Loan Modifications 101 Tara Twomey National Consumer Law Center

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1 Loan ifications 101 Tara Twomey National Consumer Law Center By the time the foreclosure crisis reached its peak in 2008, the climate for loan modifications had changed dramatically from earlier options for default management. In the past, mortgage servicers were reluctant to evaluate any but the simplest proposals for straightforward repayment agreements to avoid foreclosure. With the rapid increase in the number of homes entering foreclosure, loan modifications became a more common option for resolving defaults. Industry practice was bolstered by federal government initiatives such as Hope for Home Owners, which was authorized under the Housing and Economic Recovery Act of 2008, and later the Making Homes Affordable Program. Special programs apply to loans purchased by Fannie Mae or Freddie Mac, and loan insured by HUD (FHA), VA, or the Rural Housing Service. Other workout options were created as a result of investigations or litigation, such as the National Mortgage Settlement entered into between the state attorneys general and the five lending mortgage servicers. The mortgage servicing industry continues to develop its own proprietary or in-house workouts that continue to occur outside these other programs. Identifying the Servicer, Owner, and Insurer A mortgage loan is typically assigned several times during its term, and may be held by one entity but serviced by another. Loss mitigation programs vary depending on the servicer, the loan owner, or the insurer of the loan. Knowing exactly who owns and services the mortgage is a critical first step to negotiating a loan modification. Here are some tools to use in answering these questions. 1. Send a TILA 1641(f)(2) Request to the Servicer The Truth in Lending Act contains a provision that requires the loan servicer to tell the borrower who the actual holder of the mortgage really is. 1 Upon written request from the borrower, the servicer must state the name, address, and telephone number of the owner of the obligation or the master servicer of the obligation. 2 Unfortunately, the TILA provision does not specify how long the servicer has to respond to the request. Presumptively, the servicer should have a reasonable amount of time to respond. One possible standard for determining what is reasonable in this situation is to look to the time limitations imposed by RESPA. Because servicers are now mandated to provide the information responsive to a section 1641(f) request within ten business tens under RESPA, it should now be reasonable in most circumstances to expect the servicer to answer within ten business days U.S.C. 1641(f). The provision also should require disclosure to the borrower s advocate with a properly signed release form. See NCLC Foreclosures, Appx. A, Form 3, infra. 2 If the service provides information about the master servicer, a follow-up request should be made to the master servicer to provide the name, address, and telephone number of the owner of the obligation. National Consumer Law Center

2 Failure to comply with the transfer notice requirements gives rise to a private right of action, which includes recovery of actual damages, statutory damages, costs, and attorney fees. 3 Although TILA liability is generally limited to creditors and assignees, violations of 1641(f) are specifically listed in 15 U.S.C. 1640(a) as giving rise to civil liability. 2. Review Transfer of Ownership Notices The Helping Families Save Their Homes Act of 2009 added a new provision in TILA which requires that whenever ownership of a mortgage loan securing a consumer s principal dwelling is transferred, the creditor that is the new owner or assignee must notify the borrower in writing, within 30 days after the loan is sold or assigned, of the following information: the new creditor s identity, address, and telephone number; the date of transfer; location where the transfer is recorded; how the borrower may reach an agent or party with authority to act on behalf of the new creditor; and any other relevant information regarding the new owner. 4 The new law applies to any transfers made after the Act s effective date, which was May 20, The Mortgage Electronic Registration System (MERS) purportedly has a program to implement the new law. 5 Advocates should request that clients provide copies of any ownership notices they have received based on this new law. Assuming that there has been compliance with the statute, the advocate may be able to piece together a chain of title as to ownership of the mortgage loan (for transfers after May 20, 2009) and verify whether any representations made in court pleadings or foreclosure documents are accurate. Failure to comply with the disclosure requirement gives rise to a private right of action against the creditor/new owner that failed to notify the borrower Send a Request for Information under RESPA Any written request for identification of the mortgage owner sent to the servicer will not only trigger rights under 15 U.S.C. 1641(f) discussed earlier, but will also be a qualified written request under the Real Estate Settlement Procedures Act. 7 As of January 10, 2014, the RESPA statute continues to refer to qualified written requests, but the regulations consider a written inquiry for the identification of the mortgage owner 3 Reg. Z, (e). 4 See 15 U.S.C. 1641(g)(1)(A) - (E). 5 Under the system which MERS is calling MERS InvestorID, a notice will be automatically generated whenever a "Transfer of Beneficial Rights" occurs on the MERS system. A sample Transfer Notice and Training Bulletin are available for download at: MERS is taking the position, based on the wording of the statute (which refers to place where ownership of the debt is recorded ), that it can comply by disclosing only the location where the original security instrument is recorded because the note is not a recordable document. If MERS members do not agree with this interpretation, they can opt out of MERS InvestorID and presumably send their own notice. 6 See 15 U.S.C. 1640(a) U.S.C. 2605(e). National Consumer Law Center

