Mortgage and Fair Housing: A Comprehensive Guide, Exams of Nursing

Download Mortgage and Fair Housing: A Comprehensive Guide and more Exams Nursing in PDF only on Docsity! HUD EXAM PREP| 120 QUESTIONS| WITH COMPLETE SOLUTIONS Guaranteed Success Rated (A+). 1. Types of Credit Used - answers>Student loan or credit cards only 2. FAKO scores - answers>purchase score which are educational score 3. Fair Credit Reporting Act FCRA - answers>what is in file/dispute/remove 30 days/remove bad 7 yrs/bk 10 yrs/access limited/damages from violators/state rights 4. Fair and Accurate Credit Transactions Act FACTA - answers>free cbrs/fraud alert/truncate cc #s 5. Fair Credit Billing Act (FCBA) - answers>dispute bill error/mail 60 days/creditor 30 days acknowledge and 90 days research. billed timely manner/14 days before payment due 6. Tax Credits - answers>Earned Income Tax Credit/EITC-low/moderate income ind/families. Net earnings from self employment-income/marital status/children. Educational credit-post seconday for ind/child. Child/Dependent Care Credit-work/look for work and paying a service. additional credits under 17yo. 7. predatory lending - answers>loan flipping-refi existing loan for more fees and interest pg. 1 8. Chap 13 bk - answers>3-5 yr payment plan on all/part of debt, can stop foreclosure, cure delinquent mortgage payments, reschedule secured debts other than mortgage, lower payment, retain house/car 9. Blockbusting - answers>convince/attempt person to sell/rent due to entry/neighborhood of race/color/religion/familia/origin/disability 10.Redlining - answers>illegal practice to make residential loans due to race, neighborhood, origin, familia, sex, color 11.Closing costs & Discount Points - answers>Closing 3-4% and Discount 1% of total loan amount 12.front end ratio / housing expense ratio - answers>monthly housing exp/gross monthly income 13.Gross Monthly Income (GMI) - answers>hourly-10/hrx35hrsx52 wks/12......wkly 750x52wksx12=.....biwkly-1000.x26/12=....semimnth- 1200.x2=...selfemploy-average gross 70587./24= 14.back-end ratio - answers>debt exp/gross debt to income ratio 15.Affordability - answers>FE/Conv 28, FHA 31, FHAEE 33, Rent 30....BE/Conv 36(45-50), FHA 43, FHAEE 45, Rent 36 16.Max Mnthly House Pymt - answers>FERxgmi BERxgmi-debts pg. 2 accessible for persons with disabilities including design of: doors, accessible routes, environmental controls, grab bars, and usable kitchens. 34.Section 504 of the Rehabilitation Act of 1973 - answers>Requires that housing providers that receive federal financial assistance make and pay for structural changes to facilities, if needed as a reasonable accommodation unless doing so poses an undue financial and administrative burden. 35.Assistant Animal - answers>An assistance animal is not a pet. An assistance animal works, provides assistance, or performs tasks for the person or provides emotional support that alleviates one or more identified symptoms or effects of a person's disability. Assistance animals do not have to be trained or certified, and are not limited to dogs. 36.Exemptions to the Fair Housing Act - answers>Single Family-1. Owns, sells, or rents the house 2. Owns 3 or fewer single family homes 3. Does not use a real-estate broker. Mrs Murphy-The house or living quarter is occupied by or intended to be occupied by no more than four independent families and the owner 2. The owner has three or fewer rental units. Religious-Housing is not operated commercially 2. Housing is made available to persons of the same religion. Private Club-The housing is not open to the public 2. The housing is incidental to the primary purpose The hosing is not operated commercially. Elderly-1. Housing is designed for the elderly 2. 100% of the community is 62 or older; or 80% of the households have one resident who is 55+ 37.Real Estate Related Transaction - answers>According to the Fair Housing Act, a real estate related transaction means any of the following: • the making or purchasing on loans or providing other financial assistance for purchasing, constructing, improving, repairing, or maintaining a dwelling pg. 5 • the making or purchasing of loans or providing other financial assistance secured by residential real-estate. 38.File a Housing Complaint - answers>HUD, Nonprofit Fair Housing Organization FHIP/Fair Housing Initiatives Program-Identify government agencies that handle complaints 39.Assist aggrieved individuals in filing a complaint 40.Conduct preliminary investigations, including sending testers to properties. State/Local FHAP-Fair Housing Assistance Program-. Many states even extend additional fair housing protections that are non-existent at the federal level, such as protecting sexual orientation, gender identity, or marital status. The Fair Housing Assistance Program provides the funding to enforce these additional fair housing protections. A person may contact an FHAP to: 41.Get help with housing discrimination 42.Funds are also used by FHAP for: 43.Capacity building, administrative costs, investigative and enforcement efforts, training, and other projects. 44.Filing a Complaint - answers>Name and contact information 45.Name and contact information of the person you are filing against 46.The address of the housing involved 47.A short description of the alleged violation 48.Date(s) of the alleged violation 49.Complaint Process - answers>Complainant: a person, group, or company that files a complaint which claims that someone has violated a law. 50.Respondent: a person against whom a fair housing complaint is filed. Respondents must be identified as a specific individual, rather than an organization or group. pg. 6 51.Conciliation: the attempted resolution of issues raised by a complainant, or by the investigation of such complaint, through informal negotiations involving the aggrieved person, the respondent, and the HUD secretary. 