HUD-Approved Intermediaries and State HFA Bidders’ Conference January 15, 2008

1. HUD-Approved Intermediaries and State HFABidders’ Conference January 15, 2008 Overview Legislation beneficiaries areas of need eligible applicants eligible uses match Program Design funding plan request amount award decisions draws &reporting Timeline Application Qs

2. Overview • FY2008 Consolidated Appropriations Act signed 12/26/07 • National Foreclosure Mitigation Counseling Program (NFMC) • Details: www.nw.org/nfmc • One-time appropriation • Need each potential applicant to assign one authorized user (e-mail name, org, and e-mail to drhodes@nw.org) Overview Legislation beneficiaries areas of need eligible applicants eligible uses match Program Design funding plan request amount award decisions draws &reporting Timeline Application Qs

3. LegislationBeneficiaries Beneficiaries: “homeowners of owner-occupied homes with mortgages in default or danger of default will receive assistance that shall…likely prevent foreclosures and result in the long term affordability of the mortgage retained pursuant to such activity or other positive outcome for the homeowner.” Positive outcome defined as homeownership preservation or, if not, least burdensome outcome. Examples: • Bring loan current - Home sale • Refinance existing mortgage - Short sale • Modify Mortgage - Deed in lieu • Forbearance agreement Overview Legislation beneficiaries areas of need eligible applicants eligible uses match Program Design funding plan request amount award decisions draws & reporting Timeline Application Qs

4. LegislationAreas of Need Areas of Need: “Provide mortgage foreclosure mitigation assistance primarily to states and areas with high rates of defaults and foreclosures primarily in the sub prime housing market…(and in areas) where there is a prevalence of sub prime mortgages that are risky and likely to fail.” “NRC shall award $50 million for States and areas with the greatest need within 60 days of enactment” Overview Legislation beneficiaries areas of need eligible applicants eligible uses match Program Design funding plan request amount award decisions draws & reporting Timeline Application Qs

5. Legislation Areas of Greatest Need analysis considers the following: 1) # of delinquent loans 2) % of loans delinquent 3) % of loans in foreclosure/REO 4) % of loans subprime MSAs: if an MSA fell into the “worst” quintile in any of the these variables, they are considered an area of greatest need. Rural Areas: if more than 50% of the micropolitan areas in a state fall into the “worst” quintile in any of these variables, the state is one that we would consider having a foreclosure concern in rural areas. Result: 192 MSAs and rural areas of 29 states qualify as an area of greatest need. Overview Legislation beneficiaries areas of need eligible applicants eligible uses match Program Design funding plan request amount award decisions draws & reporting Timeline Application Qs

6. LegislationEligible Applicants Who is Eligible?: - HUD-approved Housing Counseling Intermediaries - State Housing Finance Agencies - Chartered members of NeighborWorks network Who is Not Eligible?: - Individuals - local housing counseling agencies cannot apply directly (but may apply through HFA or Intermediary) - national and regional housing counseling intermediaries that are not HUD-approved - HFAs that do not have statutory authority to work statewide Overview Legislation beneficiaries areas of need eligible applicants eligible uses match Program Design funding plan request amount award decisions draws &reporting Timeline Application Qs

7. Legislation All Eligible Applicants must: - Demonstrate Experience.Applicant must certify that each of its sub-grantees or branches that will receive funding has: 1) worked successfully with financial institutions and with borrowers facing default, delinquency, and foreclosure; 2) documented counseling capacity, outreach capacity, past successful performance and positive outcomes with documented counseling plans (including post mortgage foreclosure mitigation counseling), loan workout agreements, and loan modification agreements; Overview Legislation beneficiaries areas of need eligible applicants eligible uses match Program Design funding plan request amount award decisions draws &reporting Timeline Application Qs

8. Legislation All Eligible Applicants must: 3. Applicant must certify that each of its subgrantees or branches that will receive funding has achieved one of the following: • Provided foreclosure counseling services that included documented action plans to at least 50 people during the past year or 20 people during the past quarter OR • if > 75% of the applicant’s service area is rural and applicant provided foreclosure counseling services that included documented action plans to at least 25 people during the past year or 10 people during the past quarter OR • Applicant has provided foreclosure counseling services that included documented action plans to at least 12 people during the past year AND has at least one comprehensively trained and qualified foreclosure counselor on staff Overview Legislation beneficiaries areas of need eligible applicants eligible uses match Program Design funding plan request amount award decisions draws &reporting Timeline Application Qs

9. Legislation All Eligible Applicants must: - Adhere to the National Industry Foreclosure Counseling Standards - Demonstrate Ability to Provide 1) reasonable analysis of borrower’s financial situation 2) evaluation of current value of the property that is subject to the mortgage 3) counseling regarding assumption of the mortgage or possible purchase of the mortgage by non- federal third party 4) Counseling and advice of all likely restructuring and refinancing strategies, or approval of a work- out strategy by all interested parties Overview Legislation beneficiaries areas of need eligible applicants eligible uses match Program Design funding plan request amount award decisions draws &reporting Timeline Application Qs

