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This document outlines the mandatory evaluation hierarchy and solicitation requirements that servicers must adhere to when extending offers for HAFA short sales or Deed-in-Lieu options to borrowers. It details the responsibilities of servicers in obtaining necessary documentation, evaluating borrower eligibility, and calculating cash reserves. Additionally, it includes criteria for borrower occupancy, mortgage insurer approval, and the process for ordering appraisals. Compliance with these guidelines is essential for facilitating successful short sale transactions and ensuring borrower assistance.
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Borrower Solicitation and response and Servicer evaluation • Servicers must comply with the evaluation hierarchy and solicitation requirements • What the Servicer must do when extending a HAFA short sale offer to the Borrower
Borrower Solicitation and response and Servicer evaluation • If Freddie Mac approves the Borrower for a HAFA Deed-in-Lieu • What the Servicer must include in the evaluation notice
Evaluation Criteria • If a HAFA-eligible Borrower responds to the Servicer's solicitation. • If the Borrower was previously considered for HAMP.
Evaluation Criteria • The documentation • What the Servicer is not required to obtain.
Evaluation Criteria • If the Servicer must order a new credit report • If a HAFA Short Sale or Deed-in-Lieu is completed
Evaluation Criteria • There are a number of criteria required from the Borrower to be eligible for an SSA • Explained in the following slides.
Borrower Criteria • The Borrower must currently occupy the Mortgaged Premises • The Servicer must obtain a credit report from the Borrowers
Borrower Criteria • What must be submitted • What the Servicer must process
Borrower Criteria • Have Cash Reserves ,determined as follows: • Principal and interest • Monthly pro rata amount for real estate taxes, property and flood insurance • Monthly pro rata amount of homeowner's association/condominium fees • Any Escrow payment shortage amounts subject to a repayment plan
Cash Reserves • The process for calculating and verifying Cash Reserves: • 1) The Servicer must determine the Borrower's Cash Reserves • 2) If the Servicer observes interest, dividend income or gains/losses
Cash Reserves (cont) • 3) If there are inconsistencies between the Borrower's disclosure of assets and the tax return information • 4) Based on the Cash Reserves test, if the Servicer determines that the Borrower's Cash Reserves exceed the greater of $5000 or three times the monthly payment.
Mortgage Premises Criteria • The Servicer must order an interior Broker's Price Opinion (BPO) or appraisal using the 90 day "as is" marketing value from Freddie Mac's web site at https://www.bpodirect.com • The BPO or appraisal may not be more than 30 days old
Mortgage Premises Criteria • The Servicer must review the BPO or appraisal • The Borrower pay in advance for the valuation to the Servicer.
Mortgage Insurer Approval • If the Mortgage is covered by mortgage insurance
Title Criteria • The Servicer must review readily available information provided by the Borrower
Title Criteria • When the Borrower is ineligible for a HAFA Short Sale or a HAFA Deed-in-Lieu. • If the Servicer's review of the title information reveals a lien, claim, encumbrance or defect that prevents the Borrower from conveying clear, marketable title to the Mortgaged Premises