52.Conciliation Agreement: a written agreement setting terms for the resolution of the issues in conciliation. Complaint Process Key 53.Intake: intake specialist reviews the complaint to determine if it is a violation of the Fair Houing Act and within HUD's jurisdiction. 54.Complaint Filed: if the complaint meets filing criteria, an official complaint is filed. A notification is sent to the aggrieved person. A notification is also sent to the respondent within 10 days of the official complaint. The respondent may answer within 10 days. The complaint is then assigned for investigation. 55.If the complaint has to do with an organization funded by FHAP, HUD refers complaint to that agency to investigate and only takes further action if that agency does not begin proceedings within 30 days. 56.Complaint Rejected: if the intake specialist determines the complaint does not involve housing discrimination and is not within HUD's jurisdiction, the complaint cannot be accepted. Complaint Process Key Continued Investigation: HUD acts as a neutral third party to determine reasonable cause. HUD does the following: Interviews the complainant, respondent, and pertinent witnesses Collects relevant documents and/or conducts site visits, as appropriate May take depositions, issue subpoenas, and compel testimony or documents Continually offers and engages conciliation during the period between filing the complaint and the filing or dismissal of a charge. The investigation must be completed no later than 100 days after the filing of the complaint unless it is impractical to do so. Temporary or Preliminary Relief: If HUD concludes that irreparable harm is likely to occur, HUD may authorize prompt civil action. For example, stopping a sale. Conciliation: HUD attempts to achieve just resolution, obtain assurances that the respondent will remedy any violations, and take action to eliminate the violation. The choice to conciliate is completely voluntary. There are two types of conciliation: Pre-determination: takes place before all the evidence has been gathered in the investigation process Post-determination: takes place after the investigation has concluded, but prior to trying the issue in a court of law. Conciliation Agreement signed: if an agreement is reached, the pg. 7 disability, familial status, or national origin Pursue affirmative fair housing marketing policies in soliciting buyers and tenants, in determining their eligibility, and in concluding sales and rental transacations. PHAs and Consolidated Plan Programs: programs such as Community Development Block Grants, HOME Investment Partnerships, or Emergency Solutions Grants receive formula grants and must submit a Consolidated Plan. These programs have the following AFFH requirements: Conduct an Assessment of Fair Housing or AFH, to analyze challenges to fair housing choice and establish goals. Housing counseling agencies starting a new 3-5 year Consolidated plan cycle that begins before their due date for an AFH should continue to update their Analysis of Impediments. Take appropriate actions to overcome the effects of any impediments identified through the analysis. Maintain records reflecting these analyses and actions. Incorporate community participation in all stafes of the process from identifying barriers to proposing solutions. AFFH Rules: the new AFFH rule, published in July 2015, sets the framework for taking meaningful action to promote fair housing. The rule is: "taking meaningful action, in addition to combating discrimination, that overcome segregation and foster inclusive communities free from barriers that restrict access based on protected characteristics." Formula Grants Formula grant programs are noncompetitive awards that participating organizations that meet certain minimum requirements are entitled to receive. These grants are administered by state and local administrations. Analysis of Impediments The AI supports fair housing planning; provides essential information to policy makers, administrative staff, housing providers, lenders, and fair housing advocated; and assists in building public support for fair housing efforts. Community Participation Soliciting views and recommendations from the public, considering the views and recommendations received and developing a process to incorporate such views in decisions and outcomes. ACTION 2: Participate in metropolitan wide fair housing planning to research impediments to fair housing and create strategies to address them Collaborate with leaders of HUD-funded programs, no matter the funding or program type. Initiate metropolitan wide area fair housing planning and efforts. Develop a marketing plan that presents a strategy designed to attract all buyers and renters of all groups. Participate in local task forces or state housing pg. 10 counseling networks Work across agencies to identify potential trents, patterns, and practices Create strategies for impediments and gather data Be knowledgeable about fair housing at the state/local level and use knowledge to refer clients Gain awareness of plans and actions at the state/local level ACTION 3: Conduct marketing and outreach campaigns and maintain records Marketing and Outreach Campaigns: Provide general information about housing opportunities, conduct information campaigns, and raise awareness Identify groups of people who would benefit from the campaign Maintain records of activites which include impediments to fair