Home Affordable Unemployment Program (UP)

Transcription

1 Home Affordable Unemployment Program (UP) Training for Servicers 1

2 Agenda 1 2 Phase 1 Phase 2 Phase Overview UP Process Evaluation Phase Forbearance Period Transition Phase Reporting Requirements Resources 2

3 Overview What Is UP? Home Affordable Unemployment Program (UP) Core element of the MHA Program. Offers assistance to borrowers who are suffering a financial hardship due to unemployment. Grants a forbearance during which the borrower s monthly mortgage payment may be reduced or suspended. UP Expansion Effective on June 1, 2012, UP was expanded to allow more homeowners to qualify for assistance: Requirement that the borrower s monthly mortgage payment ratio be greater than 31% was removed; Loans secured by rental properties may now be considered; Borrowers who did not successfully complete a HAMP trial period plan or lost good standing under a permanent modification may now be considered for UP; The initial forbearance period was extended to a minimum of 12 months (there continues to be no maximum forbearance period); and Treasury announced on May 31, 2013 that the deadline to request UP assistance was extended to December 31,

4 UP Process Phase 1 Phase 2 Phase 3 Evaluation Phase Forbearance Period Transition Phase 4

5 UP Process Evaluation Phase Eligibility Criteria Property Borrower Existing Mortgage UP Specific Criteria Guideline May be the borrower s principal residence or rental property occupied by a tenant or available for rent on a year-round basis. One-to-four units. Property securing the mortgage loan has not been condemned. Has documented financial hardship and does not have sufficient liquid assets to make the monthly mortgage payment. Is unemployed at date of request. Must be a natural person. Has submitted a request (phone, mail, fax or ) for UP Forbearance on or before December 31, Amount owed on first mortgage is equal to or less than $729,750. Higher limits for 2-4 unit properties. First lien mortgage originated on or before January 1, The mortgage loan is delinquent or default is reasonably foreseeable. 5

6 UP Process Evaluation Phase Eligibility Criteria Guideline Monthly mortgage payment ratio The borrower must be considered for UP assistance regardless of his/her monthly mortgage payment ratio. Total delinquency The delinquency, at the time of the UP request, does not exceed 12 months of the borrower s scheduled monthly mortgage payments. Unemployed nonborrower UP Specific Criteria Unemployed borrower must be liable on the note to qualify. 6

7 UP Process Evaluation Phase Eligibility Criteria Receipt of unemployment benefits Guideline Borrower will receive unemployment benefits in the month of the Forbearance Period Effective Date; or Borrower is unemployed and received unemployment benefits within six months prior to request for UP, but benefits are currently expired. Prior unemployment mortgage assistance - Received Borrower must be evaluated for extension of forbearance assistance to an aggregate total minimum of 12 months if: UP forbearance plan was completed prior to October 1, 2011 and borrower remains eligible for UP; or Borrower is currently in an UP forbearance plan as of October 1, 2011 and remains eligible. Prior unemployment mortgage assistance - Denied Borrower must be re-evaluated for unemployment assistance for a minimum of 12 months if he/she was previously denied prior to October 1, 2011 for the following reasons: The mortgage was seriously delinquent (more than three mortgage payments due and unpaid) at time of the request; or The borrower received less than three months of unemployment benefits. 7

8 UP Process Evaluation Phase Borrower Status Interaction with HAMP A borrower who is unemployed and requests assistance under HAMP must be evaluated for and, if qualified, must receive an offer for an UP forbearance plan. Borrower becomes unemployed while being evaluated for HAMP or while in a HAMP Trial Period Plan (TPP). Borrower becomes unemployed while in a HAMP permanent modification and loses good standing. Borrower in a HAMP permanent modification who is in good standing is not eligible for UP. Unemployed borrower in a HAMP TPP fails to make all required trial period payments. 8

9 UP Process Evaluation Phase Suspension of a Referral to Foreclosure or Foreclosure Sale A loan may not be referred to foreclosure or a foreclosure sale must not be conducted if any of the following apply: Borrower makes a request and is being evaluated for UP. Forbearance Plan Notice (FPN) has been mailed. During the initial UP forbearance plan or any extension thereof. Following the UP forbearance plan while the borrower is being evaluated for or participation in HAMP or HAFA. Until any associated Escalated Case has been resolved. NOTE: If a request for UP assistance is received after midnight on the seventh business day prior to a scheduled foreclosure sale, considering the borrower for UP is not required. 9

10 UP Process Evaluation Phase Simultaneous Forbearance Plan and Foreclosure Communications Policy If the borrower s mortgage was referred to foreclosure prior to the UP evaluation, provide a written notification to the borrower that: Explains concurrent forbearance and foreclosure processes; and States that while certain foreclosure activities may continue, the home will not be sold at a foreclosure sale while the borrower is being considered for or making payments under an UP forbearance plan. Model language for the notice is available on HMPadmin.com. 10

11 UP Process Evaluation Phase Non-MHA Unemployment Assistance Program UP interacts to complement Non-MHA Unemployment Assistance Programs. Includes Hardest Hit Fund (HHF), or other state mortgage assistance programs. Non-MHA Unemployment Assistance may precede an UP forbearance plan or be used to extend it. 11

