HARP, HAMP, HAFA, and FHFA
Camron Hoorfar, J.D. LL.M.
Law Office of Camron Hoorfar, P.C.
The topics that we are going to talk about are the five governmental programs listed:
-History of Making Home Affordable Program.
-Home Affordable Refinance Program (HARP).
-Home Affordable Modification Program (HAMP) Tiers 1 and 2.
-Home Affordable Foreclosure Alternatives (HAFA).
-Federal Housing Finance Agency (FHFA) Streamlined Modifications.
If you are at all interested in any of these five programs, you may want to pay attention because we are going to go over the small differences between the programs, each of their backgrounds, their original rules and regulations, and their updates.
Making Home Affordable Program
The first government program I want to go over may be the most notorious. The Making Home Affordable Program was first launched in February 2009 by the Obama Administration to try and assist struggling homeowners avoid foreclosure and to strengthen the housing market.
Many people believe that the Making Home Affordable Program is just one program that the government has created to force mortgage lenders to assist homeowners who are behind in their mortgages. But, that is not really the case. Instead, the Making Home Affordable Program is made up of four smaller programs designed to assist homeowners with their mortgages. Some of the benefits that the four programs within the Making Home Affordable Program provide are mortgage modifications, mortgage refinancing, short sales, deed-in-lieu of foreclosures, temporary forbearances, and assisted transitioning out of homeownership.
There are a lot of critics of the Making Home Affordable Programs, but since its inception the Obama Administration has stated that over 1.3 million households have benefited by the Making Home Affordable Program. In order to assist those homeowners avoid foreclosure and provide foreclosure alternatives, the U.S. government has committed up to $45.6 billion under TARP.
When going through the four main programs that make up the Making Home Affordable Program, we will list significant dates that involve important updates to each of the programs. But in general, there are a few dates that everyone should be aware of. In early 2012, the Obama Administration announced that the Making Home Affordable Program would be enhanced to increase the number of eligible borrowers to the programs. On May 30, 2013, the deadlines to apply for assistance under the programs were extended to December 31, 2015.
For those of you who can’t wait for me to go through all of the programs and who want a jump start on the information going to be covered tonight, you can find some really good, basic information about each of the programs at www.MakingHomeAffordable.gov.
The first of the four programs that I am going to generally cover is the Home Affordable Refinance Program, also known as HARP. For purposes of this presentation today, I will mostly be using the acronyms for each of these four programs, because using their full names can get quite tedious.
The basic purpose of HARP is to assist homeowners who are not behind on their mortgages and who are unable to obtain traditional financing. Traditional financing may be unobtainable to borrowers for an array of reasons, but the most common in today’s market would be the decline of home values.
It is important to note that borrowers are still able to receive benefits under HARP because the program’s deadline to apply for its benefits is December 31, 2015.
If you have dealt with troubled borrowers in your practice, you may already know that borrowers are under the impression that they can receive the benefits of HARP and stop any foreclosure that may be pending by simply asking the government to qualify for HARP. If you have come across this, then you already know that while the government created HARP, it has not made participation in the program mandatory for mortgage servicers. I find myself having to explain this to borrowers all day, every day in my own practice and people cannot seem to grasp this point. For that reason, I believe it bears repeating. Participation by mortgage servicers, meaning lending institutions, is not required. Mortgage servicers can choose not to offer borrowers the benefits that HARP has to offer.
Another misconception that I find myself educating borrowers about is how a borrower actually applies for the HARP benefits. Many borrowers believe that there is an official form on the Making Home Affordable Program’s website that they can fill out and send in to their mortgage servicer in order to force the mortgage servicer to extend the HARP benefits to them. While it is true that the Making Home Affordable Program’s website consists of guidelines, sample forms, and other useful tools designed to assist a borrower with what a mortgage servicer may require in order to apply for HARP benefits. It is not true that there is a uniform, standard application for that every borrower must complete. Instead, in order to apply for assistance under HARP, borrowers must contact their mortgage servicers and apply directly through them.
So we just talked about the basics of HARP and what it allows people to do. But let’s talk about what qualifications a borrower has to meet in order to be able to refinance their home under HARP. There are a few general requirements that a borrower must meet in order to qualify under HARP, and we will go through these shortly. However, we will discuss some additional requirements and changes that have occurred due to some updates of HARP.