housing addressed, demographic information, and the impact of such activities Examples of Marketing and Outreach Programs that Raise Awareness Educational events on fair housing rights and responsibilities Local fair housing events for advocates, renters, landlords, and real-estate professionals Informational messages on social media Cross-agency training (training that brings HUD regional offices and local offices together 60.Redlining - answers>HOLC created "residential security maps" to show which areas were safe or risky for investment. Affluent white suburbs were "blue" and deemed safe for investment and inner-city areas with minorities were "red"and deemed risky. According to Plessy v. Ferguson, this practice was legal. As a result, middle-class white citizens obtained loans that allowed them to relocate to "safe" suburbs. Meanwhile, black and brown people had difficulty obtaining loans and generally remained in decaying neighborhoods. This resulted in largely segregated housing patterns. Definition 61.the illegal practice of refusing to make residential loans or imposing more onerous terms on any loans made because of the predominant race, color, national origin, religion, sex, disability, or familial status of the residents of the neighborhood in which the property is. 62.Deed Restrictions - answers>Deed restrictions also contributed to segregated housing patterns. These are legally enforceable terms that govern the use of real estate, also known as a covenant, condition, pg. 11 restriction, or restrictive covenant. Discriminatory language was often included, denying certain groups of people use of real estate. For example, a deed written in the 1940s in Massachussets on a home that was foreclosed on in 2010 included the language, "for use of any person other than of the Caucasian race". Definition 63.Legally enforceable terms that govern the use of property. These terms are transferred with the property deed. Discriminatory deeds are illegal and unenforceable. 64.Home Buying Team - answers>Real Estate Agent/Broker, Lender/Loan officer, Underwriter-loan app/risk, Home Inspector-structure/mechanical/buyer pays. Appraiser-prop value/safety/health/buyer pays in closing costs. Closing Agent-settlement agent/title transfer/payment/can be atny/escrow agent, Ins Agent-home ins directly or escrow. Assessor-government/taxation. 65.Offer - answers>Initial offer letter, negotiations, earnest money 66.pre-approval/pre-qualification - answers>client receives pre-approval when a lender commits to lend a fixed loan amount based on a review of a completed loan application. This is not to be confused with "pre-qualified" in which a client simply discusses their financial history with no underwriter or commitment associated 67.Total Loan Costs - answers>affected by the basic interest rate plus the loan origination fees and discount points.Loan Origination Fees A charge by the lender to cover the costs of making the mortgage. Paid at closing, is often 1- 2% of mortgage amount. Discount Points Pre-paid interest paid at closing, equivalent to 1% of the loan amount. Borrower pays them to reduce the interest rate on the loan and get a lower payment pg. 12 affiliated with the lender or mortgage broker • Transfer taxes • Required services that the borrower selects from the lender's list of providers • Government recording charges Prepaid interest, property insurance premiums, and initial escrow account deposits Fees for required services that the borrower can shop for Fees for third-party services the lender does not require 74.HOEPA - Home Ownership and Equity Protection Act - answers>Federal law enforcing special disclosure requirements and restrictions on terms for loans that meet high-cost mortgage tests. Meant to address abusive practices in refinances and closed-end home equity loans with high interest rates or high fees. Regulations issued to implement the Dodd-Frank Act effective January 10, 2014, expanded HOEPA to home equity lines of credit. Also included a requirement that consumers receive homeownership counseling before a high-cost mortgage. A loan is covered by HOEPA if: APR exceeds Treasury rates for comparable securities by 6.5% for first lien transactions; 8.5% for first-lien transactions less than $50,000 and secured by personal property (e.g., RVs, houseboats, and manufactured homes titled as personal property); or 8.5% for junior lien transactions. Total fees and points payable at or before closing exceed the larger of 5% of the loan or a fixed amount adjusted annually by the CFPB. A first-time homebuyer with damaged credit learned that she could buy a home with an adjustable- rate HOEPA mortgage. She did not know what this type of mortgage was, but she was happy because she had not qualified for other loans. Several months after she bought the home with this mortgage, she noticed a large increase in her payment. She knew her payments could change, but the lender never mentioned how much they could increase. Enforced by the Federal Trade Commission, or FTC, and by the Consumer Finance Protection Bureau, or CFPB. Required Disclosures For HOEPA loans Prohibited Actions for HOEPA Loans • A written notice that the loan will not be effective until consummation or account opening occurs. • Information on the consequences of default. • A written notice warning that borrowers could lose a residence and any money invested in it if they do not make the payments. • The APR, payment amount, and loan amount. For variable rate pg. 15 loans, the lender must disclose that the rate and monthly payment may increase and the amount of the maximum monthly payment. • Negative amortization, prepayment penalties, and due-on-demand features. Balloon payments are generally banned, with specific exceptions for three circumstances: Adjusted payment schedule to accommodate seasonal income of borrower, Short-term loans (12 months or less), Creditors meet criteria for serving rural or underserved areas. • Recommending default on an existing loan to be refinanced by a high-cost mortgage. • Charging a fee to modify, defer, renew, extend, or amend a high-cost mortgage. • High late fees and pyramiding of late fees. • Fees for generation of payoff statements, with limited exceptions. • Financing points and fees (i.e., rolling them into the loan amount). However, lenders can finance closing charges excluded from the definition of points and fees, such as bona fide third-party charges. • Purposely structuring a transaction to evade HOEPA coverage. 