MORTGAGE RELIEF OFFERED TO BORROWERS
BY THE
NATIONAL MORTGAGE SETTLEMENT
Issue |
Exhibit: ¶ or pg |
Description |
||
Basic Program Eligibility |
||||
What
are the program start & end dates |
CJ-14-15 |
April
4, 2012, to October 3, 2015; March 1, 2012, is the “start date” for the 12
months of 25% bonus credits |
||
Is
eligibility for relief restricted to certain mortgage origination dates? |
CJ Ex
D: 9 |
No
restriction, except for refinancing (must be prior to 1-1-09) |
||
Which
servicers are covered by the settlement? |
CJ |
Ally
Financial, Inc., GMAC Mortgage, LLC*, Residential Capital, LLC* [* filed Chapter 11 bankruptcy 5-14-12] Home Loans Servicing, LP f/k/a
Countrywide Home Loans Servicing, LP; Countrywide Financial
Corporation; Countrywide Mortgage Ventures, LLC; and
Countrywide Bank, FSB |
||
Are Fannie Mae and
Freddie Mac (GSE) loans serviced by the above servicers eligible for benefits
under the settlement? |
- |
No! Fannie
Mae and Freddie Mac are in a conservatorship and the conservator, the Federal
Housing Finance Agency (FHFA), has denied them the right to participate in
the settlement. |
||
Are
HUD, FHA, and VA loans serviced by the above servicers eligible for benefits
under the settlement? |
CJ |
Yes,
the federal government is a party to the settlement. |
||
Do
“second liens” referred to throughout the settlement include more junior
liens? |
- |
Unknown |
||
Is
there a standard application form for benefits under the settlement? |
- |
No |
||
What
is the application process? |
- |
There
is no specified application process. |
||
Servicing Standards – these protections only apply to
owner-occupied principal residences |
||||
Truthful affidavits, factual
assertions in pleadings, bankruptcy
proofs of claim, declarations, sworn statements |
Ex
A- I.A.1-3 |
Servicer
shall ensure that factual assertions filed by/on behalf of servicer are
supported by competent and reliable evidence; servicer shall ensure it has
reviewed competent and reliable evidence to substantiate borrower’s default
and foreclosure right |
||
Personal knowledge: affidavits, sworn
statements declarations |
Ex
A- I.A.1-3 |
Affiant
must have personally reviewed servicer’s books and records (in accordance
with state and federal evidentiary law) |
||
Hand signatures (except for permitted
electronic signatures) |
Ex
A- I.A.11 |
Signed
by hand signature of affiant except for permitted electronic signatures. Not
stamped or other electronic or mechanical signatures. |
||
Dated signatures |
Ex
A- I.A.13 |
Affiants
shall date their signatures |
||
File
accurate bankruptcy proofs of claim (POCs) |
Ex
A- I.A.15 |
Servicer
shall not file POC containing materially inaccurate information and must
amend inaccurate POCs within 30 days of notice of inaccuracy |
||
Not rely on robosigned
documents filed
in bankruptcy or judicial
foreclosure cases |
Ex
A- I.A.16 |
Servicer
may not rely on defective documents already filed in a case; shall replace defective
documents; and provide written notice to the borrower or borrower’s counsel. |
||
Required notification in judicial
foreclosures (post-judgment, pre-sale) where robosigned documents may have
been used |
Ex
A- I.A.17 |
Must
notify borrower or borrower’s counsel prior to proceeding with foreclosure
sale or eviction. |
||
Timely post loan
payments
for non-bankruptcy borrowers |
Ex
A- I.B.2 |
If
interest is calculated on daily accrual or interest method, post within two
days of receipt, and apply per loan documents; accept trial modification
payments; accept cure payments; accept and apply at least two non-conforming