3 as a request for information. 8 A servicer is required to respond to such a request within ten business days of receipt. 9 Actual damages, costs and attorneys fees are available to the borrower for violations, as well as statutory damages up to $2,000 in the case of a pattern and practice of noncompliance Review the RESPA Transfer of Servicing Notices Finding out the loan servicer is generally an easier task because your client is likely getting regular correspondence from that entity. Still, the law requires that formal servicing transfer notices are to be provided to borrowers, and reviewing these can provide helpful information. RESPA provides that the originating lender must disclose at the time of loan application whether servicing of the loan may be assigned during the term of the mortgage. 11 In addition, the borrower must be notified if servicing of the loan is transferred from one entity to another after the loan is made. 12 Failure of the servicer to comply with the servicing transfer requirements subjects the servicer to liability for actual damages, statutory damages, costs and attorney fees. 13 Unlike the TILA requirement discussed earlier, RESPA is limited to the transfer of servicing; it does not require notice of any transfers of ownership of the note and mortgage Go to Fannie and Freddie s Web Portals To help facilitate several of the voluntary loan modification programs, both Fannie Mae and Freddie Mac have taken steps to enable borrowers to quickly determine if Fannie Mae or Freddie Mac owns their loan. Borrowers and advocates can either call a toll-free number 15 or enter a street address, unit, city, state, and ZIP code for the property location on a website set up to provide the ownership information. 16 The website information, however, may in some cases refer to Fannie Mae or Freddie Mac as owners when in fact their participation may have been as the party that had initially purchased the loans on the secondary market and later arranged for their securitization and transfer to a trust entity which ultimately holds the loan. However, the borrower makes a written request as to the identity of the loan, Fannie Mae has instructed servicer s to indicate whether the loan is held in trust by Fannie Mae or held in portfolio Check the Local Registry of Deeds Checking the local registry where deeds and assignments are recorded is another way to identify the actual owner. However, advocates should not rely solely on the registry of deeds to identify the current holder of the obligation, as many assignments are 8 Reg. X, 12 C.F.R Reg. X, 12 C.F.R (d)(2)(i)(A) (effective Jan. 10, 2014) U.S.C. 2605(f) U.S.C. 2605(a) U.S.C. 2605(b) U.S.C. 2605(f). 14 See, e.g., Daw v. Peoples Bank & Trust Co., 5 Fed.Appx. 504 (7th Cir. 2001). 15 For Fannie Mae call FANNIE (8 a.m. to 8 p.m. EST); Freddie Mac call FREDDIE (8 a.m. to 8 p.m. EST). 16 Fannie Mae Loan Lookup, at Freddie Mac Self-Service Lookup, at 17 Fannie Mae, Servicing Guide Announcement, SVC (Oct. 11, 2013). National Consumer Law Center

4 not recorded. In fact, if the Mortgage Electronic Registration System (MERS) is named as the mortgagee, typically as nominee for the lender and its assigns, then assignments of the mortgage will not be recorded in the local registry of deeds. A call to MERS will not be helpful as MERS currently will only disclose the name of the servicer and not the owner. 18 In addition, some assignments may be solely for the administrative convenience of the servicer, in which case the servicer may appear as the owner of the mortgage loan. HAMP Overview Servicer Participation in HAMP Servicers, not investors, participate in HAMP. Servicers agreements with investors are contained in pooling and servicing agreements (PSAs). Most PSAs contain no meaningful restrictions on modifying loans in default. If a PSA contains such a restriction, the servicer must make reasonable efforts to get the investor to waive this restriction. The majority of servicers have signed a Servicer Participation Agreement (SPA) with the U.S. Department of the Treasury, agreeing to participate in HAMP. All servicers who have agreed to participate are required to review the eligibility of any borrower who asks to be considered for the program. A list of participating servicers is available at Copies of the contracts are available at Loans owned by Fannie Mae and Freddie Mac must be modified under their versions of HAMP, whether or not the servicer is otherwise participating in HAMP. Similarly, VA, FHA, and USDA (RHS) loans have their own version of HAMP. When a servicer transfers a mortgage modified under HAMP, the transferee servicer must assume the transferor s obligations under the SPA, including evaluating loans for HAMP, processing HAMP trial modifications, and timely converting trial modifications to permanent modifications. 19 Protections Against Foreclosure Servicers are prohibited from referring a loan to foreclosure or conducting a scheduled sale until the borrower has been evaluated and determined ineligible for HAMP, the borrower has failed to make the required trial plan payments, the borrower has failed to 18 The telephone number for the automated system is When calling MERS to obtain information on a loan, you must supply MERS with the MIN number or a Social Security number. The MIN number should appear on the face of the mortgage. You may also search by property address or by other mortgage identification numbers by using MERS s on-line search tool at 19 Servicers can transfer the Eligible Loan without SPA obligations if one of the circumstances in Section 3.1.1of Chapter 2 of the Making Home Affordable Handbook exists and applicable response periods have elapsed. National Consumer Law Center