75.homeowner insurance - answers>Structure, Loss of Use, Contents, Medical, Personal Liability-legal, Add Ons-Flood, Earthquake, Bus Mdse-home bus/products, Bus Liability-babysitting 76.Earthquake Insurance - answers>What affects the cost? Price may increase if the home is a wood frame structure, an older building, or in a high-risk area. 77.Flood Insurance - answers>high-risk flood zone by FEMA (Federal Emergency Management Agency), flood insurance is required. What is included? Covers damages from flood water that comes from outside the home. 78.maintenance plan - answers>System-Household systems include appliances, windows, roofing, insulation, electric, heating, ventilation, air conditioning (HVAC), and other components. Warranty-Home warranties pg. 16 offer protection for mechanical systems and attached appliances against unexpected repairs not covered by homeowner's insurance. Life Used-A previous homeowner or a home inspector may know or be able to estimate when the system was manufactured, installed, or purchased. Life Expectancy-Homeowners can refer to online resources to estimate life expectancy of household systems. Upkeep-Proactive. Estimated Costs- refurbish/energy efficient. Replacement-fix/replace on own or pay contractor. Target Replacement Date 79.Energy Efficient Mortgage-FHA - answers>energy.gov/energystar.gov 80.Home Improvement Financing - answers>Home Equity-A home equity loan provides a lump sum of money. It is often referred to as a second mortgage, because it can be obtained while you are still bound to your initial mortgage.Home improvement plan consists of a large one-time expense. • You desire to pay off your loan more quickly. • You want a fixed rate for your monthly payments. • You do not have funds available for significant closing costs. HOME EQ LOC-ome equity line of credit, or HELOC, is a line of credit from which you can borrow at any time during the draw period, up to your credit limit. Typically, the draw period is 10 years, and the repayment period lasts 15 years.• Home improvement plan consists of multiple expenses that may be paid over an extended period of time. • You want a lower interest rate. • You want a lengthy period of time to pay off the loan. • You do not have funds available for significant closing costs.FHA 203k FHA 203k loan is a loan insured by the FHA. It can provide you with an initial loan for purchasing a home as well as funding for home improvement.You would like to carry out a minor rehabilitation and/or home improvement project that will not require the involvement of consultants, engineers, and/or architects. • Your proposed projects meet the Streamlined 203k qualifications set forth by the FHA. • You intend to use one or more contractors to complete the repairs or can prove that you have the necessary expertise and experience to perform the work. • You can complete the project within six months. TITLE 1 -Title 1 loans, insured by pg. 17 mortgage assistance for the unemployed, and financial assistance to transition out of the home Most programs expired December 2016 89.National Mortgage settlements - answers>Created in 2012 Reached between Attorneys General of 49 states and five servicers—Ally (formerly GMAC), Bank of America, Citi, JPMorgan Chase, and Wells Fargo— that were involved in deceptive lending and foreclosure practices, like robo- signing, and were not verifying application information. Subsequent settlements were reached with SunTrust, Ocwen, and HSBC. Required servicers to appoint a single point of contact for loss mitigation efforts, have adequate trained staff, honor modification agreements made by a prior servicer, maintain better communication with borrowers, comply with the Servicemembers Civil Relief Act, improve standards for executing foreclosure documents, remove improper fees, and end dual tracking. Provided $50 billion in direct payments to signingstates and the federal government, as well as relief to distressed borrowers, though many claims deadlines have since passed. Resulted in loan modifications for struggling homeowners, refinancing for underwater homeowners, and payouts for homeowners who lost their homes. Many states used the funds received to create their own programs for homeowners facing foreclosure 90.Mass Atny Gen HomeCorps Prog - answers>Created with NMS funds paid to Massachusetts to create foreclosure mitigation programs. This led to the creation of the HomeCorps program with the goal of mitigating future impacts of the foreclosure by providing advocacy to distressed borrowers. The program has established a hotline staffed by loan modification experts and created a Twitter account to provide information, and it also launched a series of housing grant initiatives including funding for legal representation and identification of neighborhoods hardest hit by foreclosure. Examples are: 1. Borrower Representation Initiative: Massachusetts Legal Assistance Corporation (MLAC) and the National Consumer Law Center (NCLC) were awarded $6 million to fund 14 locations statewide staffed by 19 attorneys dedicated to foreclosure-related cases and delivered direct legal pg. 20 representation to homeowners facing foreclosure or eviction. 