Independent Foreclosure Review FAQs

 

Q1. What is the Independent Foreclosure Review?

As part of a consent order with federal bank regulators, the Office of the Comptroller of the Currency (OCC), the Office of Thrift Supervision (OTS) (independent bureaus of the U.S. Department of the Treasury), or the Board of Governors of the Federal Reserve System, 14 mortgage servicers and their affiliates are identifying customers who were part of a foreclosure action on their primary residence during the period of January 1, 2009 to December 31, 2010.

The Independent Foreclosure Review is providing homeowners the opportunity to request an independent review of their foreclosure process. If the review finds that financial injury occurred as a result of errors, misrepresentations or other deficiencies in the servicer’s foreclosure process, the customer may receive compensation or other remedy.

Q2. What is a foreclosure action? What foreclosure actions are part of the Independent Foreclosure Review?

Foreclosure actions include any of the following occurrences on a primary residence between the dates of January 1, 2009 and December 31, 2010:

• The property was sold due to a foreclosure judgment.
• The mortgage loan was referred into the foreclosure process but was removed from the process because payments were brought up-to-date or the borrower entered a payment plan or modification program.
• The mortgage loan was referred into the foreclosure process, but the home was sold or the borrower participated in a short sale or chose a deed-in-lieu or other program to avoid foreclosure.
• The mortgage loan was referred into the foreclosure process and remains delinquent but the foreclosure sale has not yet taken place.

Q3. How do I know if I am eligible for the Independent Foreclosure Review?

Your loan must first meet the following initial eligibility criteria:

• Your mortgage loan was serviced by one of the participating mortgage servicers in Question 4.
• Your mortgage loan was active in the foreclosure process between January 1, 2009 and December 31, 2010.
• The property was your primary residence.

If your mortgage loan does not meet the initial eligibility criteria outlined above, you can still have your mortgage concerns considered by calling or writing your servicer directly.

Q4. Who are the participating servicers? What mortgage servicers and their affiliates are part of the Independent Foreclosure Review process?

The list of participating servicers includes:

• America’s Servicing Co.
• Aurora Loan Services
• Bank of America
• Beneficial
• Chase
• Citibank
• CitiFinancial
• CitiMortgage
• Countrywide
• EMC
• EverBank/EverHome Mortgage Company
• GMAC Mortgage
• HFC
• HSBC
• IndyMac Mortgage Services
• MetLife Bank
• National City Mortgage
• PNC Mortgage
• Sovereign Bank
• SunTrust Mortgage
• U.S. Bank
• Wachovia Mortgage
• Washington Mutual (WaMu)
• Wells Fargo Bank, N.A.

Q5. What are some examples of financial injury due to errors, misrepresentations or other deficiencies in the foreclosure process?

Listed below are examples of situations that may have led to financial injury. This list does not include all situations.

• The mortgage balance amount at the time of the foreclosure action was more than you actually owed.
• You were doing everything the modification agreement required, but the foreclosure sale still happened.
• The foreclosure action occurred while you were protected by bankruptcy.
• You requested assistance/modification, submitted complete documents on time, and were waiting for a decision when the foreclosure sale occurred.
• Fees charged or mortgage payments were inaccurately calculated, processed, or applied.
• The foreclosure action occurred on a mortgage that was obtained before active duty military service began and while on active duty, or within 9 months after the active duty ended and the servicemember did not waive his/her rights under the Servicemembers Civil Relief Act.

Q6. How does my mortgage loan get reviewed as part of the Independent Foreclosure Review?

Homeowners meeting the initial eligibility criteria will be mailed notification letters with an enclosed Request for Review Form by December 31, 2011.

If you believe that you may have been financially injured, you must submit a Request for Review Form postmarked no later than April 30, 2012. Forms postmarked after this date will not be eligible for the Independent Foreclosure Review.

If you have more than one mortgage account that meets the initial eligibility criteria for an independent review, you will receive a separate letter for each. You will need to submit a separate Request for Review Form for each account. It is important that you complete the form to the best of your ability. All information you provide may be useful.

Q7. How can I submit the Request for Review Form?

Homeowners meeting the initial eligibility criteria will be mailed notification letters with an enclosed Request for Review Form before the end of 2011. If you received the notification letter, you can send in your Request for Review Form in the prepaid envelope provided, postmarked no later than April 30, 2012.

If your loan is part of the initial eligible population and you need a new form by mail, have questions, or need help completing the form you have received in the mail, call 1-888-952-9105, Monday through Friday, 8 a.m.–10 p.m. ET or Saturday, 8 a.m.–5 p.m. ET.

Q8. Who can submit or sign the Request for Review Form?

Either the borrower or a co-borrower of the mortgage loan can submit and sign the form. The borrower signing the Request for Review Form should be authorized by all borrowers to proceed with the request for review. In the event of a finding of financial injury, any possible compensation or remedy will take into consideration all borrowers listed on the loan, either directly or to their trusts or estates.

Q9. What if one of the borrowers has died or is injured or debilitated?

Any borrower, co-borrower or attorney-in-fact can sign the form. In the event of a finding of financial injury, any possible compensation or other remedy will take into account all borrowers listed on the mortgage loan either directly or to their trusts or estates.

Q10. Do I need an attorney to request or submit the Request for Review Form?

No. However, if your mortgage loan meets the initial eligibility criteria and you are currently represented by an attorney with respect to a foreclosure or bankruptcy case regarding your mortgage; please refer to your attorney.