payments. |
||
In
active Chapter 13 bankruptcy
cases, properly account for loan pmts received. |
Ex
A- I.B.11 |
Apply
payments according to plan; treat as cured; and provide payment
reconciliation at end of case |
||
Good faith attempt to
locate lost note |
Ex
A- I.C.4 |
Servicer
shall comply with applicable law in an attempt to establish ownership of the
note and the right to enforce. |
||
Servicer shall not
intentionally destroy or dispose of original notes. |
Ex
A- I.C.5 |
(that
are still in force.) |
||
Attach relevant
documents
to bankruptcy Proofs of Claim
(POCs) |
Ex
A- I.D.1.a |
If
note has been lost or destroyed, a lost note affidavit shall be submitted. |
||
Include
statement “setting forth the basis for asserting that the applicable party
has the right to foreclose” with bankruptcy
POC |
Ex
A- I.D.1.e |
Yes |
||
Bankruptcy POC shall be signed |
Ex
A- I.D.1.f |
Either
hand signed or by appropriate electronic signature by responsible personal
after reasonable investigation stating the information set forth in the POC
is true and correct |
||
Include
statement “setting forth the basis for asserting that the applicable party
has the right to foreclose” with bankruptcy
Motions for Relief from Stay (MRS) |
Ex
A- I.D.2.b |
If
not already filed with POC |
||
File “MRS Affidavit” in bankruptcy cases |
Ex
A- I.D.2.c |
Setting
forth details of loan default, and terms of any trial period or permanent
loan modification plan pending at the time of MRS filing, or whether the
debtor is being evaluated for a loss mitigation option. |
||
Servicer’s
foreclosure and bankruptcy counsel
and foreclosure trustees shall have access
to servicer’s books and records |
Ex
A- II.A.4 |
Necessary
to prepare pleadings and documents submitted in foreclosure and bankruptcy
proceedings |
||
Provide servicer
contact
for loss mitigation questions to servicer’s foreclosure and bankruptcy counsel. |
Ex
A- II.B.3 |
Yes |
||
Reiterates
FRBP re POCs, charges, etc. |
Ex
A- III.B.1 |
Yes |
||
Servicing Fee Restrictions |
||||
Servicing
fees must be reasonable, authorized, and disclosed. |
Ex
A- VI.
A & B |
Yes |
||
Late
fees restricted |
Ex
A- VI.B.4 |
No
additional late fees if payment is full payment with exception of prior late
fees; no late fees during evaluation of complete loan mod application, trial
period payments, short sale offer application |
||
Third
party fees restricted: property preservation, inspection, and valuation fees |
Ex
A- VI.C.1 |
No
preservation fees during loss mitigation application or performance unless
necessary; no inspection fees beyond GSE/HUD guidelines unless needed; no
valuation fees more frequent than 12 mos unless requested by borrower or
needed |
||
Servicer
mark-up on third party default or foreclosure-related services |
Ex
A- VI.C.5 |
Prohibited |
||
Servicer’s
attorney’s preparation fees or charges re bankruptcy POC or MRS document withdrawn or denied |
Ex
A-VI.D.1 |
If
withdrawn, denied, or amended due to substantial misstatement by servicer of
amount due, servicer’s fees are not collectible. |
||
Late
fees due to Chapter 13 bankruptcy
conduit plans |
Ex
A-VI.D.2 |
No
late fees charged if debtor’s payments to the Chapter 13 trustee are on time. |
||
Force-Placed Insurance |
||||
Force-placed
insurance restrictions |
Ex
A- VII |
If
federally related mortgage, warning letter to borrower is required; general
reasonableness |
||
General Loss Mitigation Bankruptcy Protections: “These requirements
are intended to apply to both government-sponsored and proprietary loss
mitigation programs and shall apply to subservicers performing loss
