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Indiana’s Hardest Hit Fund

Indiana’s Hardest Hit Fund. Program Guidelines and Requirements for Counseling Agencies November 4, 2010. What is HHF?. Actually known as the Housing Finance Innovation Fund for the Hardest Hit Housing Markets

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Indiana’s Hardest Hit Fund

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  1. Indiana’s Hardest Hit Fund Program Guidelines and Requirements for Counseling Agencies November 4, 2010

  2. What is HHF? • Actually known as the Housing Finance Innovation Fund for the Hardest Hit Housing Markets • These are TARP (Troubled Asset Relief Program) funds, appropriated by the Emergency Economic Stabilization Act of 2008 (“EESA”) and are obligated and administered by the U.S. Department of the Treasury. • HHF was designed to be allocated to states and jurisdictions that have experienced sustained unemployment rates above the national average over the last twelve months (in Indiana’s case) or where there have been steep home price declines greater than 20 percent since the housing market downturn.

  3. What is HHF? • Awarded in four separate rounds to 18 states plus the District of Columbia • Indiana received $82.7M in Round 3 (August 2010) and another $138.9M in Round 4 (September 2010). • At least $82.7M of the total amount must be directed towards borrowers who are unemployed. For the time being, all $182M of the program funds will be directed towards unemployed borrowers, through a single bridge loan/reinstatement program.

  4. Overview • Client intake will be run through current IFPN infrastructure (1-877 GET HOPE and www.877gethope.org). • We will be utilizing the CounselorDirect (“CD”) system to facilitate eligibility determination for HHF. Once CD determines preliminary eligibility, HHF counselors will verify client eligibility. Final award determination will be made by IHCDA staff. • We anticipate beta testing the HHF/IFPN process in January 2011, with a pilot to begin in February or March 2011. • The HHF program will “go live” no earlier than March 2011 and no later than May 2011.

  5. Overview • Borrowers will be required to pay 30% of their current income toward PITI to IHCDA’. IHCDA will pay the remaining 70% • We estimate that we will assist around 16,000 households

  6. Overview • Total assistance per household is not to exceed $18,000 in hardest hit counties or $12,000 in balance of state. • Term: • In hardest hit counties, up to 18 months or three months after re-employment, whichever comes first; • In balance of state, up to one year or three months after re-employment, whichever comes first. • Eligibility for assistance will be reduced by the number of months’ payment required to bring a homeowner current on their mortgage upon commencement of assistance.

  7. Borrower Eligibility • Unemployed and receiving unemployment insurance OR (in limited cases) able to document current financial hardship and prior period of unemployment resulting in current delinquency • Engaged in job training or ongoing education • Enrolled in counseling • Current household income below 120% AMI • Principal balance below $217k and LTV below 125% • Must not have liquid assets sufficient to make more than 6 months’ worth of payments, excluding retirement accounts • Documentation proving borrower was current on mortgage payments prior to hardship

  8. Servicer Participation • 100% PITI payments will be made by IHCDA on behalf of the borrower to servicer. Servicer must agree to accept payments from IHCDA and apply to PITI only as well as waive any technical default such acceptance might cause under borrower’s loan documents. • Borrowers will be pre-screened for HAMP/HAFA/UP prior to receiving assistance from Indiana’s HHF. • No leveraging from lender/servicers is required.

  9. Counselor Role • Will receive HHF referrals, similar to the way in which counselors receive IFPN referrals currently • Will utilize Counselor Direct for all HHF referrals • Will gather all necessary documentation to complete a HAMP packet for each client. Roughly, in order to apply for HHF, must do the equivalent of Level Two NFMC Counseling

  10. Counselor Role • If borrower is preliminarily eligible for HHF and is not HAMP eligible, Counselor will complete HHF application with borrower and submit to IHCDA • If HHF assistance is awarded to borrower, Counselor will be responsible for closing the loan • Will require some additional follow-up during HHF term of assistance (document verification, quarterly “check-ins”) • At the end of HHF assistance, Counselor is required to screen if there are back-end measures such as HAFA, HAMP, or other lender programs (including forbearance) that may benefit the client.