12 UP Process Evaluation Phase Timeline Submission Receive Documents Review & Determine Eligibility Communication Receive request for UP consideration from borrower. Send written notice to borrower within 10 business days confirming the receipt of the request and identifying required documentation. Allow the borrower no fewer than 15 calendar days to send the required documents. Proceed with review and decision of documentation provided by the borrower. Determine eligibility within 30 calendar days of receipt of required documentation from borrower. Communicate status to borrower within 10 business days of decision by sending: FPN; or Non-Approval Notice. 10 business days 15 calendar days 30 calendar days 10 business days 12

13 UP Process Evaluation Phase Borrower Not Eligible Unemployed borrowers who are ineligible for UP must: Receive a Non-Approval Notice that includes the primary reason for ineligibility and a description of other foreclosure alternatives. Be evaluated for foreclosure alternatives, if eligible, including: Proprietary forbearance programs; HAMP; HAFA; or Proprietary short sale or deed-in-lieu (DIL) options. NOTE: If the borrower is not offered any type of unemployment forbearance plan and is evaluated for HAMP, exclude unemployment benefits from the monthly gross income. 13

14 UP Process - Evaluation Phase Borrower Declines UP A borrower who is eligible for an UP forbearance plan, but declines, must be notified that he or she may not be considered for a HAMP modification, while eligible for UP. Although not required, a borrower MAY be evaluated for HAMP, if permitted by investor guidelines. A borrower may request reconsideration under HAMP at a future time, if eligible. 14

15 UP Process Forbearance Period Phase 1 Phase 2 Phase 3 Evaluation Phase Forbearance Period Transition Phase 15

16 UP Process Forbearance Period Forbearance Plan Notice (FPN) 1 2 Send the borrower either an FPN or a Non-Approval Notice within 10 business days of determination. Borrowers are not required to sign or return the FPN, unless required by investor guidelines. The FPN must include: Effective date, duration, and expiration of UP forbearance plan Monthly payment amount Explanation of post-up procedures Borrower s responsibility to provide employment status changes 16

17 UP Process Forbearance Period Application of UP Payments Payments must be applied in accordance with the terms of the existing loan documents. Hold partial payments as unapplied funds and apply once the amount reaches a full monthly payment. Apply any unapplied funds remaining at the end of the UP forbearance plan that do not constitute a full principal, interest, taxes and insurance, or PITI, payment to reduce any amounts that would otherwise be capitalized onto the principal balance. 17

18 UP Process Forbearance Period Forbearance Period Extensions 1 Forbearance plans may be incrementally extended. 2 Discretion should be used for any borrower eligibility review or documentation requirements that may apply after the initial forbearance period. 18

19 UP Process Forbearance Period Forbearance Plan Termination The FPN may be terminated if any of the following conditions occur: Terms of the UP forbearance plan are not honored Borrower advises that he or she is no longer going to seek employment Property is abandoned or sold (unless vacancy is approved by the servicer) Borrower is re-employed Borrower is evaluated for a modification under HAMP and qualifies for a TPP Dollar amount of delinquency exceeds 12 months of the scheduled monthly mortgage payments 19

20 UP Process Transition Phase Phase 1 Phase 2 Phase 3 Evaluation Phase Forbearance Period Transition Phase 20

21 UP Process Transition Phase End of Forbearance Period Transition from UP If borrower remains unemployed: Extend forbearance based on investor guidelines. Consider for HAMP. Consider for proprietary modification options. Consider for HAFA or other short sale or DIL programs. If borrower has found employment: Consider borrower for HAMP. Consider borrower for proprietary modification options. Consider borrower for HAFA. 21

22 UP Process Transition Phase HAMP Consideration after UP Required Not Required Borrower must submit a complete Initial Package: 1. RMA; 2. Updated proof of income; and 3. IRS Form 4506-T, 4506T-EZ or a signed copy of the borrower s tax return for the most recent tax year, including all applicable schedules and forms. 22

23 UP Process Transition Phase Borrower s Monthly Gross Income Updated employment income to include: New employment income as verified by an offer letter First pay stub Other documentation consistent with the judgment employed by servicers when modifying mortgage loans held in their own portfolio 23

24 UP Process Transition Phase Borrower Not Eligible for HAMP after UP Borrower must be considered for other available loss mitigation options including: HAFA (Short sale and DIL options); and Proprietary modifications Other alternatives may be considered including: Capitalizing the arrearages and re-amortizing the new balance into a non- HAMP modification. Maintaining the current scheduled payment by extending the loan term by the equivalent of the months of delinquency. NOTE: Requiring a lump sum contribution from the borrower for unpaid interest and fees, as a condition to considering the borrower for other available loss mitigation options, is PROHIBITED. 24

25 Reporting Requirements Submissions Ensure that the data that is reported is accurate, timely, complete and consistent with servicing records. Submit monthly UP forbearance plan summary level data Report milestones, such as when the borrower exits from a TPP to UP and when transitioning from UP forbearance plan to TPP Continue to report a full-file status report to credit repositories for each loan in an UP forbearance plan 25

26 Resources For Servicers Servicer Integration Team HAMP Solution Center Training resources NPV tools and documents Reporting resources Live webinar training calendar 26

27 Discussion / Questions Thank You 27