Keep Your Home California Foreclosure Prevention Programs Joint Oversight Hearing Assembly Housing and Community Development And Banking Committees March 14, 2011

2 Keep Your Home California Program Objectives Develop programs that help prevent avoidable foreclosures for eligible low and moderate income homeowners Programs designed to address one or more aspects of the current foreclosure crisis:  Financial hardship when combined with negative equity impacts homeowner’s ability to help themselves  Cannot refinance loan to obtain better terms  Unable to sell their home  Unemployment  Change in household circumstance such as death, illness or disability  Recent or upcoming increase in their monthly mortgage payment that will result in financial hardship  Help homeowners that need help to reinstate their delinquent loan  Help homeowners that can no longer afford their home

3 Overview Four programs currently offered by Keep Your Home California –Unemployment Mortgage Assistance –Mortgage Reinstatement Assistance Program –Principal Reduction Program –Transition Assistance Program

4 Estimated Program Assistance Program Allocated Program Dollars Projected # of Households Assisted Unemployment$875 million60,500 Mortgage Reinstatement $129 million9,200 Principal Reduction$790 million25,135 Transition Assistance $32 million6,470

5 General Homeowner Eligibility Requirements Own and occupy home as primary residence Meet low and moderate income limits (120% AMI) Complete and sign a Hardship Affidavit – document reason for hardship Mortgage loan is delinquent or in imminent default Adequate income to sustain mortgage payments after reinstatement and/or modification, according to participating lender guidelines Up to $50,000 of assistance per household

6 General Property Eligibility Requirements The property must be located in California Property must be owner occupied, principal residence Mortgage is the first lien loan Current unpaid principal balance of first mortgage cannot exceed GSE limit (currently $729,750) Property must not be abandoned, vacant, or condemned

General Property Exclusion Criteria Homeowner owns property other than the primary residence being considered for assistance Additional exclusions applicable to PRP only – effective 4/4/11 –Loan was originated after January 1, 2009 –Homeowner has consummated a “cash out refinance,” including a cash out junior lien  Streamline refinance - OK  Junior liens obtained to purchase home - OK 7

8 Unemployment Mortgage Assistance (UMA) Provide assistance to homeowners who have experienced involuntary job loss and are receiving California EDD unemployment benefits Provide temporary benefit assistance in the form of a mortgage payment subsidy for maximum of six months Monthly benefit up to $3,000 or 100% of the first lien mortgage loan PITIA, whichever is less –Maximum per household assistance is $18,000 –Benefit assistance does not include servicer corporate advances or fees Servicer to provide homeowner with 3 months of additional forbearance, as allowed by investor guidelines; can precede or follow UMA assistance Designed to complement other foreclosure prevention programs including HAMP UP and proprietary forbearance plans

9 MORTGAGE REINSTATEMENT ASSISTANCE PROGRAM (MRAP) Assist eligible homeowners with reinstatement by providing payment assistance for first lien mortgage loan Benefit assistance up to $15,000 per household - homeowner participation is limited to one-time payment Can be combined with loan modification that may or may not include Principal Reduction Program Can follow UMA if homeowner hardship is not cured during unemployment benefit assistance period

10 PRINCIPAL REDUCTION PROGRAM (PRP) Help homeowner attain affordable monthly payment with goal of 31% front-end ratio Benefit assistance up to $50,000 per household, less monies previously received from other KYHC Programs Designed to work in conjunction with standard HAMP and proprietary loan modification programs, including HAMP PRA One-to-one financial match from participating investors provides homeowners with a maximum first lien principal reduction up to $100,000. Homeowner earns principal forgiveness over time; must occupy home and maintain payment in good standing

11 THE TRANSITION ASSISTANCE PROGRAM (TAP) Provide transition assistance benefits to homeowners who can no longer afford their home and want to avoid foreclosure; help homeowners make a smooth transition to alternative housing Benefit assistance up to $5000 per household; when combined with HAFA assistance is limited to $2000 per household Benefit assistance provided in conjunction with investor approved short sale and deed-in-lieu transactions Servicers to follow HAFA guidelines for allowable costs

12 Servicer Participation Program registration includes Standardized Agreement (homeowners are ineligible to receive KYHC benefit assistance unless their servicer has signed a Servicer Agreement ) Agreement and exhibits provide program details including:  Operational Program term sheets  Common Data File format and process  Funding agreement  Point of contact information  Compliance, data and reporting requirements Servicers to dedicate knowledgeable staff to the HHF/KHYC program – unique phone and Servicers may chose not to participate in any or all programs

List of Servicers currently participating All four KYHC Programs –CalHFA –CA Department of Veterans Affairs –GMAC –Guild Mortgage UMA/MRAP only –Chase Home Finance LLC –JP Morgan Chase Bank, NA –EMC Corporation –Wells Fargo –CitiMorgage UMA only –BAC (advanced discussions to add MRAP and PRP)

List of Servicers in process of on-boarding Navy Federal Credit Union Midland Mortgage PNC IBM LBPS Flagstar Sun Trust Outreach to more than 50 additional servicers

15 KYHC Centralized Processing Center Designed to perform the following functions: Call Center  Homeowner intake, processing and eligibility analysis  Foreclosure Prevention Counseling Processing  Eligibility determination includes Servicer interaction  Bi-directional CPC/Servicer Common Data File transfer process  KYHC Funding made directly to Servicers Compliance, data collection and reporting

16 KYHC Program Counseling The Centralized Processing Center is staffed with Program counselors that provide foreclosure prevention assistance to eligible homeowners and help determine which, if any, of the KYHC Program may be of assistance Statewide network of 37 external HUD-certified counseling agents specifically trained on the KYHC Programs. These external counselors will help the CPC provide outreach and support to eligible homeowners KYHC external counselors route eligible homeowner files directly to the CPC through a secure counselor portal for final processing

Overview of Recent Developments Full program implementation 3/7/11 Servicer outreach/onboarding continues – currently working with 53 additional servicers CalHFA, CalVET, GMAC, Guild on board for all 4 programs Innovation Fund –Three finalists under consideration –Working to satisfy Treasury requirements before finalizing

Production Homeowner Action Plans by Program Total HAP transactions (Sept 21-Mar 08) #%Reserve $Fund $ UMA %$ 14,418,000$276,489 MRAP %$ 5,370,000$232,520 PRP %$23,250,000$ 190,954 TAP %$ 70,000$ 10,000 Total1, %$43,108,000 $709,963 (1) Figures may be slightly overstated due to duplicate records. (2) Fund $ associated with 95 transactions 18

Production Ineligible Statistics by Program Total Ineligible transactions (Sept 21-Mar 08) # % UMA % MRAP % PRP % TAP % Total % (1) Excludes ineligible reasons from counseling (2) Figures slightly overstated due to duplicate records 19

Top 10 Counties 20

Moving Forward Feb 7, full Program roll out 5 major servicers on board, participating in UMA/MRAP Servicer outreach/onboarding continues – currently working with 53 additional servicers CalHFA, CalVET, GMAC, Guild on board for all 4 programs Innovation Fund –Three finalists under consideration –Working to satisfy Treasury requirements before finalizing

For more information, please visit KEEP (5337) or contact Di Richardson - 22