mitigation services on Servicer’s behalf.” |
||||
Discrimination
not permitted against bankruptcy debtors |
Ex
A – IV.L.1 |
“Servicer
may not deny any loss mitigation option to eligible borrowers on the basis
that the borrower is a debtor in bankruptcy so long as borrower and any trustee
cooperates in obtaining any appropriate approvals or consents.” |
||
Trial
period plans shall be extended as necessary to obtain bankruptcy court approval. |
Ex
A- IV.L.2 |
“Servicer
shall, to the extent reasonable, extend trial period loan modification plans as
necessary to accommodate delays in obtaining bankruptcy court approvals or
receiving full remittance of debtor’s trial period payments that have been
made to a chapter 13 trustee. In the
event of a trial period extension, the debtor must make a trial period
payment for each month of the trial period, including any extension month.” |
||
Servicer
will not obstruct borrower’s Chapter 13 bankruptcy
case due to a trial or permanent modification |
Ex
A- IV.L.3 |
“When
the debtor is in compliance with a trial period or permanent loan
modification plan, Servicer will not object to confirmation of the debtor’s
chapter 13 plan, move to dismiss the pending bankruptcy case, or file a MRS
solely on the basis that the debtor paid only the amounts due under the trial
period or permanent loan modification plan, as opposed to the non-modified
mortgage payments.” |
||
General Loss Mitigation: “These requirements
are intended to apply to both government-sponsored and proprietary loss
mitigation programs and shall apply to subservicers performing loss
mitigation services on Servicer’s behalf.” |
||||
Servicer
shall solicit non-bankruptcy
borrowers re loss mitigation options |
Ex
A- IV.A.1 |
Prior
to foreclosure, servicers must solicit eligible borrowers for loss mitigation
evaluation – but not required for
bankruptcy borrowers |
||
Servicer
shall offer loan modification rather than initiate foreclosure |
Ex
A- IV.A.2 |
if
NPV is positive regarding the modification and it meets investor requirements |
||
Dual track* restricted: if substantially
complete loan mod package is received when loan is <= 120 days delinquent *
“dual track” is when the servicer both
(1) evaluates a loan modification application, and (2) also moves
ahead with the foreclosure sale process |
Ex
A- IV.B.1 |
“If
loan has not already been referred to foreclosure,” if less than 120 days
delinquent, the servicer shall not refer for foreclosure until: a) servicer
determines (after automatic review) that borrower is not eligible for loan
mod; or b) borrower does not accept offered “foreclosure prevention
alternative” within 14 days of evaluation notice |
||
Dual track restricted: if after referred for
foreclosure, a solicited borrower (a bankruptcy borrower not required
to be solicited) may become eligible for foreclosure protection |
Ex
A- IV.B.2 |
if
servicer received complete application form within 30 days of the
solicitation letter, etc., [multiple possibilities here] |
||
Dual track restricted: foreclosure sale or
request for court order is delayed if loan modification is offered to
borrower |
Ex
A- IV.B.4 |
Foreclosure
sale or court sale order is delayed to earlier of: 14 days after offer, or
date borrower declines offer |
||
Dual track restricted: referral for
foreclosure is delayed further if borrower accepts loan mod alternative |
Ex
A- IV.B.2 |
until
breach of trial period plan. |
||
Dual track restricted: no foreclosure sale
if borrower complies with loan mod, has an approved short sale or
deed-in-lieu |