There are five basic requirements that a borrower must satisfy in order to qualify under HARP. The first requirement is that the borrower’s mortgage must be backed by Freddie Mac or Fannie Mae. In order to determine if a mortgage is backed by Freddie Mac or Fannie Mae, a borrower can go to the website of Freddie Mac or Fannie Mae and use the Loan Lookup Tool. If the borrower does not have access to internet or is not tech-savvy, another way for the borrower to check on if their mortgage is backed by Freddie or Fannie is to simply contact the mortgage servicer directly and ask. Many borrowers overlook this very simple, direct way of determining if their mortgage is backed by Freddie or Fannie. However, to save you and borrowers some time, I will tell you that borrowers who are purchasing a home through seller-financing almost never have a mortgage backed by Freddie Mac or Fannie Mae. This is because the mortgage is held by the seller of the home, usually an individual, and the borrower or the seller almost never involve a bank or other lending institution in the purchase of the home. Instead, usually the individual seller becomes the lending institution, and that type of loan is never backed by Freddie Mac or Fannie Mae.
The second requirement is that the borrower’s mortgage must have been sold to Freddie Mac or Fannie Mae on or before May 31, 2009. This is usually determined at the same time the borrower determines whether or not their loan is even backed by Freddie or Fannie. If the loan is not backed by Freddie or Fannie, it’s game over for the borrower under HARP. However, if the loan is backed by Freddie or Fannie, the borrower should be able to determine with relative ease when their loan was sold to Freddie or Fannie. Again, a borrower can determine the date their loan was sold by using the Loan Lookup Tool on Freddie or Fannie’s website, or by contacting the mortgage servicer directly and asking when the loan was sold to Freddie or Fannie.
The third requirement is that the borrower cannot have previously obtained a refinance under HARP. You may be asking yourself, well how can a borrower have received the benefits under HARP already when I am just now finding out about this program? Well remember, borrowers have been able to obtain the refinancing benefits under HARP since 2009. It is quite possible that a borrower has already received a refinancing through HARP but wants to try it again. In fact, it’s not only quite possible but highly likely. Many practitioners will tell you that it is often the case that a borrower that finds themselves in mortgage trouble at one time finds it very difficult to get out of that trouble. This means that it is very likely that you may have a client one day that received a HARP refinance, fell on hard times again, and wants to use HARP to dig themselves back out, like they had before. If that happens, the borrower will not be eligible for another HARP refinance. However, that does not mean that all is lost for the borrower as you will see when we discuss the three other programs.
There is also a small exception to this third requirement, and that is the reason you see an asterisk on the slide up above. It is possible for a borrower to receive a second or even third HARP refinance, but the borrower’s previous HARP refinance must have been through Fannie Mae under HARP between March and May 2009. This exception does not apply to HARP refinances outside of March to May 2009. Also, this exception also does not apply to HARP refinances through Freddie Mac. Now I am not sure why this exception exists, but it does. It may not come up too often in your career, but I wanted to mention it because there is one tiny exception to the third requirement.
The fourth requirement is that the borrower must be current on the mortgage at the time of the refinance and have a good payment history with the mortgage servicer. HARP defines a good payment history as being on time and paying the mortgage payment in full for the prior six months and at least eleven out of the most recent twelve months. Now you may be thinking this requirement is backwards. You may be thinking that if a borrower is current on their mortgage, then they obviously are not in mortgage trouble and do not need the assistance under HARP. Well, you are right and you are wrong. While the borrower is not in bad shape because they are current on their mortgage, the borrower may not be in good shape either. The value of the borrower’s home may have dropped significantly due to the market or the numerous foreclosures in the borrower’s neighborhood. The borrower may be currently employed, but has been informed by their employer that layoffs are expected and that their employment days are numbered. Or, the borrower could have recently received a grim medical diagnosis that will make the borrower’s ability to earn income very difficult. There are many reasons why a borrower may be current on their mortgage, but still need assistance. In those situations, the borrower could refinance their home under HARP and potentially lower their monthly mortgage payment, thereby freeing up some much-needed cash.