5 provide the required documents after at least two written requests, or the borrower has failed to respond entirely to the servicer, after the servicer has complied with HAMP s requirements of reasonable solicitation. Seven days before a foreclosure sale can take place, the servicer must provide its foreclosure counsel with a certification that all HAMP requirements have been complied with. If a borrower requests a HAMP modification seven business days prior to a scheduled foreclosure sale, the servicer must suspend the foreclosure sale while it completes its evaluation of the borrower for HAMP. Similarly, if a borrower has escalated denial of a loan modification seven business days before the scheduled foreclosure sale, the sale must be suspended, pending the resolution of the escalation. Once a borrower is in a trial plan based on verified income, the foreclosure process must be suspended. Basic Program Eligibility To be eligible for HAMP, borrowers must 1) meet the basic program requirements and 2) pass the Net Present Value (NPV) test, an evaluation to determine whether it is more cost effective to modify the loan or foreclose. Basic Program Requirements Both borrowers who are current on their mortgage and those who are delinquent are eligible for a modification under HAMP. If the borrower is current or less than sixty days delinquent, the borrower must demonstrate that default is imminent. Borrowers must meet the following requirements: The loan must have originated before January 1, The monthly mortgage payment ratio must be greater than 31% of the borrower s monthly gross income. 20 The loan must be secured by a one-to-four unit property which is the borrower s principal residence. One-to-four unit investment properties are eligible for HAMP Tier 2 modifications, even if the borrower does not reside at the property. First lien mortgages must have an unpaid principal balance (prior to capitalization of the arrears) equal to or less than: $729,750 for one unit $934,200 for two units $1,129,250 for three units $1,403,400 for four units The Property cannot be vacant or condemned. The loan cannot have been previously modified under HAMP for HAMP Tier 1 modifications. 20 Monthly gross income is the borrower s income before any payroll deductions. National Consumer Law Center

6 Borrowers must submit a hardship affidavit explaining why they cannot make full mortgage payments. 21 Borrowers must agree to set up an escrow account for taxes and hazard and flood insurance, if one does not already exist. Borrowers must certify that they have not been convicted within the last ten years of felony larceny, theft, fraud, forgery, money laundering, or tax evasion in connection with a mortgage or real estate transaction. Servicers cannot do the following: Charge borrowers for the modification. Require dead or divorced borrowers on any modification documents. Net Present Value Test The purpose of the Net Present Value (NPV) test is to determine whether it is more cost effective to modify the loan or foreclose for the owners of the loan. The NPV test compares the net present value of money the investors in the loan would receive if the loan were modified with what would be received if no modification were made. Participating servicers are required to perform a NPV test if a borrower meets the basic eligibility test outlined above. ifications are NPV positive if the investors will get a greater return from modifying the mortgage than not. The servicer must modify the mortgage if it is NPV positive unless there is fraud or a prohibition in the securitization contracts. If prohibited by contract, servicers are required to use reasonable efforts to obtain waivers or approvals from the parties. ifications are NPV negative if the investor is forecast to profit more from proceeding with the foreclosure than from modifying. Servicers may modify under these circumstances, if permitted by investors. Servicers are also required to run an NPV test with principal reduction if the unpaid principal balance of the loan is greater than 115% of the home s current market value. Treasury has created a public site, CheckMyNPV.com, to allow homeowners, counselors, and other interested parties to confirm the servicers NPV calculation. This tool provides a NPV evaluation estimate using the same formula servicers are required to use and the discount rates of the largest servicers are embedded in the program. Homeowners who receive an NPV denial letter from the servicer will have available the servicers inputs to enter. Provided the homeowner uses the inputs provided by the servicer in any NPV denial letter, the only variation could result from investor restrictions; servicers must document their efforts to seek waivers of any investor restrictions. 21 The affidavit does not have to be notarized. National Consumer Law Center

