masters of underwriting smoothing out the home saver underwriting process
Post on 19-Jan-2016
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Masters of UnderwritingSmoothing out the Home Saver Underwriting Process
Mississippi Annual Affordable Housing ConferenceHome Saver Program GuidelinesCompliance Pipeline ManagementSite Visits/Audits
Here We Come to Save the Day..
Summary of HHF Policy Guidelines Home Saver Program Goal UnemployedUnderemployedReinstatement OnlyMortgage Assistance with Education OptionMaximum AssistanceTerms of Assistance
UnemployedTo bridge eligible applicants across a period of unemployment and allow them to stay current on their mortgage.
UNDEREMPLOYEDTo bridge eligible applicants across a period of underemployment and allow them to stay current on their mortgage.
REINSTATEMENT ONLYTo bring eligible applicants current after a brief interruption or reduction in income.
MORTGAGE ASSISTANCE WITH EDUCATION OPTIONApplicants are eligible for an additional twelve (12) months of assistanceIf an applicant enters an educational program that leads to a certification or degree from Regionally Accredited College, University or online degree programsIf the applicant lives in a distressed county, an additional six (6) months will be added (not to exceed the maximum assistance.
MAXIMUM ASSISTANCEApplicants are eligible for up to $50,000.00 of arrearage assistance which must include a minimum of twelve (12) months of mortgage payments. A cap of $50,000.00 is the maximum amount permitted for the mortgage assistance regardless if the education option is included or not.
TERMS OF ASSISTANCENon recourse 0% interest, non-amortizing, forgivable loan secured by a subordinate lien on the subject property. Forgiven over a five (5) year period at a rate of 20% per year.If the property is sold or refinanced prior to the loan termination date, funds will be recovered should sufficient equity be available from the transaction.
ELIGIBLE APPLICANTSUNEMPLOYED: One or more applicants must be receiving unemployment, be eligible to receive or must have exhausted unemployment compensation benefits.UNDEREMPLOYED: Applicant that can show a reduction in income by 15% or more since the hardship event.REINSTATEMENT ONLY: Applicants who have fallen behind but are now re-employed and can now sustain the mortgage.
ELIGIBLE APPLICANTSREINSTATEMENT ONLY:Applicants must show that they experienced a hardship with either a 15% reduction in income or a job loss. If the hardship was a job loss the applicant must have been eligible for unemployment benefits. Mortgage debt to income ratio must be 35% or below. Applicants that are eligible for the option may not participate in any other options.
ELIGIBLE APPLICANTSMilitary Deployment Members of the U.S. Armed Forces who have experienced ANY drop in income due to deployment will now be eligible for the Home Saver Program.This applies to all personnel in regular and reserve components of the Army, Navy, Air Force, Marines & Coast Guard.
INELIGIBLE APPLICANTSActive Bankruptcy.Disabled & permanently unable for full-time employment.Loss of employment or reduction in income due to medical reasons.Part-time employment (unless eligible for unemployment)
INELIGIBLE APPLICANTSTemporary/Seasonal employment.Permanent/intermittent work is seasonal and does not apply (ex: farm workers)Contract work is not considered permanent work and does not apply.Death of spouse, catastrophic medical expenses and/or divorce.
INELIGIBLE APPLICANTSSelf-inflicted financial hardship Poor debt managementStripping the equity from their home for non-essential purposeMismanagement of their personal budget. Home has already been foreclosed on.Already received home saver assistance. An applicant can only apply for HHF assistance one time.
INELIGIBLE APPLICANTSTeachers or other employees cannot claim a hardship due to a decrease in income from a nine-month pay cycle.Rental income will be regarded as investment income and cannot be used to calculate a hardship based on loss of income.
ELIGIBLE EXISTING MORTGAGESFixed rateFixed termBalloon termARMFully amortizingUnpaid principal loan balance cannot exceed $271,000.00Home equity line of credit closed to future advances
INELIGIBLE EXISTING MORTGAGESSecond Mortgage LoansChattel Mortgages without Deed of TrustInterest Only LoansNegative Amortizing LoanOpen End Mortgage/Future Advance ClauseLoan Held by non-participating servicer
INELIGIBLE EXISTING MORTGAGESSeller FinancedContract for DeedLease with Option to PurchaseHome Equity Line of Credit Open to future advancesConstruction to Perm Loan not modified to permanent financingSecond Homes or Investment Properties
PROPERTY TYPESSingle Family (attached or detached)Condominium Unit1 5 unit properties where the applicant is living in one of the units
PROPERTY TYPESManufactured Home on a foundation permanently affixed or real estate owned by the borrower. Title to manufactured home must be surrendered and the manufactured home must be taxed as real property (must supply documentation to support mobile home is taxed as real property) Must have a Deed of Trust
MINIMUM ELIGIBILITY CRITERIAApplicant must have a monthly mortgage payment that they cannot afford due to unemployment or at least a 15% reduction in income.The unpaid principal balance of first mortgage cannot exceed $271,000.00.Job loss had to occur on or after January 1, 2008.