2. Loan Modification Initiative: Staffed by a statewide team of skilled Loan Modification Specialists, the Initiative offers direct loan modification advocacy to distressed Massachusetts borrowers, in order to help many residents avoid unnecessary foreclosure. 3. Distressed Properties Identification and Revitalization Grant: Provided 21 towns funding to identify and prioritize a list of real estate owned properties and to ensure that individual property owners comply with state and local ordinances to bring properties into a state of good repair. 91.Mort Serv Guidelines - answers>Servicer Contact & Personnel-Servicer must make efforts to contact the borrower after 36 days of delinquency. • Servicer must send borrower written notice to contact the servicer before 45 days of delinquency and provide information about housing counselors. Subsequent mortgage statements must include: information on risks of delinquency, updates about any foreclosure proceedings, contact information for housing counseling agencies, information about loss mitigation programs. • Servicers must assign personnel to be available to help delinquent borrowers. These employees must provide accurate information about loss mitigation or workout options and explain how a borrower can apply, locate information about and communicate the status of a loss mitigation application. • Servicers must notify borrowers promptly and in writing that a loss mitigation application is complete. 92.Mort Svc Guidelines - answers>Foreclosure Timeline Restrictions-Servicers cannot make a first notice or filing for foreclosure until the borrower is more than 120 days delinquent. • After 120 days, servicers cannot begin the foreclosure process while a borrower is being evaluated for a loss mitigation plan. For completed loss mitigation applications, additional restrictions and timelines apply for required evaluation and appeal periods. pg. 21 93.Mort Svc Guidelines - answers>Servicer Eval & Expectations-• Servicers must be able to tell homeowners the circumstances under which the servicer may make a referral to foreclosure. • Servicers are required to evaluate the borrower for all the foreclosure avoidance options for which the borrower may qualify, though they are not required to offer any specific loss mitigation options. • Servicers must give specific reasons for denying a loan modification option. 94.Mort Serv Guidelines - answers>Consumer Complaints-Consumers should call (855) 411-2372 (CFPB) or visit www.consumerfinance.gov/complaint. Regardless of which foreclosure process a state utilizes, under CFPB regulations, servicers cannot initiate foreclosure proceedings until borrowers have received proper notice about delinquency and have been provided sufficient time to pursue foreclosure alternative options, a period not less than 120 days. Even after 120 days, servicers cannot begin foreclosure if any options are still under consideration. 95.Mort Svc Guidelines - answers>For FHA borrowers determined to be at risk for default, telephone contact attempts must begin by day 10. For other FHA borrowers, servicers must begin telephone contact attempts by day 17. Written communications for all borrowers must begin by day 20. 96.Non-Judicial Foreclosure - answers>The courts are not involved, communication occurs between the homeowner and the servicer or the servicer's representative In most states, the servicer issues a Notice of Default, or NOD. Though the timeline on this notice previously varied widely by state, CFPB guidelines specify that this notice can only take place after 120 days of delinquency. If the delinquency is not cured, the homeowner receives a Notice of Sale, or NOS, typically 90 days after the NOD. The NOS gives the homeowner a certain number of days before the house will be sold, which varies by state. The homeowner typically has five to ten days before the sale date to cure the delinquency (i.e., pay all past pg. 22 these tips: • Check with your state's Housing Finance Agency, Department of Community Affairs, Attorney General's Office, or Housing Department to obtain information on available state programs. • Communicate with local housing departments who may have similar programs that offer less financial support but have less stringent qualifications. • Gather information about programs offered by servicers in your area from individual financial institutions, roundtables, or information sessions. 110. Home Affordable Modification Program (HAMP) - answers>Purpose: To assist homeowners who are struggling to make mortgage payments Benefit: Lowered mortgage payments to make them more affordable and sustainable in the long-term Status: Expired Next Phase: Most HAMP modifications offered greatly reduced interest rates for five years, then increased the interest rate at one percent or less for three or four years, though rates were not to exceed the market rate. Some homeowners with a HAMP modification may need help handling higher mortgage payments due to the reset of the interest rate after five years. 