7 Income Verification The borrower must provide the required income verification documents to qualify for a HAMP modification. This includes copies of two recent pay stubs for each wage earning borrower, and either IRS Form 4506-T or the most recent tax return, if the borrowers file taxes. Income less than 20% or more of the borrower s total gross income need not be documented, including income from non-borrower residents, rental income, public benefit income. Income verification is required for all borrowers on the loan. However, servicers cannot require income verification for dead or divorced borrowers. Affordability Determination Once the borrower is approved for modification, the terms of the modification are set through a standard modification waterfall. The goal of these steps is to alter the terms of a mortgage to reduce the total mortgage payment, including principal, interest, taxes, insurance, and association fees, to 31% of the monthly gross income of all borrowers on the mortgage. First, the servicer must capitalize any accrued interest, escrow advances to third parties, and servicing advances paid to third parties related to the preservation of the property and enforcement of the mortgage, if allowed by state law. Second, the servicer can reduce the interest rate as low as 2%, fixed for five years. At the end of five years, the payments increase incrementally at one percentage point a year until they reach the level of the prime monthly mortgage survey rate as reported by Freddie Mac the week the loan is evaluated for modification. Third, if the payment is still not affordable, the servicer can extend the amortization of the loan to a maximum of 40 years. Fourth, the servicer can provide for principal forbearance in which a portion of the principal is deferred and no interest accrues on the deferred amount. The forbearance amount is due at the end of the loan term or when the loan is paid off or refinanced. Servicers may also forgive principal before or instead of any of these steps. Trial Payment Period After affordability is determined and before the modification becomes permanent, the borrower must complete a three-month trial payment period in which he or she makes monthly payments based on the proposed new loan terms determined by the standard modification waterfall. 22 The borrower must make each trial period payment by the last day of the month in which it is due in order to qualify for a permanent modification. 22 During this trial period the servicer is required to temporarily suspend the foreclosure process, if it has been initiated, and the servicer may not initiate foreclosure or conduct a sale. National Consumer Law Center

8 If the trial payment period is successfully completed and the servicer confirms the borrower meets the eligibility criteria, the loan modification becomes permanent on the first day of the month following the trial period. If the servicer fails to provide the homeowner with the necessary documents in a timely fashion, the servicer must still treat the borrower s account as if the modification had been made permanent in all respects, including the effective interest rate and the interestbearing principal balance. The borrower need not continue making trial modification payments while waiting for the permanent modification documents. Notice of Denial If a modification is denied at any stage of the process, servicers are required to provide borrowers with a denial notice and a reason for the denial. The borrower may then correct NPV values if necessary. If a correction is accurate, material, and likely to change the NPV outcome, the servicer must re-run the NPV test using the same test and the same inputs, other than those challenged by the borrower. While the test is being re-run, the foreclosure sale must be suspended. Redefault and Loss of Good Standing If a borrower becomes more than 90 days delinquent, the borrower loses good standing. At that point, no further incentives are paid to the servicer, investor, or borrower and the borrower cannot be reconsidered for a future HAMP Tier 1 modification. However, the servicer is still required to work with the borrower to cure the default and consider other available loss mitigation options before initiating foreclosure. Homeowners who have defaulted on a HAMP Tier 1 modification may be considered for a HAMP Tier 2 modification. However, borrowers who fail to make their first payment under a HAMP Tier 1 trial modification, or borrowers whose servicer miscalculated their income (a common error) with the result that the trial plan overstated the monthly payment by 10%, or borrowers who fail to accept the trial plan for any reason are eligible to reapply for a HAMP Tier 1 modification if they can show a change of circumstances. Borrowers in Bankruptcy Servicers cannot deny modification because of a borrower s pending bankruptcy. Borrowers who file for bankruptcy after entering a HAMP trial period plan may not be denied a permanent modification on the basis of a bankruptcy filing. Borrowers who received a chapter 7 discharge and who did not reaffirm the mortgage sought to be modified are eligible, and no reaffirmation of the debt may be required. National Consumer Law Center

