New HAMP guidelines

[Justcharlotte]

I just got off the phone with Greetree and once again they told me that I was not eligible (rental)..I faxed them the government Hamp web page. Now they tell me they just found out there will be a tier one Hamp program for rentals taking effect July 21, 2012. I am so glad I pointed it out to them. I was born last night~ (not)

[gintn]

I have the same problem, they declined mine as well. The same rep told me to check back after 45-50 days. It seems it is taking time for them to update their systems with new program.

[Cat Damiano]

Hi Justcharlotte,



If you are faxing them the guidelines for Non GSE mortgages, those changes would not apply to your loan if it is backed by Fannie Mae. However, Fannie Mae has a traditional modification available for rental properties that meet the following requirements;

The Fannie Mae standard modification is designed to help those borrowers who are ineligible for the Fannie Mae HAMP, or who defaulted on a Fannie Mae HAMP modification or under certain circumstances, another Fannie Mae modification.

ELIGIBLE:

Borrower previously received and defaulted on either a Fannie Mae HAMP modification (or Fannie Mae HAMP Trial Period Plan) or a Fannie Mae standard modification (as defined prior to October 1, 2011)

Property may be owner-occupied or non-owner occupied

Property may be vacant as long as it is not condemned

Borrower must have a financial hardship (documented in the Uniform Borrower Assistance Form (UBAF), Form 710 – See the Servicing Guide for detailed guidance)

Loan must have been originated at least 12 months prior to the loan modification evaluation date

Borrower must have verified income (unemployment benefits are not an acceptable source), documented in accordance with the UBAF

The pre-modification mark-to-market loan-to-value (MTMLTV) ratio must be greater than or equal to 80%


INELIGIBLE:

Borrower previously received a Fannie Mae modification other than a HAMP or a standard modification (as defined prior to October 1, 2011)

and became 60 or more days delinquent within 12 months of the modification effective date

The loan is secured by a non-owner occupied property and is current or less than 60 days delinquent

Fannie Mae will consider exceptions to the above eligibility criteria only when there are extenuating circumstances. You must submit a request to Fannie Mae for review if you believe a modification is appropriate.
*Borrowers requesting a modification who are current or less than 60 days delinquent must be evaluated for imminent default using Freddie Mac’s Imminent Default Indicator™ (IDI), accessed through Fannie Mae’s HomeSaver Solutions® Network (HSSN), if the property securing the mortgage loan is owner-occupied.

[Justcharlotte]

Thanks so much Cat and I will pay attention...and reread
I paid 250K in 2006 50 K down plus costs...
balance 186K
Have not paid since last Aug 2011
rent does not cover payment
I feel lender was predatory , she assured me that the insurance required by the bank would be reevaluated (4 grand)Not happening..
I could use all the help I can get. Rental---rented for 900.00 payment is 1650. I will go to Fannie Mae site...thank you~ Aloha...C

[Cat Damiano]

Well if you meet the eligibility that I posted for the Fannie Mae traditional modification, then you should be able to have the rental modified. You should contact Fannie Mae directly.

Fannie Mae can be reached at
1-800-732-6643

[DaniNJ]

Hi Cat,

Thanks for all the info. I applied for HAMP mod on my rental, but was offered a Fannie Mae traditional modification instead.

I am somewhat reluctant to pay the trial payments without any idea of the terms of the modification. The paperwork I received indicates "if your loan is modified, we will waive all unpaid late charges." But it also states past due amounts as permitted by my loan docs can be added to my balance. Do you know how this is typically handled?

Also, do you know if the 2nd leinholder has to agree to the terms of the Fannie Mae traditional modification? My 2nd lein was sold to Greentree, and I doubt they will agree to anything unless I pay them off -- they have already caused an attempted short sale and DIL to crash.

I welcome any thoughts from those of you with more experience!

[Cat Damiano]

Hi Cat,

Thanks for all the info. I applied for HAMP mod on my rental, but was offered a Fannie Mae traditional modification instead.

I am somewhat reluctant to pay the trial payments without any idea of the terms of the modification. The paperwork I received indicates "if your loan is modified, we will waive all unpaid late charges." But it also states past due amounts as permitted by my loan docs can be added to my balance. Do you know how this is typically handled?

Also, do you know if the 2nd leinholder has to agree to the terms of the Fannie Mae traditional modification? My 2nd lein was sold to Greentree, and I doubt they will agree to anything unless I pay them off -- they have already caused an attempted short sale and DIL to crash.

I welcome any thoughts from those of you with more experience!

