Masters of Underwriting Smoothing out the Home Saver Underwriting Process.

Masters of Underwriting

Smoothing out the Home Saver

Underwriting Process

Mississippi Annual Affordable Housing

Conference

Home Saver Program Guidelines

Compliance

Pipeline Management

Site Visits/Audits

Here We Come to Save the Day……..

Summary of HHF Policy Guidelines

Home Saver Program Goal UnemployedUnderemployedReinstatement OnlyMortgage Assistance with Education OptionMaximum AssistanceTerms of Assistance

Unemployed

To bridge eligible applicants

across a period of

unemployment and allow them

to stay current on their

mortgage.

UNDEREMPLOYED

To bridge eligible applicants

across a period of

underemployment and allow

them to stay current on their

mortgage.

REINSTATEMENT ONLY

To bring eligible applicants

current after a brief interruption

or reduction in income.

MORTGAGE ASSISTANCE WITH EDUCATION OPTION

Applicants are eligible for an additional

twelve (12) months of assistanceIf an applicant enters an educational program that leads to a certification or degree from Regionally Accredited College, University or online degree programsIf the applicant lives in a distressed county, an additional six (6) months will be added (not to exceed the maximum assistance.

MAXIMUM ASSISTANCE

Applicants are eligible for up to

$50,000.00 of arrearage assistance

which must include a minimum of

twelve (12) months of mortgage

payments.

A cap of $50,000.00 is the maximum

amount permitted for the mortgage

assistance regardless if the education

option is included or not.

TERMS OF ASSISTANCE

Non recourse 0% interest, non-amortizing,

forgivable loan secured by a subordinate

lien on the subject property.

Forgiven over a five (5) year period at a

rate of 20% per year.

If the property is sold or refinanced prior

to the loan termination date, funds will be

recovered should sufficient equity be

available from the transaction.

ELIGIBLE APPLICANTS

UNEMPLOYED: One or more applicants

must be receiving unemployment, be

eligible to receive or must have exhausted

unemployment compensation benefits.

UNDEREMPLOYED: Applicant that can show

a reduction in income by 15% or more since

the hardship event.

REINSTATEMENT ONLY: Applicants who

have fallen behind but are now re-

employed and can now sustain the

mortgage.

ELIGIBLE APPLICANTS

REINSTATEMENT ONLY:Applicants must show that they experienced a hardship with either a 15% reduction in income or a job loss. If the hardship was a job loss the applicant must have been eligible for unemployment benefits. Mortgage debt to income ratio must be 35% or below. Applicants that are eligible for the option may not participate in any other options.

ELIGIBLE APPLICANTS

Military Deployment – Members of

the U.S. Armed Forces who have

experienced ANY drop in income due

to deployment will now be eligible for

the Home Saver Program.This applies to all personnel in regular and reserve components of the Army, Navy, Air Force, Marines & Coast Guard.

INELIGIBLE APPLICANTS

Active Bankruptcy.

Disabled & permanently unable

for full-time employment.

Loss of employment or reduction

in income due to medical reasons.

Part-time employment (unless

eligible for unemployment)


Temporary/Seasonal employment.

Permanent/intermittent work is

seasonal and does not apply (ex:

farm workers)

Contract work is not considered

permanent work and does not apply.

Death of spouse, catastrophic

medical expenses and/or divorce.


Self-inflicted financial hardship

Poor debt management

Stripping the equity from their home for

non-essential purpose

Mismanagement of their personal budget.

Home has already been foreclosed on.

Already received home saver assistance. An applicant can only apply for HHF assistance one time.


Teachers or other employees cannot

claim a hardship due to a decrease in

income from a nine-month pay cycle.

Rental income will be regarded as

investment income and cannot be

used to calculate a hardship based on

loss of income.