Ex
A- IV.B.11 |
Yes |
||
Servicer
shall promptly notify borrower in writing of new foreclosure sale date |
Ex
A- IV.B.12 |
if
the foreclosure sale is continued (rather than cancelled) to provide time to
evaluate loss mitigation options. |
||
Single
Point of Contact (SPOC) |
Ex
A- IV.C. |
Yes,
servicer shall establish a SPOC for each potentially-eligible first lien
mortgage borrower. |
||
Single
Point of Contact (SPOC) for bankruptcy
debtors are to be specially trained in bankruptcy
issues |
Ex
A- IV.C.2.a &
C.9 |
Yes,
and servicers are to establish a toll-free number staffed by
bankruptcy-trained persons to answer questions from Chapter 13 trustees. |
||
Loan
Modification Timeline |
Ex
A- IV.F |
Within # days Event
By 3
business days Written
acknowledgment of document [S] 5
business days Notify borrower of
known deficiencies [S] 30
days To
supply missing documents [B] 30
days Decide
disposition of loan mod appl [S] 10
days Notify borrower if appl is
denied [S] - Usually, if 1st
denial, 2nd evaluation* [S] 30
days Borrower may
contest denial [B] 45
days Send 2nd
lien mod info, after 1st lien mod [S] 90
days Signed documents
good after receipt - 45
days Send fully
executed loan mod copy to [S] borrower *
called “independent review” but can be done by another employee |
||
Transferring
servicing rights should not terminate a loan modification |
Ex
A- IV.M |
Yes |
||
Disposition of Cash to Already Foreclosed Borrowers |
||||
Possible
cash compensation to already foreclosed borrowers, if foreclosure sales during
1-1-08 to 12-31-11 |
Ex
C |
Servicer
provides borrower data to State Administrators, who contact eligible
borrowers and distribute funds (retaining costs of administration). Nationwide
total for all servicers is $1,489,813,925 |
||
Consumer Relief for Borrowers Not Yet Foreclosed |
||||
All
types of “Consumer Relief” available include: |
Ex
D |
Loan
modifications (firsts and seconds), relocation assistance (“cash for keys”),
short sales, deficiency waivers, forbearance for unemployed borrowers,
anti-blight provisions, servicemember benefits |
||
Only
owner-occupant borrowers eligible? |
Ex
D- 2 |
No,
up to 15% of first lien credits can be for non-owner-occupied and
non-conforming loans. |
||
Other
eligibility requirements |
Ex
D- 2 |
Pre-modification
= 100+% LTV; 30 days delinquent or imminent risk of default due to borrower’s
financial situation |
||
Dual
track restrictions (foreclosure & modification analysis at same time) |
Ex
A- 17 |
Dual
track prohibition only if loan is not more than 120 days delinquent |
||
Right
of appeal if loan modification is denied? |
Ex
A- 27 |
Yes
|
||
Back-end
DTI requirements |
Ex
D- 3
& 5 |
Targeting
25-31% including junior liens; DTI requirements for 1st liens
waived if 180+ days delinquent, if 20% write-down & resulting LTV <=
120% |
||
Back-end
LTV ratios, calculated according to HAMP-PRA |
Ex
D- 3 |
Targeting
<= 120% LTV |
||
Principal
writedowns offered for 1st liens? |
Ex
D- 2 |
Reduce
by at least 10% to achieve target of 31% DTI &
120% LTV |
||
Principal
writedowns for delinquent 2nd liens – no 1st modification or
different 1st lien servicer |
Ex
D- 5 |
Reduce
principal to 100% LTV |
||
If
servicer owns 2nd, 1st lien is reducing principal, is write-down
of 2nd lien required? |
Ex
D- 5 |
Yes,
if 2nd lien => $5,000 UPB & monthly payments => $100/mo |
||
Short
sale assistance |
Ex
D- 6 |
8%
of UPB, => $2,000 and <= $8,500 if unrelated lienholder; required
to extinguish own 2nd lien if 1st lien LTV => 100% |
||
First Lien Mortgage
Modifications: general provisions |
Ex
D- 2 |