9 HAMP Tier 1 vs. HAMP Tier 2 HAMP Tier 2 modifications, unlike standard HAMP Tier 1 modifications, can be made on investment property that does not also serve as the borrower s residence. HAMP Tier 2 modifications are also available to homeowners who have redefaulted on a HAMP Tier 1 modification, even without a showing of change of circumstances. Borrowers must otherwise meet the basic HAMP eligibility requirements. The HAMP Tier 2 modifications follow a set waterfall, without regard for the affordability of the final payment. For all HAMP Tier 2 modifications, the loan is modified by Capitalizing arrears Adjusting interest rate Extending term to 480 months o Principal forbearance. The interest rate is lowered, for all borrowers, to the current Freddie Mac Prime Mortgage Survey Rate plus 50 basis points, rounded to the nearest 1/8th of a percentage point. Similarly, all borrowers whose unpaid principal balance exceeds 115% of the current value of the property will receive a fixed amount of principal forbearance, based on their loan terms, in a HAMP Tier 2 modification. After the terms of the loan modification are set, it is checked against the Net Present Value test and screened for affordability. Affordability for HAMP Tier 2 modifications is defined as resulting in a debt-to-income ratio between 25% and 42% (in contrast to HAMP Tier 2 s strict insistence on a post-modification debt-to-income ratio of 31%), coupled with a payment reduction, from the pre-modification payments, of 10%. Second Lien ification Program Servicers who participate in the Second Lien ification Program (2MP) must modify second liens they service if the corresponding first lien is modified. The second lien may be either extinguished or modified. If modified, it must be modified following the same steps as required for the first lien modification, with interest reduced to 1%, and the term extended out to the term on the modified first lien. If there is principal forbearance on the modification of the first lien mortgage, there must be principal forbearance in the same proportion on the second line modification. Unemployed Borrowers A separate program known as the Home Affordable Unemployment Program (UP) exists for unemployed borrowers. If the borrower declines an offer for an UP forbearance plan, the servicer is not required to offer the borrower a modification under HAMP. However, the servicer, at its discretion, may offer to evaluate the borrower for HAMP in accordance National Consumer Law Center

10 with investor guidelines. Upon completion of the three month UP forbearance, the servicer must evaluate the borrower for HAMP. Borrowers who live in a federal disaster area may combine their UP forbearance sequentially with a three month federal disaster forbearance. Program Incentives HAMP provides for the use of government funds to pay servicers for successful loan modifications. If the borrower completes the initial 3-month trial payment period, the servicer may receive $400 to $1,600 per loan modified, depending on delinquent the mortgage was when modified. Servicers are not permitted to require borrowers to pay down any arrearages in order to qualify the loan for higher incentive payments. If the borrower remains in the program and the borrower s monthly mortgage payment is reduced by 6% or more, the servicer may receive up to $1,000 each year for up to three years. The investor receives a one-time $1,500 bonus if the borrower was current before the loan modification and the borrower s monthly mortgage payment is reduced by 6% or more, as well as additional subsidies to support the reduction of the payment, protect against further price declines, and support principal reduction. If the borrower remains current on the modified mortgage, he or she will receive $1,000 each year for up to five years towards reducing the principal balance on the mortgage. These payments are made directly to the servicer and are not included in income for federal tax purposes. National Consumer Law Center

11 FHA-HAMP Yes Yes, ML Borrower Eligibility HAMP Tier 1 HAMP Tier 2 GSE HAMP GSE Who Is Eligible? Only homeowners Small landlords and homeowners Homeowners with GSE loans GSE loans Homeowners with FHA-insured mortgages Second Bite at the Apple? No Yes (but only on Tier 1, not Tier 2) No Yes, after 12 months Yes, after 24 months & change in circumstances Hardship Required No Yes, if mortgage on rental property Yes Yes Yes Borrowers in Bankruptcy Eligible? Imminent default Yes Yes for Freddie Mac, no for Fannie Mae Yes, servicer defined Yes, GSE defined, must involve death, divorce, or disability unless indicator is 1

12 Loan and Property Eligibility 12 months before default No limit HAMP Tier 1 HAMP Tier 2 GSE HAMP GSE FHA-HAMP Loan originated Before January 1, 2009 Before January 1, months before default MTM-LTV No limit, though NPV will forbid significant equity No limit, though NPV will forbid significant equity 80%, until April 1, 2014