ELIGIBLE EXISTING MORTGAGES

Fixed rate

Fixed term

Balloon term

ARM

Fully amortizing

Unpaid principal loan balance cannot

exceed $271,000.00

Home equity line of credit – closed to future

advances

INELIGIBLE EXISTING MORTGAGES

Second Mortgage Loans

Chattel Mortgages without Deed of

Trust

Interest Only Loans

Negative Amortizing Loan

Open End Mortgage/Future Advance

Clause

Loan Held by non-participating servicer

INELIGIBLE EXISTING MORTGAGES

Seller Financed

Contract for Deed

Lease with Option to Purchase

Home Equity Line of Credit – Open to

future advances

Construction to Perm Loan – not

modified to permanent financing

Second Homes or Investment

Properties

PROPERTY TYPES

Single Family (attached or detached)

Condominium Unit

1 – 5 unit properties where the

applicant is living in one of the units

PROPERTY TYPES

Manufactured Home on a foundation

permanently affixed or real estate

owned by the borrower. Title to manufactured home must be surrendered and the manufactured home must be taxed as real property (must supply documentation to support mobile home is taxed as real property) Must have a Deed of Trust

MINIMUM ELIGIBILITY CRITERIA

Applicant must have a monthly

mortgage payment that they cannot

afford due to unemployment or at least

a 15% reduction in income.

The unpaid principal balance of first

mortgage cannot exceed $271,000.00.

Job loss had to occur on or after January

1, 2008.


Mortgage must have been made prior to

the hardship event.

Unemployed applicants must be eligible to

receive, currently receiving or have

exhausted unemployment benefits.

Self employed applicants must be able to

document a 15% reduction in income with

minimum two (2) years tax returns.


Self employed applicants must have

been self employed for a minimum of

two (2) years.

All documentation must be current and

within 60 days of approval.

Servicer must be a participating servicer

or be willing to sign up as a new

participating servicer.


Applicant must be a resident of the

State of Mississippi.

Applicant must owner occupy the home

as their primary residence.

The applicant with the hardship must be

on at least one of the following: 1) Note 2) Deed of Trust 3) Warranty Deed 4) Quit Claim Deed

REQUIRED DOCUMENTATION

REQUIRED DOCUMENTATION:

UNEMPLOYED

Copy of most recent Utility Bill

Copy of DL or Photo ID (all parties

involved)

Copy of SS Card (all parties involved)

Copy of Unemployment Benefit Letter,

(applicant may supply) However, underwriter will pull from the MDES website on each file.

REQUIRED DOCUMENTATION FOR UNEMPLOYED

Copy of most recent Mortgage

Statement (if the name of the applicant is not on the mortgage statement, you must provide one of the following additional mortgage documents which does include the applicant’s signature)

1) Note

2) Deed of Trust

3) Warranty Deed

4) Quit Claim Deed

REQUIRED DOCUMENTATION: UNDEREMPLOYED &

REINSTATEMENT ONLY

Current Mortgage Loan Statement

Copy of Original Signed Note

Copy of Original Signed Deed of Trust

Most Recent Pay Stubs (if employed)

Most Recent Two (2) Years W2’s or

1099’s

Most Recent Two (2) Years Federal

Tax Returns


REINSTATEMENT ONLY

Self Employed – Two (2) years most

recent Business and Personal Federal Tax

Returns (all schedules)

Self Employed – YTD Profit & Loss

Statement (signed by preparer)

Self Employed – Most recent Two (2)

months Business and Personal Bank

Statements


REINSTATEMENT ONLY

Current SSI Awards Letter (if applicable)

Copy of DL or Photo ID (all parties

involved)

Copy of Social Security Card (all parties

involved)

VOE’sCurrent Employment Previous Employment

ADDITIONAL DOCUMENTATION THAT

MAY BE REQUIRED

Divorce Decree or Court Ordered

Document

Quit Claim Deed (Divorce or Separation)

Doctors Release authorizing full-time

employment (Disability)

Additional Tax Returns prior to most

recent 2 years (Hardship)

Bankruptcy Discharge Papers

SOURCES OF INCOME NOT CONSIDERED IN

DETERMINING ELIGIBILITY

Foster Care

Family

Contributions

Food Stamps

Medicaid

Child Support

Veteran’s

Administration

Educational Benefits

Social

Security/Disability

Benefits

Retirement Income

MISCELLANEOUS

Bankruptcy: Bankruptcy Must be Discharged or Dismissed.

Income Limits: Does not apply.

Maximum Delinquency: MHC will allow up to 6 months prior to hardship (included within the $50,000.00 maximum assistance) to cover payments that precede the hardship event date.