85+%
of first lien credits are to be for owner-occupied loans within the
conforming-GSE limits; 30 days delinquent/ imminent default; pre-modification
LTV > 100%; post-modification target (first lien) DTI of 31% and
post-modification LTV <= 120%; reduce monthly principal + interest payment
by 10+%; if LTV > 120% @ 31% DTI, must reduce to 120% and < 25% DTI without
negative NPV. |
||
For
loans in servicer’s own portfolio: if borrower is granted first lien immediate principal forgiveness
modification |
Ex
D1- 1 |
Credits: 100% for LTV <=
175%; 50% for portion forgiven > 175% LTV Credit Cap/Min: Min = 30%, up to 2.5%
reduction in minimum for excess refinancing credits |
||
For
loans in servicer’s own portfolio: if borrower is granted first lien
principal forgiveness modification earned
over up to three years |
Ex
D1- 2 |
Credits: 85% for LTV <=
175%; 45% for portion forgiven > 175% LTV Credit Cap/Min: None |
||
For
loans in servicer’s own portfolio: if borrower is granted first lien
principal forbearance modification |
Ex
D1- 1 |
Credits: 40% Credit Cap/Min: Max 12.5% |
||
For
loans serviced for other investors: if borrower is granted first lien immediate principal forgiveness
modification |
Ex
D1- 2 |
Credits: 45% Credit Cap/Min: None |
||
For
loans serviced for other investors: if borrower is granted first lien
principal forgiveness modification earned
over three years |
Ex
D1- 2 |
Credits: 40% for LTV <=
175%; 20% for portion forgiven > 175% LTV Credit Cap/Min: None |
||
Second lien
Modifications NMS
credits + HAMP-PRA credits, if 2nd is eligible for HAMP-2MP (1st
mod) |
Ex
D- 4
& 2 |
Credit Minimum: 60% for 1st
and 2nd lien modifications (primarily principal write-downs); and
the 60% can be reduced by up to 10% of excess refinancing credits, if any. |
||
0-90
days delinquent 2nd liens: write-down
of principal |
Ex
D1- 2 |
Credits:90% Credit Cap/Min: None |
||
91-179
days delinquent 2nd liens: write-down
of principal |
Ex
D1- 3 |
Credits:50% Credit Cap/Min: None |
||
180+
days delinquent 2nd liens: write-down
of principal |
Ex
D1- 3 |
Credits: 10% Credit Cap/Min: None |
||
Cash for Keys – “Enhanced Borrower
Transitional Funds” – payment by servicer |
Ex
D1- 3 |
Credits: 100% for amount over
$1,500 Credit Cap/Min: 5% [combined] |
||
Cash
for Keys – “Enhanced Borrower Transitional Funds” – payment by non-GSE
investor |
Ex
D1- 3 |
Credits: 45% Credit Cap/Min: 5% [combined] |
||
Short
sale/deed-in-lieu: payment
to unrelated 2nd lien holder to release lien |
Ex
D1- 3 |
Credits: 100% Credit Cap/Min: None |
||
Short
sale/deed-in-lieu: deficiency
forgiveness & lien release on 1st lien in servicer’s portfolio |
Ex
D1- 3 |
Credits: 45% Credit Cap/Min: None |
||
Short
sale/deed-in-lieu: deficiency
forgiveness & lien release on 1st lien by investor |
Ex
D1- 3 |
Credits: 20% Credit Cap/Min: None |
||
Short
sale/deed-in-lieu: deficiency
forgiveness & lien release on 2nd lien in servicer’s portfolio 0-90
days delinquent |
Ex
D1- 3-4 |
Credits: 90% Credit Cap/Min: None |
||
Short
sale/deed-in-lieu: deficiency
forgiveness & lien release on 2nd lien in servicer’s portfolio 91-179
days delinquent |
Ex
D1- 4 |
Credits: 50% Credit Cap/Min: None |
||
Short
sale/deed-in-lieu: deficiency
forgiveness & lien release on 2nd lien in servicer’s portfolio 180+
days delinquent |
Ex
D1- 4 |
Credits: 10% Credit Cap/Min: None |
||
Deficiency waivers on 1st and
2nd liens, requires enforceable deficiency |
Ex
D1- 4 |
Credits: 10% Credit Cap/Min: 10% |
||
Unemployed homeowner assistance: forgiveness of
arrearages |
Ex
D1- 4 |
Credits: 100% Credit Cap/Min: None |