13 Application Application Form HAMP Tier 1 HAMP Tier 2 GSE HAMP GSE FHA-HAMP RMA Form 710 No standard form Where Rules Are hmpadmin.com, MHA Handbook, Chapter II Seller-Servicer Guide, available through web sites Mortgagee Letters, available at HUD s website When Does the Program End? Applications have to be received by Dec. 31, 2015 TPP by 3/1/2016 Never (Streamline d mods end 12/1/15) In Active Litigation? Yes, although escalations may be limited Yes No, except CCPA claims Never Yes

14 Solicitation Solicitation Required? Time for Solicitation HAMP Tier 1 HAMP Tier 2 GSE HAMP GSE Yes No Yes Yes Within 61 days of missed payment None days after missed payment FHA-HAMP Within 32 days of missed payment

15 Evaluation Investor Restrictions HAMP Tier 1 HAMP Tier 2 GSE HAMP GSE Yes, but must seek waiver No No No NPV Test Yes Yes No No FHA- HAMP Order of Evaluation Back-end DTI HAMP Tier 1 first HAMP first Only after other loss mitigation options evaluated & rejected No cap No cap >55% still requires credit counseling No cap No cap

16 FHA-HAMP Driven by payment PMMS + 25 basis points (4.625%, as of 1/20/13) Terms HAMP Tier 1 HAMP Tier 2 GSE HAMP GSE How mod terms are set Driven by payment Rigid application of formula Driven by payment Rigid application of formula Capitalize arrears Yes Yes Yes Yes Yes Interest rate Can go as low as 2% PMMS + 50 basis points (4.875%, as of 1/20/13) Can go as low as 2% 4.625%, as of 1/20/13 Term Extended Up to 480 months 480 months Up to 480 months 480 months 360 months

17 Target Payments Current Payment Minimum payment reduction Target payment Payment Cap HAMP Tier 1 PITIA HAMP Tier 2 PITIA GSE HAMP GSE FHA-HAMP PITI > 31% DTI >25% DTI >31% >10% >25% Any amount 10% Any amount 31% DTI 25% -55% DTI 31% DTI 10%-55% DTI None Greater of 10% or $100 (for standardfha loan mods). Target of 20% for FHA-HAMP, but can be less, depending on treatment of arrearages 25% - 31% DTI 31% DTI 55% DTI 31% DTI 55% DTI 40% DTI

18 FHA- HAMP Principal Reduction & HAMP Tier 1 Forbearance HAMP Tier 2 GSE HAMP GSE Principal Reductions Principal forbearance caps Yes Yes Not yet Not yet No, just deferment Greater of MTM LTV 100% or 30% of postcapitalizatio n UPB Lesser of MTM LTV 115% or 30% of postcapitalization UPB Greater of MTM LTV 100% or 30% of postcapitalizatio n UPB Lesser of MTM LTV 115% or 30% of postcapitalizatio n UPB 30% of UPB, before default Borrower pay for performance incentives Yes, up to $5,000 No Yes No No

19 Limits on Abuse Late fees capitalized? Caps on foreclosure fees capitalized? Waiver of legal claims? Charges for loan modification? HAMP Tier 1 HAMP Tier 2 GSE HAMP GSE No No No No No No No Yes Yes ($1,800 Freddie Mac) No No No No?? FHA-HAMP Yes No No No No No ($1850)

20 Enforcement & Incentives Internal; NSC at (877) HAMP Tier 1 HAMP Tier 2 GSE HAMP GSE FHA-HAMP Rules Privately Enforceable Yes, see Wigod Probably, following Wigod Probably, following Wigod?? Yes, see Bankers Life v. Denton Escalations Internal; escalations@hmpadmin.com borrower_outreach@freddi emac.com Phone: FREDDIE resource_center@fanniema e.com Phone: FANNIE Incentives to Servicers $800-$2,000, plus $1,000/year for 3 years $800-$2,000 $400- $1,600 $400-$1,600 $750 for executed loan mod

21 Dual Tracking and Foreclosure > 37 days before scheduled sale Evaluation Before Foreclosure? HAMP Tier 1 HAMP Tier 2 GSE HAMP GSE Yes Not required Yes Yes Yes FHA-HAMP Foreclosure Sale Suspended If Application Received >7 business days before scheduled sale > 37 days before scheduled sale, for 14 days after mod offered > 37 days before scheduled sale, for 14 days after mod offered Foreclosure proceedings suspended Foreclosure Proceedings Terminated During trial plan During trial plan Upon permanent mod? Upon permanent mod? During trial plan During trial plan Upon permanent mod? Upon permanent mod