The Independent Foreclosure Review is FREE. Beware of anyone who asks you to pay a fee in exchange for a service to complete the Request for Review Form.

Q11. If I have already submitted a complaint to my servicer, do I need to submit a separate Request for Review Form to participate in this process?

If your mortgage loan meets the initial eligibility criteria, you should submit a Request for Review Form to ensure your foreclosure action is included in the Independent Foreclosure Review process.

Q12. What happens during the review process?

You will be sent an acknowledgement letter within one week after your Request for Review Form is received by the independent review administrator. Your request will be reviewed for inclusion in the Independent Foreclosure Review. If your request meets the eligibility requirements, it will be reviewed by an independent consultant.

Your servicer will provide relevant documents along with any findings and recommendations related to your request for review to the independent consultant for review. Your servicer may be asked to clarify or confirm facts and disclose reasons for events that occurred related to the foreclosure process. You could be asked to provide additional information or documentation. Because the review process will be a thorough and complete examination of many details and documents, the review could take several months.

The Independent Foreclosure Review will determine whether financial injury has occurred as a result of errors, misrepresentations or other deficiencies in the foreclosure process. You will receive a letter with the findings of the review and information about possible compensation or other remedy.

Q13. How do I know who my servicer is? How do I find them?

The company you sent your monthly mortgage payments to is your mortgage servicer. It is not necessarily the company whose name is on the actual foreclosure documents (although in most cases, it is). If you don’t remember the name of the servicer for your foreclosed property, we suggest you review cancelled checks, bank statements, online statements or other records for this information.

If you are still unsure of who your mortgage servicer is or do not see their name listed in Q4, please call 1-888-952-9105, Monday through Friday, 8 a.m.–10 p.m. ET or Saturday, 8 a.m.–5 p.m. ET.

Q14. If I request an Independent Foreclosure Review, is there a cost or will there be a negative impact to my credit?

The Independent Foreclosure Review is a FREE program. Beware of anyone who asks you to pay a fee in exchange for a service to complete the Request for Review Form.

The review will not have an impact on your credit report or any other options you may pursue related to your foreclosure.

Q15. Where can I call if I need help completing the form or have any questions about the review process?

Call 1-888-952-9105 Monday through Friday, 8 a.m.–10 p.m. ET or Saturday, 8 a.m.–5 p.m. ET. If you have already submitted a Request for Review Form, please have your Reference Number available to expedite your call.

Q16. How are military servicemembers affected by the Independent Foreclosure Review?

In the review, servicers are required to include all loans covered by the Servicemembers Civil Relief Act that meet the qualifying criteria. However, servicemembers or co-borrowers may also request a review through this process. Financial injury may have occurred if the foreclosure action occurred on a mortgage that was obtained before active duty military service began and while on active duty, or within 9 months after the active duty ended.

Q17. How am I affected if I submit a Request for Review Form while in active bankruptcy?

If you submit a Request for Review Form and a review is conducted of your foreclosure process, this will have no impact on your bankruptcy. The letter being sent to you about the Independent Foreclosure Review is not an attempt to collect a debt. If you are in bankruptcy, please refer this letter to your attorney.

Q18. I’m still working with my servicer to prevent a foreclosure sale. Will I still be able to work with them?

Yes, continue to work with your servicer. Participating in the review will not impact any effort to prevent a foreclosure sale. The review is not intended to replace current active efforts with your servicer.

Q19. How long will the review process take and when can I expect a response?

You will be sent an acknowledgement letter within one week after your Request for Review Form is received by the independent review administrator. Because the review process will examine many details and documents, the review could take several months. The Independent Foreclosure Review will determine if financial injury occurred as a result of the servicer’s errors, misrepresentations or other deficiencies in the foreclosure process. You will receive a letter with the findings of the review and information about possible compensation or other remedy. Not every finding will result in compensation or other remedy.

Q20. What happens if the review finds that I was financially injured as a result of errors, misrepresentations or other deficiencies in the foreclosure process?

You will receive a letter with the findings of the review and information about possible compensation or other remedy. The compensation or other remedy you may receive will be determined by your specific situation. Not every finding will result in compensation or other remedy.

Q21. What happens if the review finds that I was not financially injured as a result of errors, misrepresentations or other deficiencies in the foreclosure process?

You will receive a letter with the findings of the review. Not every finding will result in compensation or other remedy.

Q22. What if I disagree with the eligibility requirements or the result of the Independent Foreclosure Review?

The decision of the review is considered final and there is no further recourse within the Independent Foreclosure Review process. The Independent Foreclosure Review will not have an impact on any other options you may pursue related to the foreclosure process of your mortgage loan.

Q23. Does filing a Request for Review Form prevent me from filing other litigation or action against the servicer?

No. Submitting a request for an Independent Foreclosure Review will not preclude you from any other options you may pursue related to your foreclosure.

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Details on HUD Emergency Homeowners Loan Program

On October 5, 2010, HUD released details about the $1 Billion Emergency Homeowners Loan Program (EHLP) authorized by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

EHLP will offer declining balance, deferred payment “bridge loan” (non-recourse, subordinate loans with 0% interest rate) for up to $50,000 to assist eligible homeowners with payments of arrearages, including delinquent taxes and insurance plus up to 24 months of monthly payments on their mortgage principal, interest, mortgage insurance premiums, taxes, and hazard insurance.