The reason that you were offered the Fannie Mae Standard Modification would be because that loan was not able to be approved for the HAMP modification due to it being a Fannie Mae loan and a rental. Fannie Mae loans are not eligible for the HAMP Tier 2 expansion for the rental properties. As far as the second lien goes, with the modification they would most likely need to re-subordinate which you can check with the lender if they are able to take care of that.

Here are the guidelines on how the payments are determined.

Capitalize the arrearage.

Acceptable arrearage: accrued interest, out-of-pocket escrow advances to third parties, and any required escrow advances that will be paid to third parties by the servicer during the Trial Period Plan and servicing advances paid to third parties in the ordinary course of business and not retained by the servicer, if allowed by state law.

Late fees may not be capitalized and must be waived if the borrower satisfies all conditions of the Trial Period Plan.

If applicable state law prohibits capitalization of past-due interest or any other amount, the servicer must collect such funds from the borrower over a period not exceeding 60 months unless the borrower decides to pay the amount upfront.


Set the interest rate to a fixed-rate mortgage (fixed-rate may be subsequently adjusted from time to time for new modifications based on market conditions and communicated by Fannie Mae).

Extend the term to 480 months from the modification effective date.

For loans with a pre-modification MTMLTV ratio greater than 115%, forbear the principal in an amount that is the lesser of:

an amount that would create a post modified MTMLTV ratio of 115% using the interest bearing principal balance, or

30% of the gross post-modified unpaid principal balance (UPB) of the mortgage loan, including capitalization of arrearages.
Servicers must stop forbearing principal once the modified interest-bearing UPB results in a 115% MTMLTV ratio or the amount of forbearance equals 30% of the post-modification UPB, whichever is first. Interest will not accrue on the deferred principal. Deferred principal is payable upon maturity of the mortgage loan modification, sale or transfer of the property, or refinance.

After calculation of the modified payment terms is completed, the mortgage loan must meet the following conditions:

Monthly Housing Expense-to-Income Ratio must be greater than or equal to 10% and less than or equal to 55%. (See Announcement SVC-2011-08R or the Servicing Guide for details on calculating the housing expense-to-income ratio for specific property types).

Modification must result in a principal and interest (P&I) reduction of at least 10% from the current contractual monthly P&I payment.

A three-month Trial Period Plan is required for borrowers whose loan is in default and a four-month Trial Period Plan is required for imminent default borrowers.

The borrower must remain current under the terms of the Trial Period Plan and be current at the end of the Trial Period Plan in order to receive a permanent modification. “Current” is defined as the borrower having made each required Trial Period Plan payment by the last day of the month in which it is due. A borrower who fails to make the Trial Period Plan payments on a timely basis is considered to have failed the Trial Period Plan and is not eligible for a permanent mortgage modification.

[Cat Damiano]

Hi Cat,

Thanks for all the info. I applied for HAMP mod on my rental, but was offered a Fannie Mae traditional modification instead.

I am somewhat reluctant to pay the trial payments without any idea of the terms of the modification. The paperwork I received indicates "if your loan is modified, we will waive all unpaid late charges." But it also states past due amounts as permitted by my loan docs can be added to my balance. Do you know how this is typically handled?

Also, do you know if the 2nd leinholder has to agree to the terms of the Fannie Mae traditional modification? My 2nd lein was sold to Greentree, and I doubt they will agree to anything unless I pay them off -- they have already caused an attempted short sale and DIL to crash.

I welcome any thoughts from those of you with more experience!

The trial payments are normally very close to what the permanent modified payments will be. You can also get a good idea from the steps I posted for the Fannie Mae standard modification. Without being eligible for HAMP, this may be the only program available on the rental for retaining the property. Once you go through the trial plan, the permanent modification will outline the actual terms using your current loan information.

[DaniNJ]

Hello,

Wanted to post an update that my modification went through. The modified payments are exactly the same as the trial payments, and I had no problems re the 2nd lein (which is still underwater). The arrearage did add shocking sum to my balance -- but, since the market seems to be looking up in my area, I'm figuring this is a better alternative than losing the property and facing a deficiency judgement.

Thanks for all of the input!

[Cat Damiano]

Hello,

Wanted to post an update that my modification went through. The modified payments are exactly the same as the trial payments, and I had no problems re the 2nd lein (which is still underwater). The arrearage did add shocking sum to my balance -- but, since the market seems to be looking up in my area, I'm figuring this is a better alternative than losing the property and facing a deficiency judgement.

Thanks for all of the input!

That is great news Dani, Congratulations!! I am so glad that the modification worked out for you.