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Unique Borrowers, Unique Solutions

Unique Borrowers, Unique Solutions. Federal Agencies Working to Help Homeowners. 2012 Integrated Response. MHA and related programs work together to help homeowners avoid foreclosure. MHA Extension – Addition of HAMP Tier 2.

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Unique Borrowers, Unique Solutions

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  1. Unique Borrowers, Unique Solutions Federal Agencies Working to Help Homeowners June 2012 | Making Home Affordable

  2. 2012 Integrated Response MHA and related programs work together to help homeowners avoid foreclosure June 2012 | Making Home Affordable

  3. MHA Extension – Addition of HAMP Tier 2 Enhancements designed to provide relief to more homeowners and to accelerate housing market recovery • Extended MHA through December 31, 2013 • Expanded eligibility through HAMP Tier 2 • Borrowers previously ineligible • Owners of Rental Properties • Tripled investor incentives for principal reduction and offered incentives for GSE principal reduction June 2012 | Making Home Affordable

  4. HARP 2.0 • Eliminates certain up-front fees • Removes the 125% LTV ceiling • Eliminates many reps and warranties • Extended through December 31, 2013 GSE Refinance Opportunity Expanded June 2012 | Making Home Affordable

  5. FHA Refinance Options • Streamlined Refi – Good Credit and Equity • Reduced up-front MIP from 1.15% to .55% on streamlined refinance • Expected to save borrowers $1,000 • Short Refi - “Challenged” Credit and Underwater • FHA 1st must be 97.75% but total LTV can be 115% • Requires at least 10% debt forgiveness by original 1st lien holder • New 1st lien servicer may pay off subordinate liens to achieve LTV • A borrower is “current” if they have made 3 timely payments on a trial modification Changes could kick-start underused FHA short refinance option June 2012 | Making Home Affordable

  6. DOJ Settlement • New foreclosure disclosures • Comprehensive servicing standards • $1.5 Billion to foreclosed borrowers • $3.5 Billion penalty to State and Feds • $3 Billion to refinance underwater borrowers • $17 Billion for principal reduction – expected to provide up to $32 Billion in borrower relief 5 major Servicers have agreed to a package of $25 billion which could be worth much more to borrowers over 3 years June 2012 | Making Home Affordable

  7. DOJ Settlement and HAMP PRA Incentives • $210,000 UPB loan with a property value of $140,000 (150% LTV) is 5 months delinquent. Servicer forgives a total of $70,000 over three years via HAMP and receives $27,510 in PRA incentives from Treasury • Servicer Owned – Net claim against settlement is $36,116. ($70,000-$27,510 = $42,490x $.85) • Serviced for Others –– Net claim against settlement is $16,996. ($70,000-$27,510 = $42,490x $.40) No servicer can receive HAMP principal reduction incentives and also get credit under the settlement June 2012 | Making Home Affordable

  8. HAFA / GSE Short Sales • HAFA – Treasury Program • Pre-Approved short sale transactions • Release of borrower liability • Prohibition on borrower contributions • Cap on subordinate lien payouts • No occupancy requirement • Borrower must have hardship • GSE Short Sale Program • New performance timelines – Acknowledge in 5 days, decision in 30 days • New streamlined short sale requirements coming soon Short sales are a critical but still underused foreclosure prevention option June 2012 | Making Home Affordable

  9. REO To Rental Four to five million REO are expected to hit the market in the next 5 years – further depressing home values • Pilot program by GSEs to increase single family rental stock and reduce REO on the retail market • Initial offering of 2,495 properties • Atlanta, Phoenix, Los Angeles, Riverside, cities in Florida • Expect up to 5 year hold – Realty Trac projections that returns could be as high as 12% in some markets June 2012 | Making Home Affordable

  10. FHA Distressed Asset Sales Selling delinquent loans before foreclosure may provide new workout opportunities for borrowers and preserve communities • Beginning September 2012 FHA will sell up to 10,000 delinquent loans to support community reinvestment objectives • Targeted at hardest hit states • Buyers may not foreclose for a minimum of 6 months. At least 50% of pool may not become REO • Buyer to use other workout strategies – modification, short sales, deed for rent, etc. June 2012 | Making Home Affordable

  11. Trusted Advisors Escalate Tough MHA Cases HMPAdmin.com provides servicers, counselors, and trusted advisors with easy access to MHA information and tools • Resources for Counselors and Trusted Advisors • Presentations • Escalation process details • Webinar schedule • Brochures, fact sheets, etc. June 2012 | Making Home Affordable

  12. Resources for MHA Escalations Resources are in place to help homeowners resolve issues with servicers Really tough cases get escalated to Treasury staff • 888-995-HOPE ask for MHA-Help • HAMP Solution Center: 1-866-939-4469 • Escalate cases to escalations@HMPadmin.com • FannieMae.com, (800)7Fannie, KnowYourOptions.com • FreddieMac.com, (800)Freddie and select option 2, Freddie_Mac_Borrower_Help@FreddieMac.com. June 2011 | Making Home Affordable

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