Effective Mortgage Company & Counselor Effective Mortgage Company & Counselor Partnerships - Partnerships -

October 2009

AGENDA

•Welcome & Introduction

•Important Role of Housing Counselors

•Role of Mortgage Companies / Mortgage Servicers

•Home Retention Solutions & Tools

•Working with Mortgage Company’s Retention Team

•Appendices

Role of Counselors:Role of Counselors:

Helping Homeowners Make Informed Decisions

Role of the Housing Counselors

STEP 1: Obtain third party authorization to act on homeowner(s) behalf and work with the Obtain third party authorization to act on homeowner(s) behalf and work with the mortgage company.mortgage company.

STEP 2: Define the homeowners’ hardship and the reasons for delinquency or imminent Define the homeowners’ hardship and the reasons for delinquency or imminent default.default.

• If homeowner is unemployed provide information to them about resources. See Appendix.

STEP 3: Develop Crisis Budget and Determine Accurate Financial PictureDevelop Crisis Budget and Determine Accurate Financial Picture• Identify all household income for all wage earners in the household. (Gross and Net

Income) • Identify all expenses. (Monthly living expenses and secured/unsecured debts)• Gather information/documentation to verify ability to pay.

STEP 4: Work with the homeowner(s) to gather all required documents and get Work with the homeowner(s) to gather all required documents and get modification documents signed and returned to mortgage company.modification documents signed and returned to mortgage company.

STEP 5: Explain Process and Roles (i.e.) mortgage company, investor, etc. Provide Explain Process and Roles (i.e.) mortgage company, investor, etc. Provide information about resources. (Websites, etc.) information about resources. (Websites, etc.)

Role of Mortgage Role of Mortgage Companies:Companies:

Helping Homeowners/Counselors Determine Next Steps &

Short/Long Term Solutions

Role of Mortgage Company

Definition of Mortgage Servicing•Administering a mortgage loan, including recordkeeping, payment collection, releasing liens, making certain insurance and taxes are paid, and initiating collections on past due payments and including foreclosure proceedings for loans that are in default.

•Lenders after originating a mortgage loan can retain the servicing or release to another mortgage company/servicer to handle the servicing process.

•Servicers sign contracts with investors called pooling and servicing agreements (PSAs) that provide specific rules that a servicer must follow with regard to collection and foreclosure activity.

•It’s important to understand that mortgage companies/servicers must adhere to guidelines provided by the investor and insurer (as applicable) specific to loss mitigation remedies. Each investor and/or insurer provides detailed guidelines.

•Mortgage companies service loans for investors such as Fannie Mae, Freddie Mac, and Ginnie Mae, as well as government agencies such as the Federal Housing Agency (“FHA”) / U.S. Department of Housing and Urban Development (“HUD”) and the Veterans Administration (“VA”).

•Some banks and/or lending institutions retain loans in its portfolio and is the investor of those loans. Lastly, mortgage companies will service loans for numerous private investors held in mortgage backed securities (MBS pools).

Loss Mitigation Solutions

Foreclosure (Timelines Vary Among States)

Deed In LieuIf home cannot be sold in 90 days, convey collateral to investor to reduce foreclosure time.

Short SaleIf equity is insufficient to pay total debt, sell at the market value and present offer to investor

and mortgage insurer. Negotiate settlement for balance or forgiveness of debt.

Sell the HomeIf no reinstatement, validate income and complete extension or modification. If no income or not enough income, encourage customer to sell at market value.

Forbearance w/Modification or Loan ReinstatementHomeowner(s) remits no payment or payment at reduced amount for up to 90 days or greater pending investor approval. Homeowner(s) should seek Debt Counseling to reduce expenses to qualify and if

unemployed partner with a local One-Stop Career Center. Customer then reinstates loan in full.

Loan ModificationAny loan modification to the original terms of the contract, including interest rate reduction, step

rate interest changes, term extension, capitalization of past due amount, and/or a principle forbearance. Typically, should not exceed 1 modification in 12 months or 2 in 5 years.