Borrowers living in the following jurisdictions are eligible to receive funds through the EHLP:

TX	Texas	$ 135,418,959
NY	New York	$ 111,649,112
PA	Pennsylvania	$ 105,804,905
MA	Massachusetts	$  61,036,001
WA	Washington	$  56,272,599
MN	Minnesota	$  55,848,137
WI	Wisconsin	$   51,540,638
MO	Missouri	$   49,001,729
VA	Virginia	$   46,627,889
CO	Colorado	$   41,286,747
MD	Maryland	$   39,962,270
CT	Connecticut	$   32,946,864
KS	Kansas	$   17,748,782
AR	Arkansas	$   17,736,991
IA	Iowa	$   17,379,343
LA	Louisiana	$   16,691,558
UT	Utah	$   16,577,582
OK	Oklahoma	$   15,575,381
PR	Puerto Rico	$   14,714,668
ID	Idaho	$   13,284,075
NH	New Hampshire	$   12,655,243
NM	New Mexico	$   10,725,515
ME	Maine	$   10,379,657
WV	West Virginia	$     8,339,884
NE	Nebraska	$     8,304,512
HI	Hawaii	$     6,292,250
DE	Delaware	$     6,048,577
MT	Montana	$     5,710,580
VT	Vermont	$     4,830,215
AK	Alaska	$     3,890,898
WY	Wyoming	$     2,346,329
SD	South Dakota	$     2,051,563
ND	North Dakota	$     1,320,547
Total:		$ 1,000,000,000

Program Administration

Delegated Approach: Borrowers who are listed in one of the above 32 states or Puerto Rico will meet with non-profit housing counselors who are part of the National Foreclosure Mitigation Counseling Program administered by NeighborWorks® America to receive funding.

The non-profit housing counselors will provide intake and outreach services including:

• (i) developing and disseminating program marketing materials, (ii) providing an overview of the program and eligibility requirements, (iii) conducting initial eligibility screening (including verifying income), (iv) counseling  potential applicants, providing information concerning available employment and training resources,  (v) collecting and assembling homeowner documentation, (vi) submitting homeowner application, and (vii) providing transition counseling to explore with the homeowner other loss mitigation options, including loan modification, short sale, deed-in-lieu of foreclosure, or traditional sale of home.

• The counselors shall also be encouraged to conduct outreach to entities in local communities to provide information on assistance available to unemployed homeowners through this program and shall publicize the list of entities approved to assist potential applicants with applying to the program

State Law Approach: Borrowers or state HFAs that operate loan assistance programs that are determined by HUD to be substantially similar to the EHRF program will receive allocations to fund emergency loans for borrowers in the states below:

Alabama	$60,672,471
California	$476,257,070
Florida	$238,864,755
Georgia	$126,650,987
Illinois	$166,352,726
Indiana	$82,762,859
Kentucky	$55,588,050
Michigan	$128,461,559
Mississippi	$38,036,950
Nevada	$34,056,581
New Jersey	$112,200,638
North Carolina	$120,874,221
Ohio	$148,728,864
Oregon	$49,294,215
Rhode Island	$13,570,770
South Carolina	$58,772,347
Tennessee	$81,128,260
Washington, DC	$7,726,678

Allocation of Program Funds

Recipient Geography: HUD will assist borrowers living in Puerto Rico and the 32 states otherwise not funded by Treasury’s Innovation Fund for Hardest Hit Housing Markets (Hardest Hit Fund) program.

Allocation Amount: The total amount reserved will be based on the state’s approximate share of unemployed homeowners with a mortgage relative to all unemployed homeowners with a mortgage

Targeting Funds to Local Geographies: HUD will provide information that identifies pockets within each of the designated states that have suffered the most from recent spikes in unemployment and/or mortgage delinquencies.  HUD will encourage the use of program dollars in these hardest-hit areas.

Homeowner Eligibility and Program Operation

Income Thresholds: Has a total pre-event household income equal to, or less than, 120% of the Area Median Income (AMI), which includes wage, salary, and self-employed earnings and income.

Significant Income Reduction: Has a current gross income (income before taxes) that is at least 15% lower than the pre-event income.

• “Pre-event income”: the income prior to the onset of unemployment, underemployment, or medical emergency
• “Current income”: the income at the time of program application, as well as income during the period that the homeowner continues to receive assistance from the fund

Employment type: Both wage and salary workers and self-employed individuals are eligible.

Delinquency and Likelihood of Foreclosure: Must be at least 3 months delinquent on payments and have received notification of an intention to foreclose.  This requirement can be documented by any written communication from the mortgagee to the homeowner indicating at least 3 months of missed payments and the mortgagee’s intent to foreclose.  In addition, the homeowner can self-certify that there is a likelihood of initiation of foreclosure on the part of their mortgagee due to the homeowner being at least 3 months delinquent in their monthly payment.

Ability to Resume Repayment: Has a reasonable likelihood of being able to resume repayment of the first mortgage obligations within 2 years, and meet other housing expenses and debt obligations when the household regains full employment, as determined by:

• The homeowner must have a back-end or debt-to-income (DTI) ratio below 55%

Back-end DTI ratio:

Total Monthly Debt Expenses ÷ Total Gross Monthly Income

• Total monthly debt expenses = mortgage principal, interest, taxes, insurance, & revolving and fixed installment debt

***Note: For this calculation, gross income will be measured at the “pre-event” level***

Principal Residence: Must reside in the mortgaged property and be your  principal residence.  The mortgaged property must also be a single family residence (1 – 4 unit structure or condominium unit).

