Module 3:Module 3:

The SSAThe SSA

7 Pages

263-1

SSA Pg. 1: Cover Letter SSA Pg. 1: Cover Letter (top)(top)

Introduces Short Sale

263-2

How a Short Sale Works

Participation

27

SSA Pg. 1: Cover Letter SSA Pg. 1: Cover Letter (bottom)(bottom)

3-3

SSA Page 2 (top) SSA Page 2 (top)

273-4

120 Days to sell

When to Take ListingWhen to Take Listing

• At or prior to SSA• Listing commission honored if

6% or less• Required contract language– (see pg. 36 of manual)

• Get subordinate lien info

283-5

Maintain property

28

SSA Page 2 BottomSSA Page 2 Bottom

3-6

SSA Page 2 BottomSSA Page 2 Bottom

Monthly Payments?

Servicer may require monthly payments.Freddie Mac requires payments

293-7

SSA Page 2 BottomSSA Page 2 Bottom

Clear title & negotiate with subordinate lien holders

293-8

SSA Page 2 BottomSSA Page 2 Bottom• Servicer may pay up to $8,500 aggregate total to subordinate mortgage lien holders.

293-9

Fannie & Freddie pay 6% of the 2nd lien balance up to a max $6,000.

Fannie & FreddieFannie & FreddieOne Subordinate LienOne Subordinate Lien Payoff Examples Payoff Examples

2nd lien of $50,000

$50,000 x 6% = $3,000

2nd lien of $100,000

$100,000 x 6% = $6,000

293-10

Fannie & Freddie Fannie & Freddie One Subordinate Lien One Subordinate Lien Payoff ExamplesPayoff Examples

2nd lien of $150,000

$150,000 x 6% = $9,000

$6,000 Max.

293-11

Fannie & Freddie Fannie & Freddie Two Subordinate Liens Two Subordinate Liens Payoff ExamplesPayoff Examples

2nd lien of $50,000

3rd lien of $30,000

$50,000 x 6% = $3,000 to 2nd lien holder

$30,000 x 6% = $1,800 to 3rd lien holder

303-12

Fannie & Freddie Fannie & Freddie Two Subordinate Liens Two Subordinate Liens Payoff ExamplesPayoff Examples

2nd lien of $90,000

3rd lien of $30,000

$90,000 x 6% = $5,400 to 2nd lien holder

$30,000 x 6% = $1,800

Only $600 to 3rd lien

303-13

Subordinate LiensSubordinate Liens• Liens released from property• Full release of liability• No $$ or notes from seller or licensee

• HOA/Condo Assn. liens and other subordinate liens NOT included in $8,500 but must be paid off

• Seller should seek legal advice regarding future liability

303-14

SSA Page 2 BottomSSA Page 2 Bottom

Future paperwork.Foreclosure postponed.

313-15

Foreclosure PostponementForeclosure Postponement

• Foreclosure process may begin

• No foreclosure sale:–Determining eligibility

–Awaiting SSA

–During SSA

–Pending closing

–Pending DIL

313-16

SSASSA Page 3 TopPage 3 Top

Four points:1.Arm’s length transaction

313-17

Arm’s Length TransactionArm’s Length Transaction

• Can’t list with or sell to:– Related persons

– Persons with whom the seller has close personal or business relationship

313-18

Arm’s Length TransactionArm’s Length Transaction

• Can’t list “In-House”

• From HAFA Q&A on www.REALTOR.org–Q: May sellers who are real estate agents

list with their broker?

31-323-19

Arm’s Length TransactionArm’s Length Transaction

• Q: May sellers who are real estate agents list with their broker?

• A: No, this would violate the arm's length transaction provision that prevents the seller from listing the property with anyone they have a close personal or business relationship with. This is an anti-fraud provision. If the property is listed by an agent with their broker the risk of an "incentive" being paid and the seller profiting from the transaction increases."

323-20

SSASSA Page 3 TopPage 3 Top

1. Arm’s length transaction2. No commission to seller3. Resale restriction on buyer4. Seller can’t buy-back or lease32

3-21

SSA Page 3 TopSSA Page 3 Top

Authorization to talk to others

323-22

SSASSA Page 3 TopPage 3 Top

Tax consequences notice

323-23

SSA Page 3 TopSSA Page 3 Top

Credit reported as: “settled for less than full payment.”

