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Help for Hardest Hit Programs (H4HH)

Learn about the innovative programs offered by the Michigan Homeowner Assistance Non-Profit Housing Corporation (MHA) to assist homeowners in Michigan who have been hardest hit by the housing crisis. These programs include the Unemployment Mortgage Subsidy, Loan Rescue, and Principal Curtailment.

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Help for Hardest Hit Programs (H4HH)

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  1. Help for Hardest Hit Programs (H4HH)

  2. 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 initial allocation was $154.5 million Since then we have received additional funding for a total of $498.3 million Funding must be within guidelines set forth in the Emergency Economic Stabilization Act (EESA); TARP funds Distributed directly to an eligible financial institution, Michigan Homeowner Assistance Non-Profit Housing Corporation (MHA)

  3. MHA acting through MSHDA began accepting homeowner’s applications from the Participating Lenders/Servicers on July 12, 2010. MSHDA continues to work closely with US Treasury and our lender servicers to revise programs that will provide assistance to hardest hit Michigan residents. Federal Help for Homeowners

  4. Help for Hardest Hit Programs Michigan’s three programs offered are: - 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

  5. 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 Targeted Homeowners

  6. 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 Eligible Properties

  7. Borrower eligible for only one of the three H4HH programs 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 Liquid cash assets cannot exceed 3 months total PITI (includes all subordinate liens) based on their 60 day average balance H4HH Program Eligibility Requirements

  8. Servicer H4HH Participation Agreement required Servicers participating in HAMP must follow HAMP existing guidelines 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 range between 25% to 43%, after assistance, using all income disclosed within the intake/loss mitigation packet General H4HH Eligibility Requirements

  9. 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

  10. Eligible borrower must be receiving Michigan unemployment benefits at time of application; borrower does not have to be currently delinquent to be eligible Maximum payment subsidy is lesser of $750/month or 50% of the required PITI (first lien position); maximum benefit per household is $9,000 Borrower’s remaining portion of housing payment should be sustainable; within 25% to 43% range Subsidy amount cannot be used to pay down borrower’s housing ratio below 25% Approved subsidy amount will not be increased or decreased after commitment is issued and funded (i.e. change in escrow payments) Unemployment Mortgage Subsidy

  11. Due on sale or refinance of existing mortgage, or when the property is no longer the borrower’s primary residence If existing 1st 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 H4HH Loan Terms

  12. 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 may request up to $3,000 in additional assistance to correct the delinquency If assistance is not sufficient to bring loan current, servicer must choose a plan to correct the delinquency balance: forbearance, forgiveness, or repayment Unemployment Mortgage Subsidy

  13. Homeowners must document a one-time, involuntary crisis that resulted in mortgage delinquency (i.e. loss of wages, illness, divorce) Homeowners must document a “recovery” from the crisis and ability to sustain the mortgage payment going forward 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, NSF fees) Assistance is allowed on 2nd lien as long as1st lien is documented as presently current LoanRescue Program

  14. 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 (not a forbearance) 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 or workout plan to remedy delinquency within a reasonable time period not to exceed 12 months Principal Curtailment Program

  15. Assistance on 2nd 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 Principal Curtailment Program

  16. Borrowers may only apply for assistance through their existing servicer; they may not apply directly to MSHDA MSHDA’s website will maintain a list of participating servicers; servicers will be added once the executed Participation agreement is received & approved Program product specifications and all required submission documents are available at www.michigan.gov/mshda under the Lender tab, Tools and Resources H4HH Process Flow

  17. Servicer reviews homeowner’s request for H4HH funds and follows their normal loss mitigation process If you are participating in HAMP, you must follow their guidelines Servicer determines eligibility for H4HH and will submit applications to MSHDA either by mailing to 735 E Michigan Ave., Lansing, Michigan 48912 or via email savethedream@michigan.gov H4HH Process Flow

  18. 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: - Requesting clarification and/or additional documents - Approve request & issue Commitment - Notice of Action Taken H4HH Process Flow

  19. 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; reinstatement assistance will be sent within 24-48 hours 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 H4HH Process Flow

  20. Documentation Package(all programs) Mortgage Loan Profile (print screens) 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

  21. Additional Submission Documents (per program) Unemployment Mortgage Subsidy: Evidence of unemployment Breakdown of reinstatement request, if applicable Submitting the Request

  22. Additional Submission Documents (per program) Loan Rescue: Breakdown of amount of rescue assistance requested Terms of Modification Agreement (unexecuted copy), if applicable Evidence 1st mortgage is current if requesting assistance for 2nd lien (credit report or current 1st mortgage statement is acceptable documentation) Submitting the Request

  23. 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) Submitting the Request

  24. 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 Trailing Documents

  25. Post Closing/ContinualReporting: Servicer provides continued monthly loan status reporting on each loan as required by the US Department of Treasury (12 months from date of last assistance received) Audit: MSHDA has contracted a third party vendor to randomly select 10% of servicer’s closed files for post closing audit MSHDA will provide selected files to vendor for review Servicers will be provided a copy of auditor’s finding if necessary Post Closing/Continual Reporting

  26. H4HH Contacts Katy Twining: 517-241-0722; twiningm@michigan.gov Chris Blank: 517-373-0517; blankc@michigan.gov Help for Hardest Hit Technicians Valerie Dikeman: 517-373-8120; dikemanv@michigan.gov Jamie Guardiola: 517-241-2935;  guardiolaj@michigan.gov Ryan Koenigsknecht: 517-241-7455;koenigsknechtr@michigan.gov Carolyn Kundrat: 517-335-2028; kundratc@michigan.gov Stacey Place: 517-241-1604;places1@michigan.gov

  27. Questions???

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