHA s assistance to me/us. By executing this Authorization and Disclosure Agreement, I/we are agreeing to and understand the parameters of these programs and my/our responsibilities. I/We acknowledge that I/we will only be eligible for one Help for Hardest Hit program per household. Unemployment Mortgage Subsidy Program The Unemployment Mortgage Subsidy Program is a one-time award, providing monthly payment subsidy during unemployment. The monthly payment will be the lesser of 50% of my/our current monthly principal, interest, taxes and insurance payment or $750. I/we are aware of our continued responsibility to remit the remainder of our monthly payment to our current mortgage servicer by the already-established due date. Eligibility will terminate 60 days after returning to employment, but the maximum number of payments will be no more than 12. I/We agree to notify MHA immediately upon return to work. If at any time during the subsidy period, I/we become delinquent in my/our monthly payments of over 30 days, I/we acknowledge that MHA will stop monthly payments. Loan Rescue Program The Loan Rescue Program is a one-time award, providing funds directly to my/our mortgage servicer to apply towards delinquent mortgage payments, delinquent property taxes and any accrued escrow shortages. Principal Curtailment Program OR OR The Principal Curtailment Program is a one-time matching fund with current mortgage servicer for homeowners with severe negative equity greater than 115% combined loan to value; up to $10,000 per household with a minimum additional 1:1 match from the mortgage servicer. Funds will be applied directly to principal balance of existing lien. If first mortgage is current, 2 nd mortgage liens may be eligible for principal curtailment. On each of the above programs, I/we agree to execute a subordinate mortgage and note. This note will be 0% interest rate, non-amortizing, forgivable over a 5-year term at 20% per year, which will be due on sale or transfer of the property, or if the property ceases to be my/our principal residence, or if I/we repay in full any mortgage loan encumbering the property. A copy of this authorization form may be deemed to be the equivalent of the original and may be used as a duplicate original. I/we acknowledge and agree that MHA is relying on the factual accuracy of the statements I/we make in applying for assistance under the above programs. I/we further acknowledge that if MHA determines that I/we have made any misstatement of material fact in any documents I/we have submitted in order to participate in the above programs, my/our loan servicer will reverse any credits that the servicer had previously made to the mortgage loan serviced by the servicer that were a result of a my/our participation in the above programs. In addition, I/we may be subject to criminal prosecution or civil suit for any such misstatements. Date Borrower Date Co Borrower H4HH 002 (06-10) Borrower s Authorization & Disclosure Agreement
REQUEST FOR H4HH COMMITMENT All information below must be fully completed, leaving no blanks; If not applicable write N/A LENDER/SERVICER LENDER/SERVICER RETURN ADDRESS CITY ZIP LENDER/SERVICER CONTACT NAME CONTACT E-MAIL ADDRESS LENDER/SERVICER LOAN # CONTACT PHONE NUMBER CONTACT FAX NU ( ) ( ) MBER BORROWER S NAME (LAST) (FIRST) (MIDDLE INITIAL) CO-BORROWER S NAME (LAST) (FIRST) (MIDDLE INITIAL) BORROWER S SOCIAL SECURITY NUMBER - - CO-BORROWER S SOCIAL SECURITY NUMBER - - RACE AMERICAN INDIAN - ALASKAN NATIVE ASIAN AFRICAN AMERICAN NATIVE HAWAIIAN OTHER PACIFIC ISLANDER WHITE NOT PROVIDED HARDSHIP UNEMPLOYED UNDEREMPLOYMENT DIVORCE MEDICAL CONDITION DEATH OTHER DELINQUENCY STATUS CURRENT 30+ 60 + 90+ ETHNICITY HISPANIC LATINO NOT HISPANIC NOT LATINO NOT PROVIDED TOTAL PERSONS IN HOUSEHOLD SEX RACE AMERICAN INDIAN - ALASKAN NATIVE ASIAN AFRICAN AMERICAN NATIVE HAWAIIAN OTHER PACIFIC ISLANDER WHITE NOT PROVIDED TOTAL HOUSEHOLD INCOME $ ETHNICITY HISPANIC LATINO NOT HISPANIC NOT LATINO NOT PROVIDED COUNTY OF PROPERTY SUBJECT PROPERTY STREET ADDRESS CITY ZIP CODE SEX $ $ CURRENT MORTGAGE BALANCE CURRENT PROPERTY VALUE/BPO (if applicable) LOAN INTEREST RATE CURRENT MORTGAGE TERM H4HH LOAN PROGRAM CURRENT LTV (if applicable) CURRENT CLTV (If applicable) MAKING HOME AFFORDABLE PROGRAM HAMP ELIGIBLE: APPROVED / DENIED HAMP INELIGIBLE ALL H4HH SUBMISSION DOCUMENTS H4HH 001 Request for H4HH Commitment H4HH 002 Loan Work out Plan H4HH 003 Borrower s Authorization Mortgage Loan Profile Borrower s Intake Application Evidence obligated on original Note Mortgage History Hardship Affidavit ADDITIONAL DOCUMENTS (If Applicable) UNEMPLOYMENT MORTGAGE SUBSIDY Evidence of Unemployment Work out Plan to bring account current if past due LOAN RESCUE Breakdown of Rescue Assistance Terms of Modification Agreement, if applicable Proof 1 st Mtg. is current if requesting for 2 nd Mtg. PRINCIPAL CURTAILMENT Appraisal or BPO Documenting Current Market Value Title Search and Outstanding Balances Terms of Modification Agreement Proof 1 st Mtg. is current if requesting for 2 nd Mtg. Submit completed package to: MSHDA OR Homeownership / H4HH E-mail completed package to: 735 E. Michigan Avenue Savethedream@michigan.gov Lansing, Michigan 48912 FOR MSHDA USE ONLY H4HH LOAN NUMBER RECEIVED DATE APPROVED DATE H4HH Tech. H4HH 003 (06-10)