Creation of HUD Note:  After the first assistance payment is made on behalf of the homeowner, the fiscal agent will create an open-ended “HUD note” and a mortgage to be  in the name of the Secretary HUD of sufficient size to accommodate the expected amount of assistance to be provided to homeowner.

Ongoing Qualification of Homeowner

Termination of Monthly Assistance: Assistance is terminated and the homeowner resumes full responsibility for meeting the first lien mortgage payments in the event of any of the following circumstances:

• The maximum loan ($50,000) amount has been reached;
• The homeowner fails to report changes in unemployment status or income;
• The homeowner’s income regains 85% or more of its pre-event level;
• The homeowner no longer resides in, sells, or refinances the debt on the mortgaged property; or
• The homeowner defaults on their portion of the current first lien mortgage loan payments

Income re-evaluation: After initial income verification at application intake, the homeowner shall be required to notify the fiscal agent of any changes in the household income and/or employment status at any point throughout the entire period of assistance

Forms of Assistance

Use of Funds for Arrearages: On behalf of the homeowner, the fiscal agent shall use loan funds to pay 100% of arrears (mortgage principal, interest, mortgage insurance premiums, taxes, hazard insurance, and ground rent, if any)

Homeowner Payments: Homeowner contribution to monthly payment on first mortgage will be set at 31% of gross income at the time of application, but in no instance will it be less than $25 per month

Use of Funds for Continuing Mortgage Assistance: The fiscal agent will make monthly mortgage payments to the servicer of the first lien mortgage in excess of the payments made by the homeowner

Duration of Assistance: If at any time the household’s gross income increases to 85% or more of its pre-event level, assistance will be phased out by the fiscal agent over a 2 month period.  In any event, assistance with monthly payments may not continue beyond 24 months

Repayment Terms

Transition Counseling:   The designated counseling agent shall contact each homeowner that is approaching the last months of program eligibility and remains un/underemployed (3-6 months before the assistance ends) and require the homeowner  to meet with a HUD approved counseling agent to explore other loss mitigation options, including loan modification, short sales, deed-in-lieu of foreclosure, or traditional sale of home

Repayment of HUD Note: Following the last payment on behalf of the homeowner, the fiscal agent will process the homeowner’s “HUD Note” and record a mortgage with a specific loan balance.  The note and mortgage will be in the form of a 5 year declining balance, 0% interest, non-recourse loan, and the mortgage shall be in the form of a secured junior lien on the property

Terms for Declining Balance Feature:  No payment is due on the note during the 5 year term so long as the assisted household maintains the property as principal residence and remains current in his or her monthly payments on the first mortgage loan.  If the homeowner meets these two conditions, the balance due shall decline by 20% annually, until the note is extinguished and the junior loan is terminated

Events Triggering Note Repayment: The homeowner will be responsible for repayment of the applicable balance of the HUD note to the fiscal agent or its successor,  if, at any time during the 5 year repayment period, any of the following events occur:

• The homeowner no longer resides in the mortgaged property as a principal residence, but maintains ownership;
• The homeowner defaults on its portion of  the current mortgage; or
• The homeowner receives net proceeds from selling or refinancing debt on the home.

***Note: Net proceeds — after paying outstanding applicable brokers fees, first balances (and second lien balances, as applicable), and an allowance of $2,000 to the homeowner for relocation expenses when the home is sold — will go towards paying down the HUD note.  In the event that proceeds of a sale or loan refinance are not sufficient to repay the entire HUD note, the remaining applicable balance of the HUD note shall be considered to have been met, and the lien against the property shall be released***

Provisions for Underwater Homeowners: At all stages of the program, “underwater” homeowners will be encouraged to explore participation in short sale or short refinancing programs offered by their servicer and/or the federal government (i.e. Home Affordable Foreclosure Alternatives), which will not trigger repayment of the HUD note

• Underwater homeowners = homeowners with mortgage debt in excess of the market value of their home

Program Start Date

HUD intends for EHLP to begin taking applications by the end of 2010

$3 billion additional assistance for jobless homeowners

On August 11, 2010, the Obama Administration announced additional support to help homeowners struggling with unemployment through two targeted foreclosure-prevention programs.

Through the existing Housing Finance Agency (HFA) Innovation Fund for the Hardest Hit Housing Markets (HFA Hardest Hit Fund), the U.S. Department of the Treasury will make $2 billion of additional assistance available for HFA programs for homeowners struggling to make their mortgage payments due to unemployment. Additionally, the U.S. Department of Housing and Urban Development (HUD) will soon launch a complementary $1 billion Emergency Homeowners Loan Program to provide assistance – for up to 24 months – to homeowners who are at risk of foreclosure and have experienced a substantial reduction in income due to involuntary unemployment, underemployment, or a medical condition.

“HUD’s new Emergency Homeowner Loan Program will build on Treasury’s Hardest Hit initiative by targeting assistance to struggling unemployed homeowners in other hard hit areas to help them avoid preventable foreclosures,” said Bill Apgar, HUD Senior Advisor for Mortgage Finance. Together, these initiatives represent a combined $3 billion investment that will ultimately impact a broad group of struggling borrowers across the country and in doing so further contribute to the Administration’s efforts to stabilize housing markets and communities across the country.”

