Fannie Mae & Freddie Mac Programs Aligned to Expedite Assistance to Borrowers

FHFA Announces New Standard Short Sale Guidelines for Fannie Mae and Freddie Mac; Programs Aligned to Expedite Assistance to Borrowers

(FHA Press Release, August 21, 2012)

The Federal Housing Finance Agency (FHFA) today announced that Fannie Mae and Freddie Mac are issuing new, clear guidelines to their mortgage servicers that will align and consolidate existing short sales programs into one standard short sale program.

The streamlined program rules will enable lenders and servicers to quickly and easily qualify eligible borrowers for a short sale.

The new guidelines, which go into effect Nov. 1, 2012, will permit a homeowner with a Fannie Mae or Freddie Mac mortgage to sell their home in a short sale even if they are current on their mortgage if they have an eligible hardship. Servicers will be able to expedite processing a short sale for borrowers with hardships such as death of a borrower or co-borrower, divorce, disability, or relocation for a job without any additional approval from Fannie Mae or Freddie Mac.

“These new guidelines demonstrate FHFA’s and Fannie Mae’s and Freddie Mac’s commitment to enhancing and streamlining processes to avoid foreclosure and stabilize communities,” said FHFA Acting Director Edward J. DeMarco. “The new standard short sale program will also provide relief to those underwater borrowers who need to relocate more than 50 miles for a job.”

The new guidelines:

  • Offer a streamlined short sale approach for borrowers most in need: To move short sales forward expeditiously for those borrowers who have missed several mortgage payments, have low credit scores, and serious financial hardships the documentation required to demonstrate need has been reduced or eliminated.
  • Enable servicers to quickly and easily qualify certain borrowers who are current on their mortgages for short sales: Common reasons for borrower hardship are death, divorce, disability, and distant employment transfer or relocation. With the program changes, servicers will be permitted to process short sales for borrowers with these hardships without any additional approval from Fannie Mae or Freddie Mac, even if the borrowers are current on their mortgage payments. Borrowers will now qualify for a short sale if they need to relocate more than 50 miles from their home for a job transfer or new employment opportunity.
  • Fannie Mae and Freddie Mac will waive the right to pursue deficiency judgments in exchange for a financial contribution when a borrower has sufficient income or assets to make cash contributions or sign promissory notes: Servicers will evaluate borrowers for additional capacity to cover the shortfall between the outstanding loan balance and the property sales price as part of approving the short sale.
  • Offer special treatment for military personnel with Permanent Change of Station (PCS) orders: Service members who are being relocated will be automatically eligible for short sales, even if they are current on their existing mortgages, and will be under no obligation to contribute funds to cover the shortfall between the outstanding loan balance and the sales price on their homes.
  • Consolidate existing short sales programs into a single uniform program: Servicers will have more clear and consistent guidelines making it easier to process and execute short sales.
  • Provide servicers and borrowers clarity on processing a short sale when a foreclosure sale is pending: The new guidance will clarify when a borrower must submit their application and a sales offer to be considered for a short sale, so that lastminute communications and negotiations are handled in a uniform and fair manner.
  • Fannie Mae and Freddie Mac will offer up to $6,000 to second lien holders
    to expedite a short sale. Previously, second lien holders could slow down the short sale process by negotiating for higher amounts.

This alignment comes as part of a broader FHFA effort, the Servicing Alignment Initiative, to streamline Fannie Mae and Freddie Mac programs for short sales and other foreclosure alternatives to assist struggling homeowners. FHFA announced guidelines in June that establish strict timelines for servicers considering short sales. Servicers are required to review and respond to short sales within 30 days of receipt of a short sale offer; they must provide weekly status updates to the borrower if the offer is still under review after 30 days, and they must make and communicate final decisions to the borrower within 60 days of receipt of the offer and complete borrower response package. These borrowers will not be eligible for a new mortgage backed by Fannie Mae or Freddie Mac for at least two years after a short sale.

FHFA encourages homeowners to reach out early to their lender or servicer if they face any hardship affecting their ability to pay their mortgage.

What is the National Mortgage Settlement?

(Office of the Attorney General website, 08/15/2012)

In California, our Attorney General, Kamala Harris, along with 48 other State’s Attorney Generals, have obtained a broad-ranging settlement from five major banks. If you are a homeowner struggling to pay your mortgage or facing foreclosure, or if you have already lost your home to foreclosure, it is possible that this settlement could help you. Not every homeowner will qualify for relief under the settlement. Those who do qualify may receive various forms of relief depending on their circumstances. Available forms of relief include: payments to borrowers who were wrongly foreclosed upon; reduction of unpaid principal balances; refinancing for borrowers whose homes are worth less than the money they owe; and the opportunity for short sales and other relocation assistance.

For detailed information about the settlement, please visit the National Mortgage Settlement website.