111. Fan Mae/Fred Mac Flex Mod - answers>Overview: The Flex Modification leverages Fannie Mae and Freddie Mac Standard and Streamlined Modifications. Modifications can be applied to all mortgage loan delinquencies and to mortgage loans determined to be in imminent default. Purpose: To provide an easier, flexible way of helping more borrowers qualify for a loan modification in a changing housing environment Benefit: Provides eligible borrowers an option to resolve delinquency and sustain homeownership by targeting a 20% payment reduction. Key Eligibility: Borrower must: Be 60 days or more delinquent and occupy the property as a primary resident or Be current or less than 60 days delinquent, occupy the property as a primary resident, and be in imminent default AND Submit a Borrower Response Package (BRS), which includes: Completed and signed Form 710, Uniform Borrower Assistance Form, Eligible hardship documentation, Documentation to verify stable income to support a monthly payment, Imminent default hardship pg. 25 documentation, for borrowers less than 60 days delinquent Restrictions based on: Mortgage loan: Must be owned by Fannie Mae or Freddie Mac to qualify for respective program, must have originated at least 12 months prior to loan modification request, must not have been modified three or more times previously, regardless of the loan modification program or dates or prior modifications Primary residence: If investment property, must be more than 60 days delinquent *Streamlined eligibility exceptions may apply to certain borrowers. No borrower documentation is required for borrowers 90 days delinquent or more. Status: Mandatory evaluation effective October 1, 2017 112. Loss Mitigation Docs - answers>Monthly mortgage statement • Information about other mortgages on the home, if applicable • Two most recent pay stubs for all household members contributing toward the mortgage payment • Last two years of tax returns • The most recent quarterly or year-to-date profit and loss statement, if self employed • Information about savings and other assets • Documentation of income from other sources, such as alimony, child support, social security, etc. • Two most recent bank statements • A utility bill showing homeowner name and property address • Unemployment insurance letter, if applicable • Account balances and minimum monthly payments due on all credit cards • A letter describing any circumstances that caused reduced income or increased expenses, such as job loss, divorce, illness, etc. (not always required but often useful) 113. Req for Mort Assist RMA form - answers>Components of the form: 1. Borrower information 2. Hardship Affidavit 3. Principal Resident Information 4. Combined Income/Expenses for Borrower(s) 5. Other Properties Owned 6. Dodd-Frank Certification 7. Information for Government Monitoring (optional) 8. Acknowledgement and Agreement This form is a modified version of the original RMA form from the MHA program and may vary from servicer to servicer. 4506T-This one-page form gives the servicer permission to look at the borrower's most recent tax returns. pg. 26 114. HLP Hope Loan Port/FHA Loss Miti - answers>LP, formerly known as Hope LoanPort®, was launched during the foreclosure crisis to facilitate transparency, accessibility, consistency of treatment, and a superior experience to consumers and their advocates in pursuit of foreclosure alternatives and affordable home loans in underserved markets. It has become a major vehicle for the submission of loan workout packages, and most servicers and counseling agencies utilize it. It is supported by government agencies, as well as financial institutions and the housing counseling industry. Counseling agencies can only gain access if they are a 501(c)(3) and HUD-approved. Each counseling agency using HLP has at least one person responsible for access for the entire agency and who manages access for its staff. 115. HLP Features - answers>Www.hlp.org On HLP you can begin a new case, search for an existing case, track where a case is in the process and receive messages from and send messages to servicer representatives. You can save a case and then finish it later. You can find the case in the Dashboard tab or by searching for it on the Case Search tab. Cases are tracked in HLP's Case Status system, which you can access from the top of every page when a case is open. A case's status is not just an indicator of where that particular case is in terms of processing; it also defines which party, the counselor or servicer, is currently in control of the case's processing. Additional training: www.training.hlp.org 116. Submit foreclosure app on HLP - answers>Create the case on the New Case tab. 2. Complete entry of basic homeowner data on the Financial, Q&A, and Documents navigation tabs. 3. Use the Review & Submit tab to verify that all the required elements have been completed before submitting the application. Servicers must update the case status every 10 days when they are in control of the case. If they haven't, there is an escalation process. Counselors are encouraged to update cases every 10 pg. 27 and provide an amount to cover: arrearages, legal fees and foreclosure costs, principal deferment Selecting a Loss Mitigation Program Varies on the program chosen, but for example, if the client is trying to qualify for the Informal/Formal Forbearance program through FHA, you will need to calculate using the following formula to see if they qualify: 85% of surplus income must be sufficient to bring the mortgage current within 6 months 121. REPORT SCAMS - answers>Calling the Homeowner's Hope Hotline at 1-888-995-HOPE (4673). 2. Visiting PreventLoanScam.org. 3. Calling the Federal Trade Commission (FTC) at 1-877-FTC-HELP (1-877-382-4357). 4. Calling the state's Attorney General office. 