Transcript Module 5: Fannie & Freddie HAFA Programs

Module 5:
Fannie & Freddie
HAFA Programs
65
5-1
Fannie & Freddie
• Announced HAFA June 1, 2010
• Effective August 1, 2010
• Fannie & Freddie own the loans
– Are the ultimate decision makers
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5-2
Fannie & Freddie Eligibility
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Owner Occupied, 1-4 family
$729,750 balance (SFR)
1st position loans
Originated pre 1-1-09
Payment exceeds 31% of gross income
Hardship
Delinquent or default reasonably
foreseeable (Freddie requires borrower
be more than 60 days delinquent)
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5-3
Payment on 1st Lien
Exceeds 31% of Gross Income
• Includes:
Gross Income:
Includes All Income
–PITI
–Flood Ins., Condo Assn Fees & HOA
Fees
• Does not include:
–Mortgage Insurance
–Sub. lien payments
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5-4
Time Frames
From Time SSA Issued
• SSA returned within 14 days
• 120 days marketing period
– Freddie requires minimum 15
days notice for extensions
• RASS & contract returned
within 3 Biz days
• Approval or denial within 10
days
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5-5
Fannie & Freddie Closings
• Servicer can’t require
sooner than 45 days
from contract execution
• Can be ASAP but…
• …no later than 60 days
from contract
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5-5
Fannie & Freddie
Servicer Reimbursement
• $2,200 to servicer
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5-7
Standard Documents
• SSA
– Fannie has different order
– Some significant differences
• RASS
– Same as Treasury’s
• Alt. RASS
– Same as Treasury’s but…
– None for Freddie Mac
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5-8
Fannie Mae’s
HAFA Program
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5-9
Fannie Mae HAFA Details
• Guiding document
– SVC-2010-07
• Loans held by Fannie
– Some use Fannie HAFA
– Others use US Treasury HAFA
• Bottom line:
– Determine if loan owned by Fannie Mae
– Servicer will determine appropriate
program
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5-10
Special Permission
Required to Consider
Borrower for HAFA
• Foreclosure sale within 60 days of
short sale request
• Foreclosure proceeding could start
and finish within 60 days
• Certain Florida foreclosure
situations
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5-11
Borrower’s Financial Condition
Not Eligible if:
• Can make payments
• Has high surplus income
• Has substantial assets
– 3 x monthly payment or
– $5,000 whichever is greater
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5-12
Substantial Asset Examples
• Payment: $1,500 x 3 = $4,500
• Liquid assets can’t exceed $5,000
• Payment: $2,200 x 3 = $6,600
• Liquid assets can’t exceed $6,600
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Freddie Mac has same
Asset Test
5-13
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5-14
Fannie Mae SSA (Form 184)
• Similar to Treasury SSA
• Information re-ordered
• Some significant differences
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5-15
Fannie Mae SSA
Deed-in-Lieu
Fannie’s Deed for Lease (D4L)
• DIL to Fannie
• Fannie leases back to borrower
• Low rent for 6 months
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5-16
Fannie Mae SSA Page 3:
List Price
List price only. No MANP disclosed.
Treasury SSA
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List price or Acceptable Sales Proceeds
5-17
How Fannie Mae Determines
Price & MANP
• Recent BPO
• Approved Fannie Mae vendor
• List price based on MANP
• MANP
– Minimum Acceptable Net Proceeds
– Not disclosed to seller or broker
– Cannot be increased after SSA executed
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5-18
Commissions & 3rd Party Fees
Commission can’t exceed 6%
No 3rd. Party negotiator fees
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5-19
Listing Agent &
Servicer Duties
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Establish list price
Ensure marketing plan
Monthly feedback
Monthly comps
Adjust price as needed
Other FNMA
Differences
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Listing Agent &
Servicer Duties (cont’d.)
• Review sale contract as to HAFA
compliance
• Resolve title issues
• Provide closing instructions
• Review HUD-1 within 48 hours of
closing (servicer)
• Ensure sales proceeds received on
timely basis (servicer)
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Freddie Mac
HAFA
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5-22
Freddie Mac HAFA Details
• Guiding document
– Bulletin 2010-12
– Seller/Servicer Guide Chapter D65
• Similar to Treasury’s & Fannie’s
• No Alt. RASS
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5-22
No Alt. RASS
with Freddie Mac
• Sales contract received but seller
not in HAMP
• B-65 (Non-HAFA) short sale
No
Alt.
RASS
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5-24
Required Monthly Payments
• 31% of gross income
• Non-payment not sole grounds
for termination
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5-25
The REALTOR’S® Role
• REALTOR® knowledge &
assistance critical
• Learn the programs
• HAFA extends
thru 2012
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