1. Module 5: Fannie & Freddie HAFA Programs 65 5-1

2. Fannie & Freddie Announced HAFA June 1, 2010 Effective August 1, 2010 Fannie & Freddie own the loans –Are the ultimate decision makers 65 5-2

3. Fannie & Freddie Eligibility Owner Occupied, 1-4 family $729,750 balance (SFR) 1 st position loans Originated pre 1-1-09 Payment exceeds 31% of gross income Hardship Delinquent or default reasonably foreseeable (Freddie requires borrower be more than 60 days delinquent) 65 5-3

4. Payment on 1 st Lien Exceeds 31% of Gross Income Includes: Includes: – PITI – Flood Ins., Condo Assn Fees & HOA Fees Does not include: Does not include: – Mortgage Insurance – Sub. lien payments Gross Income: Includes All Income 65-66 5-4

5. Time Frames From Time SSA Issued SSA returned within 14 days 120 days marketing period –Freddie requires minimum 15 days notice for extensions RASS & contract returned within 3 Biz days Approval or denial within 10 days 66 5-5

6. Fannie & Freddie Closings Servicer can’t require sooner than 45 days from contract execution Can be ASAP but… …no later than 60 days from contract 66 5-5

7. Fannie & Freddie Servicer Reimbursement $2,200 to servicer 67 5-7

8. Standard Documents SSA –Fannie has different order –Some significant differences RASS –Same as Treasury’s Alt. RASS –Same as Treasury’s but… –None for Freddie Mac 67 5-8

9. Fannie Mae’s HAFA Program 67 5-9

10. Fannie Mae HAFA Details Guiding document –SVC-2010-07 Loans held by Fannie –Some use Fannie HAFA –Others use US Treasury HAFA Bottom line: –Determine if loan owned by Fannie Mae –Servicer will determine appropriate program 67-68 5-10

11. Special Permission Required to Consider Borrower for HAFA Special Permission Required to Consider Borrower for HAFA Foreclosure sale within 60 days of short sale request Foreclosure proceeding could start and finish within 60 days Certain Florida foreclosure situations 68 5-11

12. Borrower’s Financial Condition Can make payments Has high surplus income Has substantial assets –3 x monthly payment or –$5,000 whichever is greater 69 Not Eligible if: 5-12

13. Substantial Asset Examples Substantial Asset Examples Payment: $1,500 x 3 = $4,500 Liquid assets can’t exceed $5,000 Payment: $2,200 x 3 = $6,600 Liquid assets can’t exceed $6,600 69 Freddie Mac has same Asset Test 5-13

14. Fannie Mae SSA 70 5-14

15. Fannie Mae SSA (Form 184) Fannie Mae SSA (Form 184) Similar to Treasury SSA Information re-ordered Some significant differences 70 5-15

16. Fannie Mae SSA Deed-in-Lieu Fannie Mae SSA Deed-in-Lieu Fannie’s Deed for Lease (D4L) DIL to Fannie Fannie leases back to borrower Low rent for 6 months 70 5-16

17. Fannie Mae SSA Page 3: List Price Fannie Mae SSA Page 3: List Price Treasury SSA Treasury SSA List price only. No MANP disclosed. List price or Acceptable Sales Proceeds 70 5-17

18. How Fannie Mae Determines Price & MANP Recent BPO Approved Fannie Mae vendor List price based on MANP MANP –Minimum Acceptable Net Proceeds –Not disclosed to seller or broker –Cannot be increased after SSA executed 71 5-18

19. Commissions & 3 rd Party Fees Commission can’t exceed 6% No 3 rd. Party negotiator fees 71 5-19

20. Listing Agent & Servicer Duties Establish list price Ensure marketing plan Monthly feedback Monthly comps Adjust price as needed 72 Other FNMA Differences 5-20

21. Listing Agent & Servicer Duties (cont’d.) Review sale contract as to HAFA compliance Resolve title issues Provide closing instructions Review HUD-1 within 48 hours of closing (servicer) Ensure sales proceeds received on timely basis (servicer) 72-73 5-21

22. Freddie Mac HAFA 73 5-22

23. Freddie Mac HAFA Details Guiding document –Bulletin 2010-12 –Seller/Servicer Guide Chapter D65 Similar to Treasury’s & Fannie’s No Alt. RASS 73 5-22

24. No Alt. RASS with Freddie Mac Sales contract received but seller not in HAMP B-65 (Non-HAFA) short sale No Alt. RASS 74 5-24

25. Required Monthly Payments 31% of gross income Non-payment not sole grounds for termination 74 5-25

26. The REALTOR’S® Role REALTOR® knowledge & assistance critical Learn the programs HAFA extends thru 2012 74-75 5-26