5. Calling the HUD Office of the Inspector General Hotline at 1-800-347-3735 since Jose has a FHA mortgage 122. Foreclosure - answers>A legal process in which mortgaged property is sold to pay the loan of the defaulting borrower. Foreclosure laws are based on the statutes of each state. 123. Short Sale - answers>Also called a preforeclosure sale, a short sale is a procedure in which a borrower sells a property for an amount less than the outstanding mortgage balance to avoid a foreclosure. Basically, the mortgage company allows the homeowner to sell the house for an amount that falls "short" of the amount still owed. Except in certain states or by agreement between homeowner and servicer, the sale does not necessarily satisfy the borrower's debt and may result in a deficiency judgment. 124. Deed in Lieu - answers>A process that allows a homeowner to avoid foreclosure by providing a deed "in lieu" of foreclosure to the lender. The homeowner gives the title back and effectively transfers ownership to the mortgage company. Except in certain states or by agreement between homeowner and servicer, the sale does not necessarily satisfy the borrower's debt and may result in a deficiency judgment. Though it helps to pg. 30 avoid foreclosure, the process does not allow the homeowner to stay in the home. 125. Reduce Fin Burden of Foreclosure - answers>Will receive financial assistance that can be used for relocation costs or other expenses. • May receive tax relief from paying taxes on the bank's losses in the foreclosure. Visit IRS.gov and search for "Forgiven Mortgage Debt" for more information about availability. • Can request that the option for a deficiency judgment be removed. 126. Trans from Homeownership - answers>Conv-The processes for short sale and deed-in-lieu vary and do not have a fixed timeline. FHA-Lenders intiate foreclosure once an FHA loan has been in default for 6 mos, so FHA pre-foreclosure sale and deed-in-lieu consideration must begin before foreclosure can begin. FHA pre-foreclosure allows 120 days for the sale and establishes a minimum sales amount. If an offer cannot be secured, a deed- in-lieu can be requested. If the home is unaffordable and the owner can prove it, a deed-in-lieu can sometimes be requested without a short sale. STEPS-Determine servicer options based on type of mortgage. 2.apply for desired option and trans assist. 3.budget. 4.new housing before sale date 5.pack 6.move into new place. 7.improve credit 8.long term to buy home down the road. 127. GSE Mort Disposition - answers>The available short sale and deed-in- lieu options, which share some common elements, may be good for a borrower that is: ineligible to refinance or modify the mortgage, facing long-term hardship that qualifies under specific program criteria, behind on mortgage payments, or in some cases, at risk of falling behind in the near future, owes more on the home than it's worth, also known as an "underwater" mortgage, can no longer afford the home and is ready to leave Benefits: eliminate or reduce mortgage debt: avoid the negative impact of foreclosure, repair credit sooner than with a foreclosure, reduce pg. 31 time before eligibility to purchase a home again (in as few as two years, whereas foreclosure is seven), be eligible for up to $3,000 in relocation assistance in some cases. (In certain states, relocation assistance for a deed- in-lieu may be as high as $7,000 for Freddie Mac mortgages and $10,000 for Fannie Mae mortgages.) 128. Fan Mae/Fred Mac - answers>Short Sale-Purpose: Allows a homeowner to sell the home for less than the balance owed, though a financial contribution, or a deficiency judgment, may apply depending on the situation. Process: Typically, a homeowner considering a short sale has tried to sell the home but was unable to sell at a price that covers the mortgage balance. A short sale may take up to 120 days. It is similar to a normal real estate sales transaction, though the mortgage company will work with the borrower and real estate agent on steps from setting the price to finalizing the sale. Elgibility-Borrower has an eligible hardship Sale is an arm's length transaction (buyer and seller have no relationship to each other) Borrower previously listed home for sale with a licensed real estate broker according to specific criteria Borrower did not enter a program or arrangement where a third party takes the property title and arranges a short sale in exchange for a fee If borrower is current on mortgage or has been delinquent for less than 31 days, borrower must: Occupy home as primary residence Have a monthly DTI ratio greater than 55% 129. Fan Mae/Fred Mac - answers>Deed in Lieu-Purpose: Allows a borrower who cannot afford the mortgage payments to voluntarily sign the house back over to the lender. Process: Typically, a homeowner seeking a deed-in-lieu does not want or has not been able to sell the home. Homeowners will often attempt a short sale first. A mortgage release usually takes about 90 days. Borrower qualifications determines the next steps, and qualified homeowners may be eligible for flexible exit options Immediately vacate home Stay in home for up to 3 months (no rent) Lease home at a market-based monthly rent for up to a year Elgibility-Servicer complied with the evaluation hierarchy Borrower has an eligible hardship pg. 32 stops paying rent. The second is a Holdover Eviction, when the landlord is evicting someone who breaches terms of the lease unrelated to payment. 