323-24

SSA Page 3 BottomSSA Page 3 Bottom

Deed-in-Lieu

Deed-in-Lieu

333-25

Deed-in-LieuDeed-in-Lieu• After 120 day marketing period expires

• Optional language

• Voluntary transfer to lender

• Borrower gets $3,000

• Sub liens removed– Up to $6,000 available

• If borrower uncooperative, servicer forecloses

333-26

Deed-for-Lease ProgramDeed-for-Lease Program

• After Deed-in-Lieu

• Servicer may allow borrower to:– Lease property back

(Deed-for-Lease)– Repurchase property at

future date

343-27

SSA Page 4SSA Page 4

Contract

Contract

Acceptance

Acceptance

& RASS& RASS

353-28

Contract Acceptance & RASSContract Acceptance & RASS

• 3 Biz days to submit:– Purchase agreement– Addenda– RASS– Buyer’s proof of funds

or commitment letter

• Approval or disapproval within 10 Biz days

353-29

Pages 5-7: Program Terms & ConditionsPages 5-7: Program Terms & Conditions

1. List Price or Acceptable Sale Proceeds

35-363-30

List Price or Acceptable ProceedsList Price or Acceptable Proceeds

• Established through BPOs

• List price more likely

• Fannie & Freddie prohibit disclosing minimum net proceeds

• Seller & licensee should be realistic– Demonstrate to servicer why price

is too high

35-36

Paragraph 1

3-31

Listing Agreement

• Required clauses• Cancellation• Lender/MI approval

36

Paragraph 2

3-32

Property Maintenance & Expenses

• Seller responsible

• Damage reported

36

Paragraph 3

3-33

Partial Mortgage Payments

• Seller may be required to make payments

• Cannot exceed 31% of gross income

37

Paragraph 4

3-34

5a. Closing Costs5a. Closing Costs

Servicer will select one: •Total costs may not exceed $__________

• Total costs may not exceed _____% of list price

• Itemized allowable closing costs including commission of _____% of sales price

37

Paragraph 5

3-35

5b. Subordinate Liens5b. Subordinate Liens

•Subordinate Liens: Up to $8,500 total aggregate• 6% of balance (Fannie & Freddie only)•Full release of liability required

37-38

Paragraph 5

3-36

5c. Commissions5c. Commissions

Commissions

38

Paragraph 5

3-37

CommissionsCommissions• Commission % stated• Listing commission honored• Not to exceed 6%

• No commission to seller or buyer

• If rebate offered, commission is reduced

383-38

Third Party VendorsThird Party Vendors

• May be retained by servicer

• Fees cannot be charged to seller nor deducted from commission

383-39

5d. Relocation assistance5d. Relocation assistance

Relocation assistance for occupant

•$3,000 per household

38

Paragraph 5

3-40

Assistance Eligibility

39

Paragraph 6

3-41

•Vacate at closing•Principal residence•Dodd-Frank Certification

3 Biz days to submit:• RASS• Contract & Addenda• Buyer’s proof of funds/commitment letter

Sales Contract

39

Paragraph 7

3-42

Required contract language• Arm’s length transaction• Buyer can’t sell within 90 days

Parties to the Sale

40

Paragraph 8

3-43

Required closing time frame can’t be less than 45 days from contract acceptance.

Closing

40

Paragraph 9

3-44

• Foreclosure process may continue• Sale is suspended

Foreclosure Sale Suspension

40

Paragraph 10

3-45

• No personal liability• No deficiency judgment

Satisfaction & Release of Liability

41

Paragraph 11

3-46

MI approval required

Mortgage Insurer Approval

41

Paragraph 12

3-47

Review reasons with seller

Termination of this Agreement

41

Paragraph 13

3-48

SSA TerminationSSA Termination• Financial position improves• Borrower or Broker fails to act

in good faith• Change in property condition• Fraud or misrepresentation• Bankruptcy• Litigation• Payments not made

413-49

• No guarantees• Lender retains other remedies

Settlement of Debt

41

Paragraph 14

3-50

SSA Pg. 8 Borrower’s Signature

423-51

Borrowers’ Signatures• Exceptions:•Death•Divorce•Special circumstances

SSA Page 8:SSA Page 8:

Broker Acknowledgement• Broker not a party to SSA • Salesperson may sign• Agreement to change listing to conform to SSA43

3-52

SSA Page 8:SSA Page 8:

•Servicer signature•HOPE Hotline•Fraud Notice

443-53

Sign & Return the SSASign & Return the SSA

• Within 14 days of “Effective Date”

• “Effective Date” = date mailed by servicer

443-54