MICHIGAN HOMEOWNER ASSISTANCE NONPROFIT HOUSING CORPORATION Acting Through MICHIGAN STATE HOUSING DEVELOPMENT AUTHORITY Division of Homeownership 735 E. Michigan Avenue, Lansing, Michigan 48912 Servicer s Loan Work Out Plan & Request for Help for Hardest Hit (H4HH) Assistance Servicer: Servicer ID Code: Date: Servicer Loan # Borrower Name: Property Address: H4HH Assistance: Unemployment Mortgage Subsidy Program $ Loan Rescue Program $ Principal Curtailment Program $ The Servicer has reviewed this Borrower s request for loan modification within the guides of their own standard process and warrants, based on their analysis of the Borrower s documentation, the Borrower is eligible for, and in need of, one-time federally funded assistance under Michigan s Help for Hardest Hit (H4HH) program. Loan Overview Current Loan Data Modified Loan Data (if applicable) Principal Balance Interest Rate Term P & I 2 nd Mortgage Principal Balance 2 nd Mortgage P & I Total PITI Household Income Mortgage Payment (PITI) Ratio Loan Delinquency Status Other Other The Servicer has warranted the Borrower s eligibility according to guidelines set forth by Michigan State Housing Development Authority (MSHDA or the Authority) specifically, but not all inclusive, the Borrower meets the following qualifications: o o o State of Michigan permanent resident Owner occupied, single family, primary residence Has less than three months total PITI in liquid assets On each of the above programs, the Borrower agrees to execute a secured, subordinate lien mortgage and note. This loan will be a 0% interest rate, non-amortizing, forgivable over a 5-year term at 20% per year, which will be due on sale or transfer of the property, or if the property ceases to be their principal residence, or if they repay in full any mortgage loan encumbering the property. The Servicer has abided by the terms of the Servicer Participation Agreement (H4HH 01) and agrees to provide upon request any and all loan documents to MSHDA for our review either prior to or after our Loan Commitment. Servicer Decisioning Notes: Date: Servicer Loss Mitigation Specialist Phone #: Email: Date: Servicer Loss Mitigation Supervisor Phone #: Email: H4HH 004 (06-10) Lender s Loan Work Out Plan/Request for H4HH Assistance
MICHIGAN HOMEOWNER ASSISTANCE NONPROFIT HOUSING CORPORATION ACTING THROUGH MICHIGAN STATE HOUSING DEVELOPMENT AUTHORITY HELP FOR THE HARDEST HIT COMMITMENT «Commitment_Date» SF Loan #: «Loan_Number_12_positions» LT# «ALICELT Last_6» Bond Series: «Bond_Series» «Originator» Borrower: «Borrower_Name» «Lender_Address_1» CoBorrower: «CoBorrower_Name» «Lender_Address_2» Address: «Property_Address» «Lender_City», «Lender_State» «Lender_Zip_Code» City/Zip: «Property_City» «Property_Zip_Code» County: «Property_County» Loan Amount: «Loan_Amount» Loan Type: «Loan_Type» Expires On: «Commitment_Expiration_Date». The Michigan State Housing Development Authority (MSHDA) hereby commits itself to fund the above described Help for the Hardest Hit Program which will be secured by a subordinate lien mortgage and note thereby, subject to and in accordance with the Servicer Participation Agreement Help for the Hardest Hit Programs entered into between MSHDA and the Servicer, and the provisions of the Borrower s Authorization & Disclosure Agreement in effect as of the date of this Commitment, all of which are fully incorporated herein by reference. SPECIAL CONDITIONS REQUIRED BY MSHDA Unemployment Mortgage Subsidy total $ Not to exceed 12 monthly payments of $. MSHDA must be notified immediately upon borrowers return to work. Borrower is responsible for remitting the remainder of the monthly payment to their current mortgage servicer by the already established due date. If borrower becomes delinquent over 30 days subsidy ceases and servicer must return unused portion of Unemployment Mortgage Subsidy. Loan Rescue $ Principal Curtailment $ Servicer s required match $ Provide a copy of this form and submit along with the following required documents within 30 days of the commitment date to: MSHDA Attn: H4HH Trailing Documents 735 E. Michigan Ave Lansing, MI 48912 Copy of H4HH Commitment Letter Original fully executed and notarized Mortgage form # in the amount of $ Original fully executed Note form # in the amount of $ Evidence funds have been applied as approved. Including Servicer s Match (Principal Curtailment) Copy of executed Modification Agreement if applicable Servicer agrees to provide continued loan status reporting on each mortgage loan of a Program participant Other By: Mary Townley, Director of Homeownership Michigan State Housing Development Authority Equal Housing Lender 01/08 735 EAST MICHIGAN AVENUE P.O. BOX 30044 LANSING, MICHIGAN 48909 www.michigan.gov/mshda (517) 373-6840 (517) 335-7081 FAX