Hardest Hit Fund

President Obama first announced the HFA Hardest Hit Fund in February 2010 to allow states hit hard by the economic downturn flexibility in determining how to design and implement programs to meet the local challenges homeowners in their state are facing.

Under the additional assistance announced, states eligible to receive support have all experienced an unemployment rate at or above the national average over the past 12 months. Each state will use the funds for targeted unemployment programs that provide temporary assistance to eligible homeowners to help them pay their mortgage while they seek re-employment, additional employment or undertake job training.

States that have already benefited from previously announced assistance under the HFA Hardest Hit Fund may use these additional resources to support the unemployment programs previously approved by Treasury or they may opt to implement a new unemployment program. States that do not currently have HFA Hardest Hit Fund unemployment programs must submit proposals to Treasury by September 1, 2010 that, within established guidelines, meet the distinct needs of their state.

The states eligible to receive funds through this additional assistance, along with allocations based on their population sizes, are as follows:

Alabama	$60,672,471
California	$476,257,070
Florida	$238,864,755
Georgia	$126,650,987
Illinois	$166,352,726
Indiana	$82,762,859
Kentucky	$55,588,050
Michigan	$128,461,559
Mississippi	$38,036,950
Nevada	$34,056,581
New Jersey	$112,200,638
North Carolina	$120,874,221
Ohio	$148,728,864
Oregon	$49,294,215
Rhode Island	$13,570,770
South Carolina	$58,772,347
Tennessee	$81,128,260
Washington, DC	$7,726,678

HUD Emergency Homeowners Loan Program

This new program will complement Treasury’s HFA Hardest Hit Fund by providing assistance to homeowners in hard hit local areas that may not be included in the hardest hit target states. Those areas are still being determined.

The program will work through a variety of state and non-profit entities and will offer:

• a declining balance
• deferred payment “bridge loan” (0% interest, non-recourse, subordinate loan) for up to $50,000 on their mortgage principal, interest, mortgage insurance, taxes and hazard insurance for up to 24 months.

Under the program, eligible borrowers must:

• Be at least 3 months delinquent in their payments and have a reasonable likelihood of being able to resume repayment of their mortgage payments and related housing expenses within 2 years;
• Have a mortgage property that is the principal residence of the borrower, and eligible borrowers may not own a second home;
• Demonstrate a good payment record prior to the event that produced the reduction of income.

HUD will announce additional details, including the targeted communities and other program specifics when the program is officially launched in the coming weeks.

Fannie Mae Launches Distressed Borrower Education Site

 

Fannie Mae launches a borrower-facing outreach site designed to educate distressed homeowners on potential retention strategies and foreclosure alternatives.

The online education resource — available in both English and Spanish — offers calculators to demonstrate to borrowers the mechanics of refinance, repayment, forbearance, and modification options if the borrowers would like to keep their home. In addition, it covers information on Fannie’s Deed-For-Lease program, which allows borrowers to become renters in the same property after pursing deed-in-lieu of foreclosure.

For borrowers who would like to leave their home, the online education resource offers possible options such as, a short sale and deed-in-lieu of foreclosure when you can no longer stay in your home but want to avoid foreclosure.

For borrowers who aren’t sure what the best option is for them, the Options Finder can assist you. By answering some questions, the Options Finder determines which option may be right based on your current situation.

When you need additional assistance, the Resources section offers the following and much more:

Fannie Mae Resources

Review what Fannie Mae is doing to assist homeowners and how they can help you.

Contact your Mortgage Company

Find and contact your mortgage company to discuss your situation.

Helpful Forms

Download forms to help you prepare for (and keep track of) working with your mortgage company or a housing counselor.

Calculators

Use the calculators to determine which scenario fits your needs.

Frequently Asked Questions

Search for helpful answers to some of the most common questions regarding your options.

Take Action – What You Should Do Next

Once you ‘ve learned about options that may be available for your situation, it’s time to take action.

Step 1: Research

Be sure to bookmark the page and print the information on the option(s) that applies best to your situation. You will want to refer to this information when speaking with your mortgage company.

Step 2: Gather

Gather the information shown below. You’ll need this information handy so you can refer to it during your discussion with your mortgage company. Use the Financial Checklist to help get organized and prepared.

• Your mortgage(s): Loan number, past due notices, monthly statement, etc. for your first mortgage and second mortgage or other liens (if applicable).
• Your other debts: Copies of bills and monthly statements for all other debts such as credit cards, personal loans, auto loans, utilities, etc.
• Your income: Paystubs, unemployment benefits letter, alimony, child support, etc. for all borrowers on the mortgage.
• Your hardship: Explain your situation and any hardship that has affected your income or ability to make your payments, etc.

Step 3: Contact

Contact your mortgage company and ask them about the options that are available for your specific situation. Also ask for the name and/or employee number of the mortgage specialist who is helping you and be sure to give them your up-to-date contact information. Use the Contact Log to keep track of your conversations and follow-up items.

Step 4: Discuss

Make sure you are ready to discuss everything about your current situation—the more the mortgage company understands and the more accurate the information, the more they can help you find the right option.

Step 5: Confirm

Ask them to confirm your current situation to be certain there are no other issues. Make sure you understand the next steps involved and if there is anything you will need to complete for the specific option.

