Module 5:Module 5:Fannie & FreddieFannie & FreddieHAHAFA FA ProgramsPrograms

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Fannie & FreddieFannie & Freddie• Announced HAFA June 1, 2010

• Effective August 1, 2010

• Fannie & Freddie own the loans– Are the ultimate decision makers

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Fannie & Freddie EligibilityFannie & Freddie Eligibility• Owner Occupied, 1-4 family

• $729,750 balance (SFR)

• 1st 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)

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Payment on 1Payment on 1stst Lien Lien Exceeds 31% of Gross IncomeExceeds 31% of Gross Income

• Includes:Includes:–PITI PITI –Flood Ins., Condo Assn Fees & HOA Flood Ins., Condo Assn Fees & HOA

FeesFees

• Does not include:Does not include:–Mortgage InsuranceMortgage Insurance–Sub. lien paymentsSub. lien payments

Gross Income: Includes All Income

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Time FramesTime FramesFrom Time SSA IssuedFrom 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

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Fannie & Freddie ClosingsFannie & Freddie Closings• Servicer can’t require

sooner than 45 days from contract execution

• Can be ASAP but…

• …no later than 60 days from contract

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Fannie & Freddie Fannie & Freddie Servicer ReimbursementServicer Reimbursement

• $2,200 to servicer

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Standard DocumentsStandard 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

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Fannie Mae’s Fannie Mae’s HAHAFA FA ProgramProgram

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FNMA FNMA Additional RequirementsAdditional Requirements

• Must qualify for HAMP Modification before requesting short sale

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FNMA FNMA Additional Requirements Additional Requirements (cont’d.)(cont’d.)

• Can make payments

• Has high surplus income

• Has substantial assets– 3 x monthly payment or– $5,000 whichever is greater

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Borrower Not Eligible if:Borrower Not Eligible if:

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Substantial Asset ExamplesSubstantial 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

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Freddie Mac has same Asset Test

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Special Permission Required to Special Permission Required to Consider Borrower for HAConsider Borrower for HAFAFA

• Foreclosure sale within 60 days of short sale request

• Foreclosure proceeding could start and finish within 60 days

• Certain Florida foreclosure situations

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How Fannie Mae Determines How Fannie Mae Determines Price & MANPPrice & 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

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Commissions & 3Commissions & 3rdrd Party Fees Party Fees

• Allows commissions per listing

• May not exceed 6%

• No 3rd party fees paid by FNMA

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Listing Agent & Listing Agent & Servicer DutiesServicer Duties

• Establish list price

• Ensure marketing plan

• Monthly feedback

• Monthly comps

• Adjust price as needed

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Other FNMA Other FNMA DifferencesDifferences

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Listing Agent & Listing Agent & Servicer Duties Servicer Duties (cont’d.)(cont’d.)

• Review sale contract as to HAFA compliance

• Resolve title issues

• Provide closing instructions

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Freddie Mac Freddie Mac HAHAFAFA

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Freddie Mac HAFreddie Mac HAFAFA Details Details• Similar to Treasury’s & Fannie’s

• No Alt. RASS

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No Alt. RASS No Alt. RASS with Freddie Mac with Freddie Mac

• Sales contract received but seller not in HAMP

• B-65 (Non-HAFA) short sale

No Alt. RASS

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Required Monthly Payments Required Monthly Payments

• 31% of gross income

• Non-payment not sole grounds for termination

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The REALTOR’S® RoleThe REALTOR’S® Role

• REALTOR® knowledge & assistance critical

• Learn the programs

• HAFA extended thru 2013

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