  11. Counselor Role • IHCDA will begin Counselor Direct and other HHF trainings in December 2010 and will continue through March/April 2011 • All HHF materials, forms, etc. will be provided to HHF Counselors. Only IHCDA standardized forms may be used in conjunction with the HHF program • HHF will be branded/marketed as a tool of the IFPN, and not a program separate and apart from the IFPN

  12. Counselor Role • HHF Counseling is not limited to current IFPN counseling agencies, but non-IFPN counselors must agree to: • Follow IFPN’s minimal housing counseling standards • Cooperate and participate in the MFTCAP (settlement conference program) and comply with the IFPN Counselor Resource Guide • HHF Counseling Agencies who are not part of the IFPN are not obligated to receive any referrals other than those that are pre-screened as HHF eligible from CounselorDirect

  13. Counselor Role • Projected Client Volume • We anticipate that we will need to have a minimum of 70k clients (possibly more) go COMPLETELY through the Counselor Direct system in order to garner 16k HHF eligible clients • Perhaps 25% of these clients will be pre-screened as HHF Eligible. • The remaining 75% must be provided with counseling (either HUD, IFPN, NFMC, etc.) • Please refer to the “Projected Client Volume by County” sheet

  14. Counselor Role • Projected Client Volume • To market this program, we are: • Partnering with DWD on a targeted marketing effort • Utilizing grassroots efforts like, libraries, OFBCI etc. • Planning a $200K paid media campaign and media sponsorship in 2011

  15. Indiana HHF Process • Step 1: Client goes to www.877gethope.org • Step 2: Client completes online intake, which feeds into Counselor Direct • Step 3: CD pre-screens client for HHF eligibility from information given • 3a: If yes, go to Step 4 • 3b: If no, becomes a “regular” IFPN referral • Step 4: Information is referred (through IFPN Helpline staff) to a local HHF Counselor in the client’s service area.

  16. HHF Process • Step 5: Counselor contacts client and gathers any missing information/documentation and verifies preliminary HHF eligibility. • 5a: If client is not HHF eligible, Counselor bills for $50 HHF intake/triage claim and serves the client through another source of foreclosure counseling funding • 5b: If client is HHF eligible, proceed to Step 6 • Steps 6-9: Counselor prepares lender package, depending on client’s needs and situation • Step 10: Counselor meets with client face-to-face (or via Skype) for HHF meeting, explaining the program and the requirements. Client completes HHF application material with client and submits to IHCDA staff via CounselorDirect

  17. HHF Process • Step 11: IHCDA staff review HHF application. If approved, a reservation is made in the IHCDA system and the Counselor and Special Servicer are notified. Counselor informs client and Special Servicer sends welcome letter to client. Counselor closes the loan with client and records the loan at the County Recorder’s office. • Step 12: HHF client makes partial payment to special servicer and special servicer makes 100% payment to the client’s lender. • NOTE: If client is late or misses more than two payments, then their HHF assistance will cease.

  18. HHF Process • Step 13: Counselor continues with quarterly “check-in” appointments (may be over the phone) and document verification with client throughout term of the HHF assistance. • Step 14: Counselor screens for any back-end programs (including HAMP, HAFA, etc.) that may be useful to client and assists them to that end. Completes client close-out form and submits to IHCDA.

  19. Things to Keep in Mind • Please indicate how many HHF clients you may be able to serve each year and what counties you would like to serve • Please indicate how you will meet the face-to-face requirements for counseling where your office does not currently have a physical presence – REMEMBER THAT GROUP COUNSELING AND SKYPE ARE STILL OPTIONS. • We will be working hand-in-hand with WorkOne offices, so if you would like to partner with your local office(s), please make us aware of that in your proposal and we will facilitate this partnership

  20. Things to Keep in Mind • Treasury is working on exemptions from HUD and the IRS on RESPA, SAFE and tax issues for those client who receive assistance. These are not yet in place but we will brief you all on those issues as soon as we have more information. • The assistance will follow the guidelines set by HUD on the RESPA exemption already released, as regards loan term, amortization, rate, forgiveability, etc.

  21. QUESTIONS?

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