Transcript Module 3: The SSA

7 Pages
29
3-1
SSA Pg. 1: Cover Letter
(top)
Introduces Short Sale
29
3-2
SSA Pg. 1: Cover Letter
(bottom)
How a Short Sale Works
Participation
30
3-3
SSA Page 2 (top)
How a Short Sale Works
Participation
31
3-4
When to Take Listing
• At or prior to SSA
• Listing commission honored if
6% or less
• Required contract language
– SSA page 5
• Get subordinate
lien
info
31
3-5
SSA Page 2 Bottom
120 Days to sell
32
3-6
SSA Page 2 Bottom
Maintain property
32
3-7
SSA Page 2 Bottom
Monthly Payments?
Servicer may require monthly payments
up to 31% of Gross Income.
Freddie Mac requires payments
32
3-8
SSA Page 2 Bottom
Clear title & negotiate
with subordinate lien
holders
32
3-9
Note: SSA was not changed to reflect
Treasury’s
deletion of
rule to subordinate
SSA Page
2 6%
Bottom
lien holders. Fannie & Freddie still have the
6% rule.
• Servicer may pay up to
$6,000 aggregate total to
subordinate lien holders.
• No 6% maximum
33
3-10
Fannie & Freddie
One Subordinate Lien Payoff Examples
2nd lien of $50,000
$50,000 x 6% = $3,000
2nd lien of $100,000
$100,000 x 6% = $6,000
33
3-11
Fannie & Freddie
One Subordinate Lien Payoff Examples
2nd lien of $150,000
$150,000 x 6% = $9,000
$6,000 Max.
33
3-12
Fannie & Freddie
Two Subordinate Liens Payoff Examples
2nd lien of $50,000
3rd lien of $30,000
$50,000 x 6% = $3,000 to 2nd lien holder
$30,000 x 6% = $1,800 to 3rd lien holder
33
3-13
Fannie & Freddie
Two Subordinate Liens Payoff Examples
2nd lien of $90,000
3rd lien of $30,000
$90,000 x 6% = $5,400 to 2nd lien holder
$30,000 x 6% = $1,800
Only $600 to 3rd lien
33
3-14
Subordinate Liens
• Liens released from property
• Full release of liability
• No $$ or notes from seller or licensee
• HOA/Condo Assn. liens and other
subordinate liens must be included
• Seller should seek legal advice
regarding future liability
34
3-15
SSA Page 2 Bottom
Future paperwork.
Foreclosure postponed.
34
3-16
Foreclosure Postponement
• Foreclosure process may begin
• No foreclosure sale:
– Determining eligibility
– Awaiting SSA
– During SSA
– Pending closing
– Pending DIL
34
3-17
SSA Page 3 Top
Four points:
1. Arm’s length transaction
35
3-18
Arm’s Length Transaction
• Can’t list with or sell to:
– Related persons
– Persons with whom the seller has close
personal or business relationship
35
3-19
Arm’s Length Transaction
• Can’t list “In-House”
• From HAFA Q&A on www.REALTOR.org
– Q: May sellers who are real estate agents
list with their broker?
35-36
3-20
Arm’s Length Transaction
• Q: May sellers who are real estate agents list
with their broker?
• A: No, this would violate the arm's length
transaction provision that prevents the seller
from listing the property with anyone they
have a close personal or business
relationship with. This is an anti-fraud
provision. If the property is listed by an agent
with their broker the risk of an "incentive"
being paid and the seller profiting from the
transaction increases."
36
3-21
SSA Page 3 Top
1.
2.
3.
4.
36
Arm’s length transaction
No commission to seller
Resale restriction on buyer
Seller can’t buy-back or lease
3-22
SSA Page 3 Top
Authorization to talk to others
36
3-23
SSA Page 3 Top
Tax consequences notice
36
3-24
SSA Page 3 Top
Credit reported as: “settled for less
than full payment.”