Home Affordable Unemployment Program (UP)

 

The Home Affordable Unemployment Program (UP) is a supplemental program to the Home Affordable Modification Program (HAMP) which provides assistance to unemployed borrowers. The Unemployment Program grants qualified unemployed borrowers a forbearance period which reduces or suspends their monthly mortgage payment.

***Note:  UP is for first lien mortgage loans that are not owned or guaranteed by Fannie Mae or Freddie Mac (Non Government-Sponsored Enterprises (GSE) Mortgages) or insured or guaranteed by a federal agency, such as the Federal Housing Administration (FHA).***

The program is effective for participating HAMP servicers on July 1, 2010; however, servicers may begin to offer UP earlier.

Eligibility

Servicers are required to offer UP when the following criteria is met:

• Loan is a first lien mortgage, originated on or before January 1, 2009, secured by a one- to four unit property, 1-unit of which is the borrower’s principal residence and the unpaid principal balance (UPB) is equal to or less than $729,750 on 1-unit properties (See Supplemental Directive 09-01 for amounts on 2 – 4 unit dwellings)
• Loan has not been previously modified under HAMP and the borrower has not previously received a UP forbearance period
• Borrower is unemployed at the date of the request for UP and is able to document that they will receive unemployment benefits or have been receiving unemployment benefits at commencement of the forbearance plan
• Servicers have the discretion whether or not to require a borrower to have received unemployment benefits for up to 3 months before commencement of the forbearance plan
• Borrower is either delinquent but has not missed more than 3 consecutive monthly payments or default is reasonably foreseeable

It is at the servicer’s discretion whether to offer UP if a borrower’s total monthly mortgage payment is less than 31% of the borrower’s monthly gross income.

Additional UP forbearance plan eligibility requirements include that the borrower:

• Makes a request before the first mortgage lien is seriously delinquent (before 3 monthly payments are due and unpaid). A request for UP may be made by phone, mail or email. Within 10 business days, servicers must confirm the receipt of the request with the borrower via mail or return email.
• Is unemployed at the date of the request for UP and is able to document that he or she will receive unemployment benefits in the month of the Forbearance Period Effective Date even if his or her unemployment benefit eligibility is scheduled to expire before the end of the UP forbearance period.

Terms

The UP forbearance period is 3 months or upon notification that the borrower has become re-employed; however, it can be extended in accordance with investor and regulatory guidelines.

The monthly payment MUST be reduced to 31% (or less) of the borrower’s gross monthly income. At the discretion of the servicer, monthly mortgage payments may be suspended in full.

Payment amount and due date, if any, is established by the servicer according to investor and regulatory guidelines.

Servicers are prohibited from:

• Initiating foreclosure action or conducting a foreclosure sale while the borrower is being evaluated for UP
• After the Foreclosure Plan Notice (FPN) is mailed
• During the UP forbearance or extension while the borrower is being evaluated for or participating in HAMP or HAFA following, the UP forbearance period

A borrower in a permanent HAMP modification that becomes unemployed is not eligible for an UP forbearance plan.

A borrower who was previously determined to be ineligible for a HAMP modification may request consideration for an UP forbearance plan if the borrower meets all of the eligibility requirements.

If the servicer is requiring a reduced monthly payment, the borrower’s reduced payment MUST be received by the servicer on or before the last day of the month in which it is due.

If the borrower fails to make timely payments, the UP forbearance plan may be canceled and the borrower is not eligible for HAMP consideration.

Reporting Requirements

To Credit Bureaus:

The servicer should continue to report a “full-file” credit report to each major credit repository.

Bank of America NHRP Enhancements FAQs

 

Am I eligible for the National Homeownership Retention Program (NHRP)?

First, Bank of America (BOA) Home Loans will need to determine your financial situation and hardship. Once BOA has your current financial information, BOA will evaluate the your loan for all possible home retention options so that you can determine which option might be right for you.

You may be eligible for the enhancements to the NHRP if you meet the following program requirements:

• Have a Countrywide subprime mortgage, a Pay-Option adjustable rate mortgage (ARM) or a prime two-year hybrid ARM
• Originated your loan on or prior to January 1, 2009
• Are 60 days or more delinquent or in imminent danger of default and the current loan-to-value (LTV) ratio is 75% or higher (The LTV ratio is the ratio between the unpaid principal amount of your loan and the appraised value of the homeowner’s home)
• Have a subprime hybrid ARM and are current but believe you will not be able to afford your mortgage payment in the near future as a consequence of a rate reset, and the LTV ratio at the time of the modification is 75% or higher
• Have a Pay Option ARM and are current but believe you will not be able to afford your mortgage payment in the near future as a consequence of a rate reset or payment recast, and the LTV ratio at the time of the modification is 75% or higher
• Have a property that is a 1-to-4 unit owner-occupied residential property
• For the earned forgiveness program, be 60 days or more delinquent and the current LTV ratio is 120% or higher
• For the negative amortization principal reduction program, be 60 days or more delinquent or be current but reasonably likely to become 60 days or more delinquent (i.e. facing imminent default) and the current LTV ratio is above 95%.

***Note: You may go online and fill out the Financial Worksheet to update BOA on your current financial situation. BOA will compare this information to all available home loan assistance programs***

Exactly what will BOA offer to eligible borrowers?