To find out if you may be eligible for a loan modification, refinance, short sale or other foreclosure prevention relief under the settlement, you will need to contact your mortgage servicer. To find the servicer on your loan, look for a contact phone number on your mortgage statement. Contact the bank or servicer listed on the statement to ask who services or owns your mortgage loan. For more details, please see the State of California DOJ website’s Frequently Asked Questions page.

The mortgage servicers participating in the settlement agreement are Citibank, JP Morgan Chase/Washington Mutual, Bank of America/Countrywide, Wells Fargo/Wachovia, and Ally Financial.

If you have already lost your home to foreclosure and believe you may qualify for restitution, please visit the National Mortgage Settlement website.

For a referral to a free HUD-Approved Housing Counselor who can assist you in applying for a modification under the settlement or in obtaining other help to stay in your home if you do not qualify for the settlement, please call (800) 569-4287.

Participating Mortgage Servicers

For Bank of America/Countrywide, call (877) 488-7814 or you may also go to a Bank of America Customer Assistance Center. You can find a list of such centers at the Bank of America Assistance Customer Center website.

Customer Service Center – Bank of America Home Loans Assistance Customer Center


For JPMorgan Chase/Washington Mutual, call (866) 372-6901 or you may also go to a Chase Homeownership Center. You can find a list of such centers at Chase’s Homeownership Center website.

Customer Service Center – Chase’s Homeownership Center

For Wells Fargo/Wachovia, call (800) 288-3212.

For Citibank/Citimortgage, call (866) 272-4749.

For Ally Financial-GMAC, call (800) 766-4622.

California Foreclosure Reform Signed Into Law

(Housingwire.com 07/11/2012)

Flag of the State of California
Flag of the State of California

California Gov. Jerry Brown signed into law the Homeowner Bill of Rights, a hotly debated piece of legislation that will reform foreclosure practices in the state.

Among other things, the bill ends dual tracking, in which banks were permitted to foreclose on homeowners while they were negotiating for a loan modification with their lender.

The legislation also institutes a single point of contact for homeowners who will no longer have to speak to a different person at the bank every time they call.

If a bank does not follow the new procedural rules, California homeowners can take the bank to court.

The bill was introduced by Attorney General Kamala Harris and championed by consumer advocates and homeowners.

Residing within it is the Foreclosure Reduction Act, which restricts the dual-tracked foreclosures and the Due Process Rights Act, which guarantees a single point of contact for struggling homeowners. Both were passed last week. The latter also imposes civil penalties for fraudulently signing foreclosure documents without verifying their accuracy, a practice that became known as the robo-signing scandal.

The bill, which takes effect on Jan. 1, 2013, will impose stricter rules on mortgage servicers seeking to nonjudicially foreclose on homes with mortgages in default and is expected to expose mortgage servicers to substantial new legal liability. Many industry groups argued the new legislation could add to the financial burden of distressed homeowners.

“The legislation extends the impact of the national mortgage settlement so that all homeowners in California, regardless of which bank services their loan, have the same protections and rights,” said Kevin Stein of the California Reinvestment Coalition. “This legislation should serve as a national model for other states looking to enforce the settlement and protect homeowners.”

That's One for the National Mortgage Settlement!

National Mortgage Settlement

Ok, so here it goes (two birds with one stone). I get to prove a point that there are legitimate homeowners with legitimate needs for a loan mod, and I’ve actually helped a homeowner SAVE their home, yippie!!!

It all started almost two years ago, September 8, 2010, I began the daunting process of assisting a friend with their HAMP loan mod (btw, I DO NOT DO LOAN MODS – was just helping a dear friend), with B of A, with no results. You know the drill, lost papers, please resend, false decline, file transferred to a new negotiator, etc, ad nauseum.

And then the AG Settlement happens!! <harp plays, angelic choir sings – angels descend from Heaven, 0:)> On Mach 12, 2012, the Justice Department, the Department of Housing and Urban Development (HUD) and 49 state attorneys general filed a landmark $25 billion agreement with the nation’s five largest mortgage servicers to address mortgage loan servicing and foreclosure abuses.

On May 9, 2012 we received notification that our original loan mod (HAMP) had been declined in error, but to resubmit everything for a new program called GSE Hardest Hit Fund (the Dept of Justice Global Settlement). We sent all required docs in on May 14, 2012, the file went to DOJ underwriting on June 29, 2012, and we got approved on July 27, 2012!

THE RESULTS OF THE APPROVAL
Previous Mortgage – $3300 (adjusted to $3600 during previous loan mod attempt) New Mortgage – $1041.96
Previous Principle Balance – $359,000
New Principle Balance – $236,900 (under the terms of the DOJ Settlement Loan Mod, Bank of America also agreed to forgive $122,099.98 of the previous loan)

Again, I DON’T DO LOAN MODS (only short sales, yayyyy!)

In closing, If you are a Bank of America Mortgage holder and would like to see if you may be eligible to apply for a DOJ Settlement Loan Mod or other compensation, call the B of A DOJ Mortgage Settlement Help Line at 877-488-7814 where you will be asked a series of questions, and they will tell you if you are eligible for a DOJ review.