||
Unemployed
homeowner assistance: forbearance of
arrearages |
Ex
D1- 4 |
Credits: 5% Credit Cap/Min: None |
||
BOA/CFC (Bank of |
||||
Value
of 1st lien forgiveness required in addition to the nationwide
commitment; otherwise,
to the extent not met will pay the balance of the cash to FHA at 3 years |
Ex
I |
$850,000,000 |
||
BOA-SLMP |
Ex
I |
Eligibility:
borrower: economic hardship,
60+ days delinquent as of 1-31-12, DTI >= 25%; was owner-occupant @
origination; no default on prior HAMP-type modification; BOA/CFC is “not
prohibited or prevented by law or by contract either from soliciting or from
providing principal modification” property: underwater re first
liens mortgages: first liens, serviced
by BOA/CFC and part of CW securitization or BOA portfolio (permitted to be
modified) Process: BOA
must solicit some borrowers, other qualifying borrowers may apply on their
own Required
documents for application: credit
report; if employed, most recent paystub; if self-employed, completed P&L
template & verbal confirmation; if alimony/child support,
order/agreement, most recent bank statement/deposit slip/canceled check as
evidence; if SS/ disability/pension/ public assistance, award letter/most
recent bank statement (if non-taxable, they need 4506T??); if rental income,
signed letter from borrower, most recent bank statement/deposit slip/canceled
check; if unemployment benefits, benefit letter supporting 12-mo continuance,
2 most recent bank statements/deposit slips/canceled checks/or 4506T. Modification
waterfalls: i.
Capitalize delinquent interest and late
fees; ii.
Forgive principal to achieve 25% DTI, not requiring LTV below 100%; iii.
After step ii if DTI > 31%, reduce interest down to 2% to achieve 31% DTI,
calculating interest steps as in HAMP; iv.
After step iii if DTI > 31%, forbear principal to achieve 31% DTI; v.
Limit forbearance and forgiveness to not result in less than 70% LTV; vi.
NPV must be positive, reverse the above steps in order to achieve positive
NPV. Key factors driving the NPV
results are value of the property
and gross income of borrower. |
||
Credits
against $850,000,000 cash payment (see above) |
Ex
I- 3 |
Per
Ex D, but credits begin only after “Consumer Relief” minimum (30%) is
reached, subject to reduction of 2.5% for possible excess refinancing credits |
||
Ally/GMAC Mortgage/Residential Capital “ResCap Settlement
Loan Modification Programs” (ResCap-SLMP) (Exhibit I) |
||||
Commitment
of additional funds for Consumer Relief |
Ex
I |
$200,000,000 |
||
ResCap-SLMP
Rate Reduction Refinancing Program (RRRP) |
Ex
I- 2 |
Eligible borrowers: not delinquent, and
delinquent no more than 30 days within the last 12 months Eligible loans: originated prior to
1-1-09; current interest >= 5.25%; LTV> 100% or LTV> 80% if FICO
score < 660 Modification: reduce interest rate
to 3.9% (PMMSR as of 3-1-2012; minimum relief $100/month; no future interest
rate increases, changes in term, or additional costs to borrower |
||
ResCap-SLMP
Principal Reduction Modification Program (PRMP) for current borrowers – Underwater with Credit Degradation |
Ex
I- 3-4 |
Eligible borrowers: current borrowers;
not more than 30 days delinquent twice within the last 12 months; not more
than 60 days delinquent once within the last 12 months; and FICO < 675 or
FICO has reduced more than 10% since loan origination Eligible loans: originated prior to
1-1-09; LTV>100%; cannot be an interest-only loan Modification
waterfalls: a
HAMP-PRA or a proprietary PRA modification, as follows: i.
no underwriting based on income is necessary ii.