COMPLIANCE

COMPLIANCE

Quarterly Reporting

Pipeline Management

Site Visits/Audits

Quarterly Reporting

Mortgage Payment Assistance

(MPA)

Mortgage Payment Assistance

Continuing Education Option

(MPACE)

Quarterly ReportingDocumentation

MHC monitors every 90 days for continued

eligibility

Documentation required to determine

continued eligibility:Copy of most recent Pay Stub

Hire date required if re-employedSelf Employed - Quarterly Profit and Loss statement Current years tax returns & W2’s (if you have not already provided them) or statement if you did not fileMDES statement, if unemployed Copy of most recent utility bill

Quarterly ReportingDocumentation

ELIGIBILITY RECERTIFICATION: The

individual who experienced the hardship

that qualified the household for Home

Saver assistance must complete the

following:Verify primary residenceVerify the homeowner is unemployed and am available for workIf employed, verify they have obtained employment

(must provide recent paystub).

Education Option

In order to maintain eligibility under the

Education Option the homeowner who

experienced the hardship must submit

required documentation that reflect

academic progress. The Academic Plan and supporting documentation must be received within 90 days after the date of your first payment. Within 180 days after the date of your first payment, a signed verification of enrollment from your school’s registrar’s office must be submitted to MHC.

Education OptionThe Homeowner who experienced the hardship

must take a minimum of 12 hours for a full-

time student or 6 hours for a graduate student

Upon the completion of each semester, an

official transcript must be submitted to MHC

from the school’s registrar’s office reporting

the progress of the most recent semester

completed.

If we do not receive these completed

documents, the homeowner is at risk losing the

additional 12 months of assistance.

Education Option Documentation

Required documents for education

option: Signed Academic Plan cover page and the completed written plan with course descriptionOfficial Verification of enrollment from your school signed by the registrar’s office Official Transcript from School showing grades from most recent semester completed

Must be requested and sent from registrar’s office to us directly. Cannot be a copy

WHAT DOES REGIONAL ACCREDITATION MEAN?

Regionally accredited institution of higher education

means a community college, college, or university

which is a candidate for accreditation or is accredited

by one of the following regional accrediting bodies: Middle States, Association of Colleges and SchoolsNew England Association of Schools and Colleges North Central Association of Colleges and Schools Northwest Commission on Colleges and Universities Southern Association of Colleges and Schools Western Association of Schools and Colleges; Accrediting Commission for Community and Junior Colleges

http://www.accjc.org/

http://www.accjc.org/

Quarterly Reporting Assistance

Please encourage clients to seek

assistance in completing the

Quarterly Report if needed.

If you assist the client in completing

the Quarterly Report, make sure that

all required documentation is

included and the report is signed.

AT RISK

If applicant is not compliant by the due date

of the quarterly review MHC will send out an

At Risk letter to applicant about possible loss

of assistance.

The applicant will have ten days to respond

and submit all missing supporting

documentation.

Documentation not received, the client’s

assistance will be terminated due to non-

compliance

Program Removal

Transition: completed the terms of their

Home Saver assistance and will be

responsible for their next mortgage

payment.

Income ineligibility – No longer considered

under employed or their mortgage is

deemed sustainable

Failure to submit required documentation

Fraud

Pipeline Management

Assign client files

Follow up with clients

Check failed applications

Remove Duplicates

Change status

Notes

Site Visits & Audits

Site visits are available for technical assistance &

training

Agency Audits A letter will be sent to the agency with the audit dateAudits will can take up to 2 days to complete depending on location and size of potential auditCompliance & Single Family reps will be present for the audit

Staff will review files based on pre-selected applicant listing generated from Counselor DirectResearch on applicant lists will be done prior to site visit to determine if the applicant file would be an eligible file

ex: applicant is still under step 1 and is not considered an actual file or it is a duplicate file

Audit findings should be completed within 30 business days from the date of audit completion.

Agency Audits

Staff will review files based on pre-selected

applicant listing generated from Counselor

Direct

Research on applicant lists will be done prior

to site visit to determine if the applicant file

would be an eligible file ex: applicant is still under step 1 and is not considered an actual file or it is a duplicate file

Audit findings should be completed within 30

business days from the date of audit

completion.

Pipeline restrictions may occur

Any Questions?

Masters of Underwriting Smoothing out the Home Saver Underwriting Process.

Documents

Transcript of Masters of Underwriting Smoothing out the Home Saver Underwriting Process.