If you are a mortgage holder of one of the other big five (Ally/GMAC, Bank of America, Citi, Chase, or Wells Fargo), visit this site for more information on how to contact those servicers.

Sorry, Fannie Mae, Freddie Mac, VA, and FHA loans do not qualify.

Make it a great day!

That’s One for the National Mortgage Settlement!

National Mortgage Settlement

Ok, so here it goes (two birds with one stone). I get to prove a point that there are legitimate homeowners with legitimate needs for a loan mod, and I’ve actually helped a homeowner SAVE their home, yippie!!!

It all started almost two years ago, September 8, 2010, I began the daunting process of assisting a friend with their HAMP loan mod (btw, I DO NOT DO LOAN MODS – was just helping a dear friend), with B of A, with no results. You know the drill, lost papers, please resend, false decline, file transferred to a new negotiator, etc, ad nauseum.

And then the AG Settlement happens!! <harp plays, angelic choir sings – angels descend from Heaven, 0:)> On Mach 12, 2012, the Justice Department, the Department of Housing and Urban Development (HUD) and 49 state attorneys general filed a landmark $25 billion agreement with the nation’s five largest mortgage servicers to address mortgage loan servicing and foreclosure abuses.

On May 9, 2012 we received notification that our original loan mod (HAMP) had been declined in error, but to resubmit everything for a new program called GSE Hardest Hit Fund (the Dept of Justice Global Settlement). We sent all required docs in on May 14, 2012, the file went to DOJ underwriting on June 29, 2012, and we got approved on July 27, 2012!

THE RESULTS OF THE APPROVAL
Previous Mortgage – $3300 (adjusted to $3600 during previous loan mod attempt) New Mortgage – $1041.96
Previous Principle Balance – $359,000
New Principle Balance – $236,900 (under the terms of the DOJ Settlement Loan Mod, Bank of America also agreed to forgive $122,099.98 of the previous loan)

Again, I DON’T DO LOAN MODS (only short sales, yayyyy!)

In closing, If you are a Bank of America Mortgage holder and would like to see if you may be eligible to apply for a DOJ Settlement Loan Mod or other compensation, call the B of A DOJ Mortgage Settlement Help Line at 877-488-7814 where you will be asked a series of questions, and they will tell you if you are eligible for a DOJ review.

If you are a mortgage holder of one of the other big five (Ally/GMAC, Bank of America, Citi, Chase, or Wells Fargo), visit this site for more information on how to contact those servicers.

Sorry, Fannie Mae, Freddie Mac, VA, and FHA loans do not qualify.

Make it a great day!

California Homeowner Bill of Rights passes, sent to governor

(Housingwire.com, July 2, 2012)

Image of State of California Flag

Two central provisions of the California Homeowner Bill of Rights passed the California State Legislature Monday.

The bills will travel to Gov. Jerry Brown’s desk, where other provisions of the bill also await approval. Brown has not indicated whether he will sign or veto the legislation.

The Assembly, by a vote of 53 to 25, and Senate, 24 to 13, approved the Foreclosure Reduction Act, which restricts the process of dual-tracked foreclosures and the Due Process Rights Act, which guarantees a single point of contact for struggling homeowners to discuss their loan. The latter also imposes civil penalties on the practice of fraudulently signing foreclosure documents without verifying their accuracy.

The Foreclosure Reduction Act bars lenders from filing notices of default, notices of sale, or conducting trustees’ sales while also considering alternatives to foreclosures like loan modifications or short sales.

“These common-sense reforms will require banks to treat California homeowners more fairly and bring more transparency and accountability to their practices in our state,” said California Attorney General Kamala Harris. “Responsible homeowners will have a better shot to keep their homes.”

The bills’ passage comes the day after the release of a study authored by research and consulting firm Beacon Economics on behalf of industry groups, concluding that if the Homeowner Bill of Rights were signed into law it would ultimately harm the vast majority of California homeowners.

The bills impose stricter rules on mortgage servicers seeking to nonjudicially foreclose on homes with mortgages in default and expose mortgage servicers to substantial new legal liability, according to Beacon.

Beacon argues the bills could add to the financial burden of distressed homeowners.

“The nonjudicial foreclosure process is more efficient compared to the judicial foreclosure process, and it comes with an important caveat,” the study notes. “When using nonjudicial foreclosure, lenders … cannot seek compensation for their mortgage losses out of the borrower’s other assets. If the nonjudicial route is lengthened and made more costly, many lenders may decide to pursue a judicial foreclosure … and thus pursue remedies like deficiency judgments, ultimately costing the borrower more in the long run,” the study said.

Calling the bills “monumental,” State Sen. Darrell Steinberg, D-Sacramento, said people came together from different points of views over the course of 20 hours.

“This is how the process should work,” Steinberg said. “We achieved a middle ground. Let this be the first of a number of things we get done this week.”