reduce principal down to LTV 100% or lower; minimum principal reduction of
10% |
||
ResCap-SLMP
Principal Reduction Modification Program (PRMP) – Payment Shock Relief |
Ex
I- 4 |
Eligible borrowers: current borrowers Eligible loans: originated prior to
1-1-09; LTV>100%; must be an interest-only loan or other high-risk product
that will reset, resulting in a payment shock to the borrower (in imminent
risk of default) Modification: convert to fully amortizing fixed rate
mortgage, reduce
principal to <+ 100% LTV, achieve monthly payment no higher than current
payment by reducing principal |
||
ResCap-SLMP
Principal Reduction Modification Program (PRMP) – Principal Reduction for Delinquent Borrowers |
Ex
I- 4-5 |
Eligible borrowers: borrower at least 30
days delinquent or at “imminent risk of default” Eligible loans: LTV > 100% Modification: Subject to borrower
“underwriting based on HAMP guidelines,” modification will include: i. reduce principal to between 85% and 105%
LTV ii.
if adjustable rate, convert to fixed rate interest iii.
monthly payment reduction >= 30% iv.
monthly payment reduction to achieve <= 31% DTI |
||
ResCap-SLMP
Principal Reduction Modification Program (PRMP) – Second Lien Reduction Program |
Ex
I- 5 |
Eligible borrowers: 1st lien
was modified under “Consumer Relief” program, or borrower is 30+ days
delinquent on 2nd lien (regardless of whether 1st was
modified or is delinquent) Eligible loans: CLTV > 115% Modification
waterfalls: i. reduce borrower’s CLTV to <= 115% ii.
reduce monthly payment on remaining 2nd lien according to HAMP-2MP
methodology, by reducing principal, interest rate, then term extension |
||
Borrowers
who are eligible for both RRRP and PRMP |
Ex
I- 6 |
Proactively
solicit for RRRP; evaluate for PRMP only if borrower indicates the RRRP
payment is not sustainable |
||
Solicitation
of eligible borrowers |
Ex
I- 6-10 |
Detailed
solicitation requirements, similar to HAMP “right party contact”
requirements. Minimum duration of
solicitation period is 3 months. There does not seem to be an exclusion of
bankruptcy debtors from the right to be solicited. |
||
Deferment
of foreclosure sales |
Ex
I- 2 |
“From
[March 1, 2012] until completion of the Solicitation Requirements or proper
denial of the borrower for relief under this agreement, whichever is
earlier, the ResCap Parties will defer any foreclosure sales on any
Eligible Borrower.” |
||
Refinancing Benefits for Current Borrowers |
||||
Refinancing
offered? |
Ex
D- 9 |
Eligible if all: originated before
1-1-09, current LTV > 100%, and current interest rate => 5.25% appx Not eligible if any: FHA/VA loan; loan in
foreclosure w/in 24 months; manufactured homes; or no bankruptcy within 24 months |
||
Bonus
credits for additional refinancing beyond the commitment |
Ex
D- 9.f |
25%
bonus credit applied to 1st lien principal reduction commitment;
75% bonus credit applied to 2nd lien principal reduction
commitment; subject to stated limits. |
||
Anti-Blight Provisions |
||||
Community
blight measures |
Ex
A- VIII.A |
Servicer
to work with local programs to implement anti-blight measures, including
discount sale or donation of low-value REO properties for demolition or
salvage; if servicer is not going to
foreclose on property, release lien to borrower and notify local governments |
||
Forgiveness
for borrower re property on which servicer elects not to foreclose |
Ex
D1- 4 |
Credits: 50% Credit Cap/Min: 12% [combined] |
||
Servicer
demolition cash costs |
Ex
D1- 5 |
Credits: 100% Credit Cap/Min: 12% [combined] |
||
Donated
REO properties |
Ex
D1- 5 |
Credits: 100% Credit Cap/Min: 12% [combined] |
||
Protections for Military Personnel – Ex A. §V. |
||||
Timing, Incentives, Payments for Nationwide Commitments |
||||
Start
date for activities entitled to credits |
Ex
D- 10.a |
March