BOA Home Loans offers a range of modification solutions for customers facing financial hardship. The NHRP is one of the programs that BOA offer for customers with subprime loans, Pay-Option ARM loans or prime two-year hybrid loans who meet program requirements. Other programs, such as the Home Affordable Modification program (HAMP), are also available and designed to provide more affordable mortgage payments to customers facing financial hardship. Modifications will provide more affordable payments using a combination of the following:

• Reducing interest rate
• Providing a term extension
• Providing principal forgiveness or principal forbearance

Once the enhancements are launched, BOA Home Loans will both mail and call all eligible customers to collect the necessary information and determine if they qualify for the NHRP.

How do I know if I have a Subprime loan, Pay-Option adjustable rate mortgage (ARM) loan, or a two-year hybrid ARM?

If you are not sure what type of loan you have with BOA Home Loans, please call them at 800.669.6607 and they can provide you with that information.

***Note: Prior to calling, please print out the Call Information Sheet and take note of your account number and any questions you may have. You’ll be given a lot of information during your conversations. It’s a good idea to take notes for future reference***

How do I find out if I am eligible?

Click here to determine if you are eligible through the online questionnaire

How do I apply?

Please call BOA Home Loans Customer Service at 800.669.6607.

BOA Home Loans will also be contacting eligible customers to see if they are interested in applying for the program.

When will the program start or go into effect?

The program launched in 2008, and was enhanced in mid-May.

How will the NHRP use principal forgiveness to make my mortgage payment more affordable?

The NHRP looks at each customer’s situation and determines how they can provide you with an affordable mortgage payment. Depending on your situation, the NHRP may use principal forgiveness to do this. The NHRP may offer principal forbearance with an opportunity to earn principal forgiveness.

Principal forbearance provides temporary relief during a time of hardship. This means after demonstrating a hardship, BOA Home Loans will defer or postpone your mortgage payment for a period of time. For purposes of NHRP and the HAMP, BOA Home Loans offers interest-free forbearance to qualifying borrowers for the life of the loan. At the end of the loan term or at the time the loan is paid off through sale or refinancing, any remaining forborne amount must be paid by the borrower.

You may also qualify for earned principal forgiveness where a portion of the debt or loan amount is waived and you are no longer responsible to pay back that amount. However, you must remain in good standing on your payments or you will not receive forgiveness. The principal forgiveness occurs over 5 years. The amount of principal forgiveness that you can earn remains the same for the first 3 years. In the 4th and 5th years, the amount of forgiveness may be less, if an increase in the property value since the modification was made would result in your principal balance dropping below the current value of the property.

***Note: There may be tax implications. You may want to consult a tax professional regarding your individual tax situation***

I wanted principal forgiveness when I was reviewed for a modification and I didn’t get it. How do I get it now?

All BOA Home Loans modification solutions are designed to bring a loan payment to an affordable and reasonable amount that borrowers are able to sustain over time. If you have completed a loan modification or are currently in a trial period for a modification, your loan likely received a rate forgiveness and/or term extension in order to achieve an affordable and reasonable payment. Principal forgiveness is another tool to achieve this same result. In addition, under the federal government’s HAMP, you can only qualify for one modification, so if you are in a trial period plan or a permanent modification, you would not qualify for another modification.

However, BOA will consider the application of the principal reduction enhancements to potentially eligible trial and permanent modifications, and will notify eligible borrowers accordingly.

I am in my Trial Period and have not received my final modification yet. How do I get a principal forgiveness too?

If you are currently in a trial modification, a solution to bring your mortgage to an affordable and reasonable payment has been achieved and no additional tools (including principal forgiveness) would be necessary. BOA encourages you to continue making timely payments and to return all required, completed documents to ensure your trial will convert to a permanent modification, as you cannot be considered for another HAMP modification if you do not fulfill your trial modification requirements.

Two months ago this would have helped me but now my house is on the market for a short sale. How do I get a principal forgiveness and a modification now?

Even though you have started the short sale process, you can still be evaluated for a loan modification unless you have already been in a modification trial period or have received a permanent modification. If your financial situation has changed, BOA can collect your new financial information and reevaluate your loan for this program and other foreclosure prevention options. Please call BOA at 800.669.6607 to learn how to provide this new information.

This is something I asked for months ago, and now I am in foreclosure. What are you going to do for me now?

If your financial situation has changed since your loan was last evaluated for a modification, BOA can collect your new financial information and reevaluate the loan for this and other foreclosure prevention options.

What happens if I can’t qualify for a modification or a principal forgiveness?

Your loan will be considered for all modification programs available to you to help you achieve an affordable monthly mortgage payment. If you are not eligible for a loan modification, BOA can discuss other options.

What do I do if my state is not mentioned or included in this agreement?

Your state does not have to participate in the program for you to be eligible or considered for a modification. If you are a BOA Home Loans customer, BOA can discuss your situation and see if you qualify for NHRP or other modification options to assist you. Please call BOA Home Loans Customer Service at 800.669.6607.

I have a rental/vacation/investment property. Does that qualify?

No. This program is only for owner-occupied properties.

I have a Home Equity Line of Credit (HELOC) or second mortgage. Does the NHRP apply to that loan?

No, the NHRP does not cover HELOCs or second mortgages. If you have a HELOC or second mortgage with BOA Home Loans, BOA will review it when they review your first mortgage. If your HELOC or second mortgage is with another lender, you will need to discuss your options with that lender.

If your first lien is held by an investor other than BOA or one of its subsidiaries and you have a second lien on the property, BOA is unable to consider your first lien for modification under the new programs, but they will review your eligibility for another solution using HAMP or their proprietary modification programs.

