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Evaluation

Evaluation. Borrower Solicitation and response and Servicer evaluation. Servicers must comply with the evaluation hierarchy and solicitation requirements set forth for HAFA Deed-in-Lieu, including evaluating the Borrower for HAMP before evaluating the Borrower for a HAFA Short Sale .

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Evaluation

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  1. Evaluation

  2. Borrower Solicitation and response and Servicer evaluation • Servicers must comply with the evaluation hierarchy and solicitation requirements set forth for HAFA Deed-in-Lieu, including evaluating the Borrower for HAMP before evaluating the Borrower for a HAFA Short Sale. • If the Servicer is extending a HAFA short sale offer to the Borrower, it must send a Borrower Evaluation Notice offering a HAFA Short Sale together with Form 1135, Short Sale Agreement, and Form 1136, Request for Approval of Short Sale (RASS).

  3. Borrower Solicitation and response and Servicer evaluation • If Freddie Mac approves the Borrower for a HAFA Deed-in-Lieu, the Servicer must send a Borrower Evaluation Notice offering a HAFA Deed-in-Lieu together with Form 1139, Deed-in-Lieu Agreement. • The Servicer must include in the evaluation notice a date by which the Borrower must accept the offer for HAFA, which must be 14 days from the date of the applicable Borrower Evaluation Notice.

  4. Evaluation Criteria • If a HAFA-eligible Borrower responds to the Servicer's solicitation or otherwise requests evaluation for HAFA, the Servicer must conduct the following evaluation to determine whether to extend an SSA to the Borrower. • If the Borrower was previously considered for HAMP, the Servicer must use the documentation collected during the HAMP evaluation process as long as it is less than or equal to 90 days old from the date of the HAFA evaluation.

  5. Evaluation Criteria • If the documentation is older than 90 days or the Borrower was not previously evaluated for HAMP the Servicer must collect the necessary documentation from the Borrower. • The Servicer is not required to obtain supporting documentation validating a Borrower's eligible hardship.

  6. Evaluation Criteria • If the Servicer must order a new credit report, the Servicer may not require the Borrower to pay in advance for the credit report but the Servicer may add the cost to the amount owed under the Mortgage to the extent permitted by the Note, Security Instrument and applicable law in the event the HAFA Short Sale or HAFA Deed-in-Lieu is not completed. • If a HAFA Short Sale or Deed-in-Lieu is completed, the Servicer must pay for the credit report from the Servicer incentive payment received under Incentive Compensation.

  7. Evaluation Criteria • There are a number of criteria required from the Borrower to be eligible for an SSA, which will be explained in the following slides.

  8. Borrower Criteria • The Borrower must currently occupy the Mortgaged Premises as his or her Primary Residence. The Servicer must obtain a credit report for each Borrower or a joint report for co-Borrowers showing the Mortgaged Premises as the Borrower's Primary Residence.

  9. Borrower Criteria • Submit a signed and completed Form 710, Uniform Borrower Assistance Form, Internal Revenue Service (IRS) Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript, and income documentation. • The Servicer must process the Borrower's Form 4506T-EZ with the IRS and receive the tax transcripts from the IRS, unless the Borrower provides a signed copy of his or her most recent federal income tax return.

  10. Borrower Criteria • Have Cash Reserves as of the date of the evaluation that are less than the greater of $5,000 or three times the Borrower's total monthly payment on the Mortgage, determined as follows: • Principal and interest based on the existing Mortgage terms • Monthly pro rata amount for real estate taxes, property and flood insurance, if applicable • Monthly pro rata amount of homeowner's association/condominium fees • Any Escrow payment shortage amounts subject to a repayment plan

  11. Cash Reserves • The process for calculating and verifying Cash Reserves is: • 1) The Servicer must determine that all of the Borrower's Cash Reserves have been accounted for on the Form 710 and verified. • 2) If, upon reviewing the Borrower's tax return or tax transcript, the Servicer observes interest, dividend income or gains/losses that, in total, could not be reasonably produced by the Borrower's disclosed reserves, and such income indicates deposits, securities holdings or other assets that could be in excess of the amounts disclosed by the Borrower on Form 710, the Servicer must reconcile the inconsistency with the Borrower.

  12. Cash Reserves (cont) • 3) If there are inconsistencies between the Borrower's disclosure of assets and the tax return information that cannot be reconciled with the Borrower, or the required Cash Reserves documentation cannot be obtained from the Borrower, the Borrower cannot be considered for HAFA. • 4) Based on the Cash Reserves test, if the Servicer determines that the Borrower's Cash Reserves exceed the greater of $5000 or three times the monthly payment (as determined above) at the time of evaluation, the Borrower is not eligible for HAFA, and the Servicer must evaluate the Borrower for a B65 Short Payoff.

  13. Mortgage Premises Criteria • The Servicer must order an interior Broker's Price Opinion (BPO) or appraisal using the 90 day "as is" marketing value from Freddie Mac's web site at https://www.bpodirect.com in accordance with the requirements of HAFA consideration • The BPO or appraisal may not be more than 30 days old from the date the Servicer evaluates the Borrower for a HAFA Short Sale.

  14. Mortgage Premises Criteria • The Servicer must review the BPO or appraisal to confirm that the Mortgaged Premises are occupied and not abandoned, condemned or vacant . • If there are inconsistencies between the BPO and the credit report or other documentation, the Servicer must reconcile the inconsistencies. • The Servicer may not require the Borrower to pay in advance for the valuation, but the Servicer may add the cost to the amount owed under the Mortgage to the extent permitted by the Note, Security Instrument and applicable law.

  15. Mortgage Insurer Approval • If the Mortgage is covered by mortgage insurance, the Servicer must receive at least preliminary approval for the HAFA Short Sale as described in Section D65.7(e) prior to entering into an SSA with the Borrower.

  16. Title Criteria • The Servicer must review readily available information provided by the Borrower, the Borrower's credit report, the Mortgage file, the foreclosure file, if any, and other available sources to identify subordinate liens and other claims on title to the Mortgaged Premises to determine if the Borrower will be able to deliver clear, marketable title to a prospective purchaser or Freddie Mac.

  17. Title Criteria • If the Servicer's review of the title information reveals a lien, claim, encumbrance or defect that prevents the Borrower from conveying clear, marketable title to the Mortgaged Premises that cannot be satisfied by payment to subordinate lien holders in accordance with General Terms and Conditions, or cannot be resolved without litigation or court order, then the Borrower is ineligible for a HAFA Short Sale or a HAFA Deed-in-Lieu.

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