10. LegislationEligible Uses 1. Training - up to $5 million to “build mortgage foreclosure and default mitigation counseling capacity of counseling intermediaries” - Scholarships for affiliate counseling staff to attend NeighborWorks Training Institutes • Place Based Training sponsored and hostedby NeighborWorks America • Place Based Training sponsored by NeighborWorks America and hosted by HUD Intermediaries and or state Housing Finance Agencies • Foreclosure Basics e-learning course Overview Legislation beneficiaries areas of need eligible applicants eligible uses match Program Design funding plan request amount award decisions draws &reporting Timeline Application Qs

11. LegislationEligible Uses 2. Grant Funds - at least $167.8 million in grant funds 3. Administrative Expenses - up to 4% of total to administer grant program and study successful strategies and methods for preserving homeownership and long term affordability; analyze details and use of post-mitigation counseling of assisted borrowers; analyze policies and procedures which failed to result in successful mortgage foreclosure mitigation; recommend efforts that can assist in the success of the program Individuals Overview Legislation beneficiaries areas of need eligible applicants eligible uses match Program Design funding plan request amount award decisions draws &reporting Timeline Application Qs

12. LegislationMatch Match to be determined/waived by NRC based on affordability and economic conditions of an area: • 20% match rate for $500,000 or less and 10% for funding in excess of $500,000 • Match can be cash or in-kind • Must be related to foreclosure program • Federal funds may not be counted • Match window: Jan 1 – Dec 31, 2008 • Must be expended or committed with each draw request • May be waived in counties where local poverty or local unemployment rates are greater than 150% of the national rate. Overview Legislation beneficiaries areas of need eligible applicants eligible uses match Program Design funding plan request amount award decisions draws &reporting Timeline Application Qs

13. Program DesignFunding Plan • Of the $167.8 million available for grant allocation, $37.8 million set aside for subsequent grants. • Remaining $130 million will be competed. Of this, at least $66.3 million will be targeted to areas of greatest need ($50 million of which will be awarded to “areas of greatest need” within 60 days). • Up to additional $80 million can be awarded during this round, primarily to states and areas of high rates of defaults and foreclosures primarily in sub prime market • May solicit second round of applications if necessary Overview Legislation beneficiaries areas of need eligible applicants eligible uses match Program Design funding plan request amount award decisions draws & reporting Timeline Application Qs

14. Program Designrequest amount Three categories of funding: 1) Counseling 2) Program-related support 3) Operational Oversight Overview Legislation beneficiaries areas of need eligible applicants eligible uses match Program Design funding plan request amount award decisions draws &reporting Timeline Application Qs

15. Program Designrequest amount “Level One” Counseling ($150) • Organization must conduct an intake including basic demographic information, lender and loan information, and reason for delinquency. • Organization shall collect a signed authorization form (or other legally permissible document) that will allow organization to (a.) submit client-level information to the data collection system for this grant, (b.) open files to be reviewed for program monitoring, and (c.) pull credit record for purposes of program evaluation two additional times and conduct follow-up with client related to program evaluation. • Organization must develop a budget for the client based on client’s oral representation of their expenses, debts, and available sources of income. • Organization must develop a written Action Plan for follow up activities to be taken by the client and review this Action Plan with the client. Overview Legislation beneficiaries areas of need eligible applicants eligible uses match Program Design funding plan request amount award decisions draws &reporting Timeline Application Qs

16. Program Designrequest amount “Level Two” Counseling ($200): • Engage in budget verification • If not already on file, organization shall collect authorization form • Steps to obtain a solution outlined in the written Action Plan are taken and documented using counseling notes that indicate date counseling occurred • Close-out documentation is completed. Overview Legislation beneficiaries areas of need eligible applicants eligible uses match Program Design funding plan request amount award decisions draws &reporting Timeline Application Qs

17. Program Designrequest amount “Level Three” Counseling ($350): • Level three counseling can be billed when all necessary documentation for levels 1 and 2 are completed in succession by the same agency. Overview Legislation beneficiaries areas of need eligible applicants eligible uses match Program Design funding plan request amount award decisions draws &reporting Timeline Application Qs

18. Program DesignRequest Amount Program-Related Support:Applicants can apply for up to 20 percent of their counseling award for Program-Related Support. • Establishing a triage system • Outreach to delinquent borrowers • Group orientation and education • Infrastructure development and communication • Improving capacity for tracking and reporting data • Costs related to hiring, orienting, and training new counseling staff • Purchasing or leasing equipment and software for new counselors • Collecting data and preparing quarterly reports and draw requests • Local operational oversight Overview Legislation beneficiaries areas of need eligible applicants eligible uses match Program Design funding plan request amount award decisions draws &reporting Timeline Application Qs