1, 2012 |
||
25%
incentive credit for activities within first 12 months |
Ex
D- 10.b |
1st
and 2nd lien principal reductions; refinancing credits |
||
Target
of 75% completion of “Consumer Relief” credits within two years of March 1,
2012 (February 28, 2014) |
Ex
D- 10.c |
Test
#1 for later penalties. |
||
Target
of 100% completion of “Consumer Relief” credits within three years of March
1, 2012 (February 28, 2015) |
Ex
D- 10.d |
Test
#2. If
only test #2 is unmet, servicer pays 125% of unmet three-year commitment
amount. If
servicer fails to meet both tests #1 and #2, servicer pays 140% of unmet
three-year commitment. If
the servicer has to pay penalties for state Side Agreements, the servicer can
claim a credit against the nationwide penalty for any state penalties. |
||
State
Side Agreements also may include penalties for the servicers |
- |
See
the Side Agreements. |
||
|
||||
CONTACT INFORMATION |
||||
Joseph
A. Smith, Jr., Monitor & President Office
of Mortgage Settlement Oversight 919-825-4748
website:
mortgageoversight.com |
Fannie Mae mortgage
look-up: 1-800-7FANNIE
(8am-8pm EST) www.fanniemae.com/loanlookup |
|||
Katherine
Porter, Professor
of Law, UC Irvine
|
Freddie Mac mortgage
look-up: 1-800-FREDDIE
(8am-8pm EST) www.freddiemac.com/mymortgage |
|||
GLOSSARY |
||||
CJ |
Consent
Judgment – the basic document |
|||
CLTV |
Combined
loan-to-value ratio – includes junior liens, as well as first liens (see LTV
below) |
|||
Conforming |
Refers
to mortgage balances that conform with (do not exceed) the highest GSE (Fannie/Freddie) loan limit
for the local geographic area of the property. Some areas are designated high
cost areas and have higher loan limits. |
|||
DTI |
Debt-to-income
ratio. Front-end DTI is the borrower’s
DTI (based on borrower’s gross monthly income) before the modification occurs
and only takes into account current monthly payments on the first lien (not
on junior liens). Back-end DTI is the borrower’s
projected DTI (based on borrower’s gross monthly income) after the proposed
modification occurs and takes into account all liens on the home. |
|||
Dual
track |
The
process of the servicer simultaneously: (1) evaluating a loan modification
application and (2) also moving ahead with the foreclosure sale process. |
|||
Forbearance |
Retaining
the full balance of the mortgage, but deferring a non-interest bearing
balloon of a portion of the balance to the end of the amortized period. A “balloon payment.” |
|||
Forgiveness |
Writing
down or wiping out a portion of the mortgage balance. |
|||
FRBP |
Federal
Rules of Bankruptcy Procedure |
|||
GSE |
Government
sponsored entity, includes Fannie Mae, Freddie Mac & regional Federal
Home Loan Banks |
|||
HAMP |
Home
Affordable Modification Program |
|||
HAMP-2MP |
Home
Affordable Modification Program – 2nd lien modification program |
|||
HAMP-PRA |
Home
Affordable Modification Program – Principal Reduction Alternative (enhanced
incentives for principal write-down |
|||
LTV |
Loan-to-value
ratio – generally is measured only by the amount of the first lien |
|||
MRS |
Bankruptcy
Motion for Relief from the automatic Stay |
|||
NPV |
Net
present value – mathematical test to determine if a proposed modification
would, over time, be financially better for the investor than a present
foreclosure sale |
|||
Non-conforming |
Refers
to mortgage balances that do not comply with (exceed) the highest GSE
(Fannie/Freddie) maximum loan for the local geographic area of the property.
Some areas are designated high cost areas and have higher maximums than other
areas. |
|||
PMMSR |
Freddie
Mac “Primary Mortgage Market Survey” rate of interest on first mortgages |
|||
POC |
Bankruptcy
proof of claim |
|||
PRA |
Principal
Reduction Alternative |
|||
SPOC |
Single
Point of Contact |
|||
UPB |
Unpaid
principal balance |
|||