The fifth requirement is that the borrower’s mortgage cannot be a jumbo mortgage or a mortgage through the FHA, USDA, or VA. If you are not familiar with jumbo mortgages, a jumbo mortgage is essentially a high credit quality mortgage, but it is for an amount that is above the conventional loan limits. For most states, a jumbo loan encompasses a mortgage over $417,000. So if you have a mortgage for over $417,000, congratulations, you are rich and you don’t need HARP. It may seem odd that FHA, USDA, and VA borrowers also do not qualify for HARP. This is not because the government views these types of loans for only the rich. These types of loans are excluded because each of these agencies have their own, tailored versions of HARP that a borrower can apply for directly through each of these agencies.
There is a sixth and final requirement for HARP, but do not pay too close of attention to it because it is outdated and no longer a requirement. However, the original HARP rules stated that a borrower’s current loan-to-value ratio must be greater than 80%. If you are not familiar with loan-to-value ratios, this is the ratio of a borrower’s mortgage compared to the value of the home. This 80% requirement meant that only borrowers with a mortgage balance over 80% of their home’s value would be eligible for HARP. It was originally thought that this requirement would exclude HARP to only those borrowers who were under-water with their homes or close to it.
Now that we have put HARP to bed, let’s move on to the second of the four programs under the Making Home Affordable Program, which is HAMP. HAMP stands for the Home Affordable Modification Program.
So what is the point of HAMP when we have HARP? Well, HARP is for borrowers who wish to refinance their property. HAMP is for borrowers who are behind on their house payments and who want to lower their mortgage payments in order to make them more affordable and sustainable. An easy way to look at it is that HARP is for borrowers who are current on their mortgage. HAMP is for borrowers who are behind on their mortgage.
Now we know what HAMP does generally, but let’s get some basics down.
Just like the deadline for HARP, the deadline to apply for HAMP benefits is December 31, 2015. And just like under HARP, lenders are not required to participate in HAMP. In fact, just like under HARP, a borrower applies for HAMP assistance by contacting their mortgage servicer or lender directly. But that is where the similarity between HARP and HAMP end. So let’s discuss how a borrower qualifies for HAMP assistance and what the requirements entail.
There are six requirements that a borrower must satisfy in order to receive HAMP assistance. The first requirement is that the mortgage must have been obtained by the borrower on or before January 1, 2009. This is not the same deadline as HARP, so please keep that in mind.
The second requirement is that the property cannot be condemned. This is a very simple, yet important requirement to HAMP eligibility.
The third requirement is that the borrower has sufficient, documented income to support the modified mortgage payment. For this requirement, the borrower is going to most likely be required to submit W-2s, 1099s, paystubs, tax returns, and bank statements to prove their income level. This is probably the hardest requirement to satisfy for borrowers. This is the requirement that involves the most documentation, the most headache, and the most negotiation with the lender.
The fourth requirement is that the borrower has a financial hardship. This does not simply mean that the borrower cannot buy all the things that they want to. This means that the borrower is either delinquent on their mortgage or in danger of falling behind on their mortgage.
The fifth requirement out of the six is that the borrower cannot have been convicted in the last ten years of felony larceny, theft, fraud, forgery, money laundering, tax evasion, or pretty much any other crime that involves money, mortgages, or real estate transactions.
The sixth requirement to receive HAMP assistance is that the borrower must owe less than $729,751 on their primary residence or single unit rental property. Yes, this means that HAMP assistance is not strictly limited to primary residences, but this was not always the case. However, this number increases with the amount of units on a property. For a three unit property, the borrower must owe less than $1,129,251. For a four unit property, the borrower must owe less than $1,403,401.
Now I realize that I just told you that there were six requirements for HAMP eligibility, but I want to tell you about a hidden requirement that is not often discussed. The hidden requirements for HAMP assistance is that the modification of the mortgage must be beneficial for the lender. The technical version of this requirement is that the net present value for the lender must be positive after the modification. The simpler version of this requirement is that the modification of the mortgage must be more beneficial to the lender than to foreclose on the loan.
If you need more information about these requirements, a great source to check out are the HAMP handbooks, sample agreements, calculators, and other guidance on the government’s website. If you need that website, it’s www.makinghomeaffordable.gov.
HAMP Tier 2
Just like HARP, there is an update to the HAMP rules, and this update is known as HAMP Tier 2. Let’s talk about a few of these updates and changes and then we will roll into some hot topics of HAMP 2.0.
The first change under HAMP Tier 2 is the extension of the deadline to apply for assistance under HAMP. The old deadline was December 31, 2013. The new deadline is December 31, 2015. But remember that this is the deadline to apply for assistance. It is possible for a borrower to apply for assistance before the deadline, but actually receive a reduction of their mortgage payments under HAMP after the deadline.