36
3-25
SSA Page 3 Bottom
37
3-25
Deed-in-Lieu
•
•
•
•
•
After 120 day marketing period expires
Optional language
Voluntary transfer to lender
Borrower gets $3,000
Sub liens removed
– Up to $6,000 available
• If borrower uncooperative,
servicer forecloses
37
3-27
Deed-for-Lease Program
• After Deed-in-Lieu
• Servicer may allow
borrower to:
– Lease property back
(Deed-for-Lease)
– Repurchase property at
future date
38
3-28
SSA Page 4
38
3-29
Contract Acceptance & RASS
• 3 Biz days to submit:
– Purchase agreement
– Addenda
– RASS
– Buyer’s proof of funds
or commitment letter
• Approval or disapproval
within 10 Biz days
38
3-30
Pages 5-6: Program Terms & Conditions
1. List Price or Acceptable Sale Proceeds
38-39
3-31
Paragraph 1
List Price or Acceptable Proceeds
• Established through BPOs
• List price more likely
• Fannie & Freddie prohibit disclosing
minimum net proceeds
• Seller & licensee should be realistic
– Demonstrate to servicer why price
is too high
39
3-32
Paragraph 2
2. Listing Agreement
• Required clauses
• Cancellation
• Lender/MI approval
40
3-33
Paragraph 3
3. Property Maintenance & Expenses
• Seller responsible
• Damage reported
40
3-34
Paragraph 4
4. Partial Mortgage Payments
• Seller may be required to
make payments
• Cannot exceed 31% of
gross income
40
3-35
Paragraph 5
5a. Closing Costs
Servicer will select one:
•Total costs may not exceed $__________
• Total costs may not exceed _____% of list price
• Itemized allowable closing costs including
commission of _____% of sales price
41
3-36
Paragraph 5
5b. Subordinate Liens
•Subordinate Liens: Up to $6,000 total aggregate
• 6% of balance (Fannie & Freddie only)
•Full release of liability required
41
3-37
Paragraph 5
5c. Commissions
Commissions
42
3-38
Commissions
• Commission % stated
• Listing commission honored
• Not to exceed 6%
• No commission to seller or buyer
• If rebate offered, commission is
reduced
42
3-37
Third Party Vendors
• May be retained by servicer
• Fees cannot be charged to seller nor
deducted from commission
• Original SD 09-09 had vendor fee paid
from commission
• NAR fought for
change
42
3-40
Paragraph 5
5d. Relocation assistance
Relocation assistance for seller
•$3,000 per household
42
3-41
Paragraph 6
SSA Page 6
6. Sales Contracts
3 Biz days to submit:
• RASS
• Contract & Addenda
• Buyer’s proof of funds/commitment
letter
43
3-42
Paragraph 7
7. Parties to the Sale
Required contract language
• Arm’s length transaction
• Buyer can’t sell within 90 days
43
3-43
Paragraph 8
8. Closing
Required closing time frame can’t
be less than 45 days from contract
acceptance.
43
3-44
Paragraph 9
9. Foreclosure Sale Suspension
• Foreclosure
process may
continue
• Sale is suspended
43
3-45
Paragraph 10
10. Satisfaction & Release of Liability
• No personal liability
• No deficiency judgment
43
3-46
Paragraph 11
11. Mortgage Insurer Approval
MI approval required
44
3-47
Paragraph 12
12. Termination of this Agreement
Review reasons with seller
44
3-48
SSA Termination
• Financial position improves
• Borrower or Broker fails to act
in good faith
• Change in property condition
• Fraud or misrepresentation
• Bankruptcy
• Litigation
• Payments not made
44
3-49
Paragraph 13
13. Settlement of Debt
• No guarantees
• Lender retains other remedies
44
3-50
SSA Pg. 6
Servicer Signature & Date
• Effective date is “date mailed”
• Keep envelope
44
3-51
SSA Page 7:
Borrowers’ Signatures
• Exceptions:
•Death
•Divorce
•Special circumstances
45
3-52
SSA Page 7:
Broker Acknowledgement
• Broker not a party to SSA
46
• Salesperson may sign
• Agreement to change listing to conform
to SSA
3-53
SSA Page 7:
•Servicer contact info
•HOPE Hotline
•Fraud Notice
46
3-54
Sign & Return the SSA
• Within 14 days of “Effective Date”
• “Effective Date” = date mailed by
servicer
46
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