Repayment PlanResults in a homeowner(s) ability to repay past due amount.

Working with Mortgage Working with Mortgage Companies:Companies:

Housing Counselors & Housing Counselors & HomeownersHomeowners

Working with Mortgage Companies

Counselors•Dedicated toll-free lines, fax lines and escalation contacts at mortgage companies that are members of the HOPE NOW Alliance.

•Creation of dedicated email boxes for HUD approved counselors and non-profit attorney networks.

•Specialized teams within loss mitigation/home retention teams created to work with HUD approved counselors, state programs resources, and to support foreclosure prevention events.

•Loss Mitigation websites and on-line submissions.

•Dedicated toll-free telephone lines, faxes, and emails created to support new programs.

•Specialized loss mitigation websites. HOPE NOW Website (Borrower Assistance In-take Form).

•Special teams created for homeowners working with a counselor or who attend a foreclosure prevention event.

•Foreclosure prevention events (See appendix.)

Homeowners

APPENDICESAPPENDICES

Directing Homeowners to their Mortgage Company

1. Go to www.hopenow.com

2. On Home Page there is as drop down box with links to member servicers loss mitigation sites.

3. Click on the respective mortgage company.

OPTION 1: Mortgage Companies Loss Mitigation Websites

Directing Homeowners to their Mortgage Companies

1. Go to www.hopenow.com

2. On Home Page in the section called “Contact Your Mortgage Company”, click on “Call for Assistance”.

3. A complete list of member mortgage companies names, toll free loss mitigation phone numbers and websites are listed.

OPTION 2: Mortgage Companies Toll-Free Number to Loss Mitigation

Government Resources – Websites and Key Links

Key Websites•www.makinghomeaffordable.gov – Information about President Obama’s Making Home Affordable Modification Program

•www.hopenow.com has section on its site that links homeowners to key sites. See below.

Assisting Unemployed Homeowners

PLEASE ADVISE THE FOLLOWING:

If a homeowner is unemployed, please visit www.hopenow.com for more information about unemployment resources (Click on Resources for the Unemployed under the Homeowner Resources Section). The U.S. Department of Labor has developed a Worker Reemployment Portal at www.careeronestop.org/ReEmployment to help individuals find information about how to apply for unemployment compensation and search for jobs. The site also provides information about the employment and training services available to unemployed workers at the 3,000 One Stop Career Centers nationwide and information on their location by zip code. This information is also available through a toll free help line at 1-877-US2-JOBS. If a homeownerdoes not have access to a computer, they may visit their local library for assistance.

Assisting Homeowners Who Allegedly Been Scammed

You can refer them to the www.hopenow.com

The HOPE NOW website and the FTC’s website has helpful information about resources.

Assisting Multi-Lingual Homeowners

You can refer them to the www.hopenow.comThe HOPE NOW website has a Google Translator Tool that translates all information on the site. The site provides helpful information about loss mitigation, housing counseling and other resources.

There is even help for Homeowners with Pets…..

You can refer them to the www.hopenow.comOften non-profit organizations such as Best Friends, SPCAs, Humane Societies may provide assistance. There is anOrganization called No Paws Left Behind that helps Homeowners with Pets.

Foreclosure Prevention EventsForeclosure Prevention Events

Learning More About HOPE NOW Sponsored Events

1. Click on www.hope.now.com

2. Go to “Events in Your Area.”

3. Click on 2009 HOPE NOW Events”

Learning More About HOPE NOW Sponsored Events

1. Provides homeowners a document checklist.

2. Gives detailed directions.

3. Homeowners can print off the event flyer with information about the date/time.

Learning More Events in Your Area

1. Click on www.hope.now.com

2. Go to “Events in Your Area.

3. Click on “Other Events in Your Area”

Learning More About HOPE NOW Sponsored Events

1. Freddie Mac tracks all foreclosure prevention events in the U.S.

2. Information is provided by state.

3. Flyers, date and time information is shared as available.