MINIMUM ELIGIBILITY CRITERIAMortgage must have been made prior to the hardship event.Unemployed applicants must be eligible to receive, currently receiving or have exhausted unemployment benefits.Self employed applicants must be able to document a 15% reduction in income with minimum two (2) years tax returns.
MINIMUM ELIGIBILITY CRITERIASelf employed applicants must have been self employed for a minimum of two (2) years.All documentation must be current and within 60 days of approval.Servicer must be a participating servicer or be willing to sign up as a new participating servicer.
MINIMUM ELIGIBILITY CRITERIAApplicant must be a resident of the State of Mississippi.Applicant must owner occupy the home as their primary residence.The applicant with the hardship must be on at least one of the following: 1) Note 2) Deed of Trust 3) Warranty Deed 4) Quit Claim Deed
REQUIRED DOCUMENTATION: UNEMPLOYEDCopy of most recent Utility BillCopy of DL or Photo ID (all parties involved)Copy of SS Card (all parties involved)Copy of Unemployment Benefit Letter, (applicant may supply) However, underwriter will pull from the MDES website on each file.
REQUIRED DOCUMENTATION FOR UNEMPLOYEDCopy of most recent Mortgage Statement (if the name of the applicant is not on the mortgage statement, you must provide one of the following additional mortgage documents which does include the applicants signature) 1) Note 2) Deed of Trust 3) Warranty Deed 4) Quit Claim Deed
REQUIRED DOCUMENTATION: UNDEREMPLOYED & REINSTATEMENT ONLYCurrent Mortgage Loan StatementCopy of Original Signed NoteCopy of Original Signed Deed of TrustMost Recent Pay Stubs (if employed)Most Recent Two (2) Years W2s or 1099sMost Recent Two (2) Years Federal Tax Returns
REQUIRED DOCUMENTATION: UNDEREMPLOYED & REINSTATEMENT ONLYSelf Employed Two (2) years most recent Business and Personal Federal Tax Returns (all schedules)Self Employed YTD Profit & Loss Statement (signed by preparer)Self Employed Most recent Two (2) months Business and Personal Bank Statements
REQUIRED DOCUMENTATION: UNDEREMPLOYED & REINSTATEMENT ONLYCurrent SSI Awards Letter (if applicable)Copy of DL or Photo ID (all parties involved)Copy of Social Security Card (all parties involved)VOEsCurrent Employment Previous Employment
ADDITIONAL DOCUMENTATION THAT MAY BE REQUIREDDivorce Decree or Court Ordered DocumentQuit Claim Deed (Divorce or Separation)Doctors Release authorizing full-time employment (Disability)Additional Tax Returns prior to most recent 2 years (Hardship)Bankruptcy Discharge Papers
SOURCES OF INCOME NOT CONSIDERED IN DETERMINING ELIGIBILITY
Foster CareFamily ContributionsFood StampsMedicaidChild SupportVeterans Administration Educational BenefitsSocial Security/Disability BenefitsRetirement Income
MISCELLANEOUS Bankruptcy: Bankruptcy Must be Discharged or Dismissed.Income Limits: Does not apply.Maximum Delinquency: MHC will allow up to 6 months prior to hardship (included within the $50,000.00 maximum assistance) to cover payments that precede the hardship event date.
COMPLIANCEQuarterly ReportingPipeline ManagementSite Visits/Audits
Mortgage Payment Assistance (MPA) Mortgage Payment Assistance Continuing Education Option (MPACE)
MHC monitors every 90 days for continued eligibilityDocumentation required to determine continued eligibility:Copy of most recent Pay Stub Hire date required if re-employedSelf Employed - Quarterly Profit and Loss statement Current years tax returns & W2s (if you have not already provided them) or statement if you did not fileMDES statement, if unemployed Copy of most recent utility bill
ELIGIBILITY RECERTIFICATION: The individual who experienced the hardship that qualified the household for Home Saver assistance must complete the following:Verify primary residenceVerify the homeowner is unemployed and am available for workIf employed, verify they have obtained employm