148. Eviction Process Step 1 Notice to Tenant - answers>The landlord, or someone appointed by the landlord, delivers a written or oral notice that includes: the reason for the eviction, steps the tenant can take, and the number of days in which the tenant must cure the issue or move out. Can also be called: Late Letter, Notice to Vacate Letter, Notice to Quit, Eviction Notice Letter, Notice of Termination, Rental Eviction Notice, or Notice to Vacate (the Premises) Timeline for Different Notice Types: 1. Pay rent or quit notice: Three to five days 2. Cure or quit notice: Immediately to 30 days 3. Unconditional quit notice: Immediately to 30 days In some cases, tenants are not given the option to resolve the issue and remain in the property. Though they may have various associated timetables, tenants must vacate after certain offenses, such as: selling illegal substances on the premises, presenting inaccurate information about criminal record, criminal activity, or prior evictions, repeating the same lease violation within six months. Possible Client Actions: take steps to cure the violation, vacate voluntarily, deny the problem and escalate. *In nonpayment cases, if a landlord accepts rent from a tenant at any time, the eviction process legally ends. 149. Eviction Process Step 2 Notice of Petition - answers>A landlord can file an unlawful detainer complaint if the tenant has not paid rent or cured the violation of the lease by the end of the period outlined in the notice to the tenant. This prompts the court to serve the tenant a notice of petition. The court serves the tenant a notice of petition, which includes: the reason for the eviction, a request for an "answer", a due date for the answer, request for the tenant's presence in court, a court date, and information on the consequences of not appearing in court. *In most cases, the answer must be returned to the Clerk of the Housing Court as an oral or written response within five days with any documentation to support the response. Possible Client Actions: take steps to cure the violation, submit an answer to the court (use legal aid if necessary) pg. 35 150. Eviction Process Step 3 Court Hearing - answers>5-12 days after the Notice of Petition is served, the court hearing commences. The hearings include a resolution component and a trial component. In the resolution component, the landlord and tenant discuss possible agreements. If a resolution is not reached, the trial phase will commence. If they do not reach an agreement during resolution, the case goes before a judge who issues a final judgement. Possible Client Actions: appear in court and bring any written communication, lease and renewal lease, proof of rent payment, and/or photographs of problems in the unit. It is also advisable to come to an agreement, as if any further issues arise the court can extend deadlines. *Appearing in court is not a good idea as a judgement will immediately be placed on the tenant's record and filing fees are added to the judgement which can raise it significantly. 151. Eviction Process Step 4 Final Judgment - answers>If an agreement is not reached in the court hearing, within 5 days a judge will issue a final judgement. The tenant must pay the judgment or cure the violation of the lease if the judge decides the client is at fault. Tenants may also choose to appeal during this period. 152. Possible Client Actions: abide by the final judgement or appeal the judgement. Those who do not pay rent or cure the violation within five days of the final judgement will be evicted. 153. Eviction Process Step 5 Eviction - answers>If the tenant does not respond to the final judgment during the appeal period, the landlord can file to issue a writ of possession, authorizing the removal of a tenant and his/ her belongings from the rental unit. A copy of the writ of possession, which includes the date and time after which the eviction can take place, must be delivered to the tenant at least 72 hours before the eviction. After the 72-hour period, the landlord has two eviction options: 154. Lock Change Eviction: The landlord changes the lock on the unit but allows the tenant 24 hours of access to the unit to remove his/her pg. 36 possessions. Any possessions remaining after that period become the landlord's property. 155. Forcible Eviction: A law enforcement officer executes the eviction, forcibly removing the tenant and his/her belongings if necessary. 156. Possible Client Actions: remove personal belongings, contact a housing counselor to arrange post-eviction housing. 157. Writ of Possession - answers>A court order that serves as an eviction from a property. The writ outlines the specific time a person has to vacate the property before authorizing an official to forcibly remove a person and his/her belongings from a property. 158. Legal Aid Programs - answers>Housing counselors cannot offer legal advice. Legal aid programs offer low-cost or free advice, services, or ongoing legal representation to disadvantaged individuals. Typically, legal aid programs limit their services to residents of, or individuals with legal issues arising in, certain counties or cities. Service is also normally limited to areas of civil (non-criminal) law, which includes tenant-landlord issues. 159. Information on legal aid programs can be found by searching "Legal Aid" on HUD.gov 160. Local Emergency Shelter - answers>Shelters that offer temporary housing and services to those in immediate need. Each program has different eligibility requirements and some may require a portion of income. Often the maximum time the client can stay does not exceed 90 days 161. Transitional Shelter - answers>These shelters offer housing and support to individuals who are ready to leave emergency shelters but still need assistance transitioning to independence. Many transitional shelters only accept residents who have already participated in a short-term pg. 37