How the Money Will be Distributed in the National Mortgage Settlement

September 2, 2012

In February 2012, 49 state attorneys general (except Oklahoma) and the Federal Government announced the largest consumer financial protection settlement in U.S. history with the country’s five largest loan servicers, known as the National Mortgage Settlement:

The five servicers will provide at least $25 billion in consumer relief to distressed borrowers and directs payments to states and the Federal Government.

The agreement settles state and Federal investigations finding that the country’s five largest loan servicers routinely signed foreclosure related documents outside the presence of a notary public and without really knowing whether the facts they contained were correct.  Both of these practices violate the law.  The settlement provides benefits to borrowers whose loans are owned by the settling banks as well as to many of the borrowers whose loans they service.*

*Borrowers from Oklahoma will not be eligible for any of the relief directly to homeowners because Oklahoma elected not to join the settlement.

As stated in the Settlement Fact Sheet, the money in the settlement will be distributed in several ways:

FINANCIAL RELIEF FOR HOMEOWNERS:

The servicers will be required to dedicate $20 billion to various forms of relief to borrowers.

  • Principal reduction. At least $10 billion will be dedicated to reducing principal for borrowers who, as of the date of the settlement, owe more on their mortgages than their homes are worth and are either delinquent or at imminent risk of default.
  • Refinancing. At least $3 billion will be dedicated to a refinancing program for borrowers who are current on their mortgages but who owe more on their mortgages than their homes are worth. All borrowers who meet basic eligibility criteria will be eligible for the refinancing, which will reduce interest rates for borrowers who are currently paying much higher rates or whose adjustable rate mortgages are due to soon rise to much higher rates.
  • Other forms of relief. Servicers will be required to dedicate up to $7 billion to other forms of relief, including forbearance of principal for unemployed borrowers, anti-blight programs, short sales and transitional assistance, benefits for service members who are forced to sell their homes at a loss as a result of a Permanent Change in Station, and other programs.

To encourage servicers to provide relief quickly, there are incentives for relief provided within the first 12 months – and additional cash payments required for any servicer that fails to meet its obligation within three years. Servicers will receive only partial credit for every dollar spent on some of the required activities, so the settlement will provide direct benefits to borrowers in excess of $20 billion.

PAYMENTS TO STATE AND FEDERAL GOVERNMENTS:

In addition to the $20 billion of financial relief for homeowners, the servicers will make $5 billion in cash payments to the states and the Federal Government. Of the $5 billion:

  • Payments to Foreclosed Borrowers. Through the settlement, a $1.5 billion Borrower Payment Fund will be established to provide cash payments to borrowers whose homes were sold or taken in foreclosure between and including Jan. 1, 2008 and Dec. 31, 2011, and who meet other criteria. This program is distinct from, but complimentary to, the restitution program currently being administered by Federal banking regulators to compensate those who suffered direct financial harm as a result of wrongful servicer conduct.
  • State and Federal payments. The remaining funds of $3.5 billion will go to state and Federal Governments to be used to repay public funds lost as a result of servicer misconduct, fund housing counselors, legal aid, and other similar purposes determined by state attorneys general. The funds coming to the Federal Government will primarily be allocated to the FHA Capital Reserve Account, with portions also going to the Veterans Housing Benefit Program Fund and to the Rural Housing Service.

FINANCIAL OBLIGATIONS OF INDIVIDUAL SERVICERS:


Independent Foreclosure Review FAQs

November 16, 2011

 

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.


Independent Reviews of Foreclosure Cases Begin

November 16, 2011

Independent third-party reviews of foreclosure cases at the 14 largest mortgage servicers and their affiliates began Tuesday, November 1st, 2011.

Consultants hired by the banks and approved by the Office of the Comptroller of the Currency (OCC) will evaluate whether eligible borrowers who were foreclosed between January 1, 2009 and December 31, 2010 suffered financially due to improper practices.

Borrowers are considered eligible if their loan meets the following initial eligibility criteria:

  • Your mortgage loan was serviced by one of the participating mortgage servicers below.
  • 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.

Eligible customers will be mailed a letter by December 31, 2011 that explains the Independent Foreclosure Review process and a Request for Review Form that identifies some examples of situations that may have led to financial injury. The borrower has until April 30, 2012 to request a review. There is no cost to the borrower, and the OCC warned against any firm that would charge a fee up front for the review.

If eligible borrowers believe that they were financially injured as a result of servicer errors, misrepresentations or other deficiencies in the foreclosure process on their primary residence, they can request a review of their foreclosure file to verify that their foreclosure process was handled properly.

Throughout this process, servicers will continue their efforts to help homeowners who have not yet gone through a foreclosure sale stay in their homes, where possible.

The reviews are a requirement under consent orders signed between regulators and the servicers. The reviews could cover more than 4.5 million cases and take more than a year to complete.

The participating servicers are:

  • America’s Servicing Company
  • Aurora Loan Services
  • Bank of America
  • EMC
  • EverBank/Everhome Mortgage Company
  • First Horizon
  • National City Mortgage
  • PNC Mortgage
  • Sovereign Bank
  • Beneficial
  • Chase
  • GMAC Mortgage
  • HFC
  • SunTrust Mortgage
  • U.S. Bank
  • Citibank
  • CitiFinancial
  • HSBC
  • IndyMac Mortgage
  • Wachovia
  • Washington Mutual
  • CitiMortgage Services Wells Fargo
  • Countrywide MetLife Bank

If your loan is part of the initial eligible population and you need a new form by mail, believe you may be eligible for a review but did not receive a mailing, 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. EST or Saturday, 8 a.m.–5 p.m. EST.


Details on HUD Emergency Homeowners Loan Program

October 14, 2010


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:

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


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