Do I have to pay a fee to participate, or are there closing costs related to this program?

There are no fees assessed for participating in any modification program with BOA Home Loans.

What if I’m already in the foreclosure process?

You may still be reviewed for a modification. If you are eligible for one of BOA’s programs, your foreclosure sale may be placed on hold while BOA works to qualify you for the program and work through the modification process.  Please call BOA at 800.669.6607.

What if I’m current on my loan, but would like to be considered for this program?

Customers current on their loans may qualify for this program if they can demonstrate in good faith that they are reasonably likely to become 60 days or more delinquent as a result of a rate reset on a subprime loan or a Pay-Option ARM loan or prime two-year hybrid ARM, or a payment recast based on negative amortization on a Pay-Option ARM loan, and their LTV ratio is 75% or higher. You will be asked to provide financial documentation demonstrating financial hardship to qualify for the program. With respect to the recently announced principal reduction enhancements to the program, the negative amortization write-down solution is being offered to certain Pay Option ARM borrowers who are current on their payments but facing imminent default.

I’m current on my mortgage, but I owe more than my home is worth. Can I qualify for principal forgiveness?

If you are current on your loan, BOA will first evaluate you for the Home Affordable Refinance Program (HARP), which BOA is required to do under the government guidelines. If you do not qualify for a refinance, BOA will then evaluate your loan for the HAMP under Imminent Default if you have a financial hardship and will not be able to afford your current mortgage payment in the immediate future.

How long will BOA Home Loans offer this program?

BOA has expanded the program until December 31, 2012, six months longer than the original program date.

Bank of America Begins Implementation of NHRP Enhancements

 

 

Bank of America (BOA) has begun implementing the National Homeownership Retention Program (NHRP) enhancements, announced in late March 2010, to modify the mortgages of qualified homeowners who are experiencing financial hardship.

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What is the National Homeownership Retention Program (NHRP)?

NHRP, launched in October 2008, is a loan modification program that emerged from an agreement with several state attorneys general to provide assistance to former Countrywide borrowers with Sub-prime and Pay-Option adjustable rate mortgage (ARM) loans.

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BOA found that many homeowners who owe considerably more than their home is worth are reluctant to accept a solution that does not address a reduction in the principal balance due. In BOA’s outreach to date, about 30% of underwater and delinquent customers who had not responded to offers of modifications without a principal reduction component did respond when offered a significant reduction in principal.

Expanding NHRP will enable BOA to more effectively help customers, especially those who are severely underwater. Enhancements to the mortgage modification program include:

• Earned Principal Forgiveness – A first look at principal forgiveness coupled with an innovative solution to help delinquent borrowers who owe more than 120% of their property’s current market value.
• Principal Reduction for Negative-Amortization Loans – Also a first look in the HAMP sequence of solutions for certain qualifying loans. On delinquent and imminent default Pay-Option ARM loans with negative amortization, Bank of America will lower the principal balance to the extent of the negative amortization incurred to as low as 95% loan-to-value (LTV).
• Program Expansions – Now covers prime two-year hybrid ARM loans and the entire program will be extended 6 months through the end of 2012. In addition, qualifying mortgages eligible for NHRP will be expanded to include those originated on or before Jan. 1, 2009. Eligible relocation payments will have a floor of $2,000 per loan, and this benefit will be extended to tenants as well as borrowers.

Earned Principal Forgiveness

For NHRP-qualifying mortgages with current loan-to-value (LTV) ratios of 120% or higher, BOA will take a first look at offering an interest-free forbearance of principal that the homeowner can turn into forgiven principal annually over 5 years, provided the homeowner remains in good standing on payments.

This “earned principal forgiveness” can result up to a maximum 30% decrease in the principal balance, with forgiveness of principal in installments over 5 years to as low as 100% LTV.

If the forbearance is not enough to meet the HAMP payment target of 31% of the homeowner’s income, an interest rate reduction and other steps in the standard sequence of solutions will be employed.

For each of the first 5 years that the homeowner’s payment record remains in good standing, the borrower may earn forgiveness of up to one-fifth of the forborne principal amount. The amount is set at 20% in the first 3 years. In the 4th and 5th years, the amount of forgiveness will take into account any increase in the property value over the period of the modification such that the then-current LTV will not be reduced to below 100% through principal forgiveness – helping strike a critical balance between customer and investor interests.

Principal Reduction for Negative-Amortization Loans

BOA has begun offering two other affordable and sustainable payment solutions on certain Pay-Option ARMs.

• If the principal balance on the loan has grown because the borrower selected an option to make payments that did not cover the interest due and this payment difference was added to principal – known as negative amortization – the bank will consider offering a HAMP modification eliminating the negative amortization feature and forgiving all or part of the negative amortization amount to reduce the principal to as low as 95% LTV.
• If a pending recast of a Pay-Option ARM will increase the customer’s monthly payments, a preemptive modification that eliminates the negative amortization feature of the mortgage and converts it to a fully amortizing market rate loan may be offered.

With implementation of these enhancements, BOA will make principal reduction the initial consideration toward reaching the HAMP’s target for an affordable payment equal to 31% of household income when modifying qualifying Sub-prime, Pay-Option ARM and Prime 2-year hybrid ARM loans that are also eligible for NHRP. An interest rate reduction and other steps would then be considered, if additional savings are necessary to reach the targeted payment.