19. Program DesignRequest Amount Program-Related Support: - A plan for use of these funds must be included with the application. - full 20 percent must be passed through to sub-grantees, unless applicants justify how retaining a portion of this support will have a timely and positive impact on the capacity of local subgrantees to conduct foreclosure mitigation counseling. If such a plan is submitted and justified, no more than 50 percent of the funds allocated under this section can be held at the intermediary or HFA level Overview Legislation beneficiaries areas of need eligible applicants eligible uses match Program Design funding plan request amount award decisions draws &reporting Timeline Application Qs

20. Program DesignRequest Amount Operational Oversight: Intermediaries and HFAs may request funding for operational oversight. These requests must be limited to 7 percent of the first $2.5 million received under the Counseling category (or $175,000). After the first $2.5 million in Counseling funds awarded, the allowable percentage decreases to 5 percent. Example: An Intermediary applies for $5 million under the Counseling category. The request for Operational Oversight funds is limited to $300,000 ($175,000, or 7 percent of the first $2.5 million in Counseling funds, and $125,000, or 5 percent of the second $2.5 million in Counseling funds.) Overview Legislation beneficiaries areas of need eligible applicants eligible uses match Program Design funding plan request amount award decisions draws &reporting Timeline Application Qs

21. Program DesignAward Decisions • There is no minimum or maximum application amount. Award limits may be established during the grant review and award process • Review Teams • Award decisions will be based upon on a number of considerations, including (without limitation) (1) the recommendations and scores of grant reviewers with particular attention to the Applicant’s demonstrated experience and capacity to deliver counseling services and/or manage multiple Sub-grantees and Branches (including performance and compliance under previous HUD Housing Counseling grants); (2) the reasonableness of Applicant’s counseling goals; (3) geographic diversity and coverage in areas of greatest need; and (4) total demand for funding from all Applicants. • May draw on information outside of what is included in application, e.g., applicants’ previously submitted HUD 9902s, findings from HUD Housing Counseling performance reviews, and other available relevant information. Overview Legislation beneficiaries areas of need eligible applicants eligible uses match Program Design funding plan request amount award decisions draws &reporting Timeline Application Qs

22. Program DesignAward Decisions In the event that there is insufficient geographic coverage represented by recommended grantees, NeighborWorks may allow applicants to either open new branches or enter into agreements with sub-grantees or branches that do not currently have foreclosure operations under the following conditions: Overview Legislation beneficiaries areas of need eligible applicants eligible uses match Program Design funding plan request amount award decisions draws &reporting Timeline Application Qs

23. Program DesignAward Decisions • Sub-grantees or Branches have a strong track record of providing homeownership counseling services as demonstrated by having a homeownership counseling line of business in operation for more than three years and having counseled at least 50 homebuyers in the last year (25 for rural areas) • Such Sub-grantees or Branches would have at least one counselor trained and able to provide quality counseling services within 90 days of grant award. Funds would not be disbursed until proof of such training was demonstrated. • Applicant understands that the grant period ends December 31, 2008 and, therefore, permanent foreclosure counseling capacity cannot be supported with these funds. Overview Legislation beneficiaries areas of need eligible applicants eligible uses match Program Design funding plan request amount award decisions draws &reporting Timeline Application Qs

24. Program DesignAward Decisions Draw Schedule: • 35% of counseling award + 35% of Operational Oversight + 70% of program related support (1st draw) • After 25% of total production goal is demonstrated, second draw is initiated, which consists of additional 30% of counseling award + 30% of operational oversight + 15% of program related support • After 60% of total production goal is demonstrated, third draw is initiated, which consists of additional 30% of counseling award + 30 percent of operational oversight + remaining 15% of program related support • After 100% of total production is demonstrated, remaining 5% of counseling award and operational oversight will be disbursed as follows; half at completion of final report and half at completion of evaluation requirements Overview Legislation beneficiaries areas of need eligible applicants eligible uses match Program Design funding plan request amount award decisions draws & reporting Timeline Application Qs

25. Program DesignReporting • Production Reports trigger draws • Quarterly Programmatic and Expenditure Reports • Ongoing Evaluation THIRD PARTY- data collection - quality control and compliance - evaluation Overview Legislation beneficiaries areas of need eligible applicants eligible uses match Program Design funding plan request amount award decisions reporting Timeline Application Qs

26. Overview Legislation beneficiaries areas of need eligible applicants eligible uses match Program Design funding plan request amount award decisions draws & reporting Timeline Application Qs

27. Timeline Overview Legislation beneficiaries areas of need eligible applicants eligible uses match Program Design funding plan request amount award decisions reporting Timeline Application Qs

28. Timeline Overview Legislation beneficiaries areas of need eligible applicants eligible uses match Program Design funding plan request amount award decisions reporting Timeline Application Qs