The second change under HAMP Tier 2 is the forgiveness of borrowers who failed under the old HAMP. Borrowers who applied for and received benefits under the previous version of HAMP, but who failed out of the program because they defaulted on their payments or lost good standing with the lender, have been forgiven under HAMP Tier 2. This means that they can apply for the assistance all over again. But the forgiveness does not stop there. HAMP Tier 2 also forgives borrowers who could not receive assistance under the old HAMP because they did not meet the old requirements or they did not meet the debt-to-income ratio. Under the old HAMP, a borrower’s mortgage was reduced so that the entire mortgage payment, including principal, interest, taxes, insurance, and association fees, was equal to 31% of the borrower’s gross monthly income. But if the borrower could still not afford the mortgage payment, even after the reduction to the 31% level, the borrower would not qualify for HAMP and would fail the program. So, if a borrower failed the old HAMP, HAMP Tier 2 forgives them and allows them to try again. Now, you may be wondering why I placed an asterisk on the slide next to the word forgive. I did this so I could point out that HAMP Tier 2 allows the borrower to try for assistance another time under the new rules. It does not, however, allow the borrower to pick up where they left off before their default and continue on with their original modification. The borrower will need to restart the entire process and re-apply for their assistance. But, the borrower must wait at least 12 months from their default or have a change in circumstances before applying for assistance again.
Another change under HAMP Tier 2 is that borrowers can request HAMP assistance for properties other than their primary residences. Borrowers can now apply for assistance under HAMP for rental properties that are occupied or are available for rent year round. However, if your borrower has a vacation home or has an investment property that is occasionally rented out when the borrower is not there, the borrower will not be eligible for HAMP assistance.
The last change under HAMP Tier 2 that I want to discuss is the removal of the one-time restriction. Under the old HAMP, a borrower could only modify one loan and the loan had to be on their principal residence. Under HAMP Tier 2, a borrower can modify up to three different loans or mortgages.
The next requirement does not come up very often, but it is important to note for those real estate companies that you may have as clients. Companies and partnerships can experience the same financial troubles that individual borrowers can experience, and so there may be a time where a real estate company needs some assistance with their mortgage payments. Unfortunately for them, they will not receive any assistance through HAMP because HAMP assistance is limited to actual individuals, not companies or partnerships.
But, another good thing about the HAMP Tier 2 update is that a HAMP modification allows a borrower to extend a mortgage term to 480 months, or 40 years. This type of extension on the term of the mortgage can result in a substantial reduction in mortgage payment amounts to borrowers.
While the mortgage term extension I just mentioned is a big benefit, the biggest benefit provided by the HAMP Tier 2 program is the mortgage reduction that is allows borrowers to obtain. Under the old HAMP, borrowers were given a reduction of their mortgage payment to 31% of their gross monthly income. For some borrowers, this meant a small and unhelpful reduction in their mortgage payment. However, under HAMP Tier 2, a borrower’s mortgage payment must drop by a minimum of 10%. This means that if the borrower qualifies, they are guaranteed to see at least a 10% savings.
Not only is the borrower given a guaranteed savings amount, the borrower is not stuck receiving the same, static 31% payment ratio that every other borrower is given. Instead, each borrower’s individual circumstances determine their post-modified payment amount, which must be within 25% to 42% of their debt-to-income ratio. This means that a borrower’s mortgage payment after a HAMP modification will be somewhere between 25% and 42% of the borrower’s gross monthly income. Now you may be saying to yourself, well that doesn’t sound very good. Under the old system a borrower was guaranteed a 31% ratio, but under the Tier 2 system a borrower could get a much higher 42% ratio. But don’t forget about the guaranteed 10% savings reduction that the borrower will experience under Tier 2, which the borrower never had under the old system.
Not only can the borrower receive significant savings in their monthly mortgage payment, but the borrower can also reduce the principal amount owed or receive a principal forbearance if their market-to-market loan-to-value is greater than 115%. This is fantastic news for the borrower because it means that under HAMP Tier 2, the borrower can actually have some of their principal mortgage amount completely erased.
Going back to one of my earlier comments about HAMP where I mentioned that a mortgage servicer is not required to participate in HAMP. But there is a small exception to that rule. If the mortgage servicer’s net present value is positive, meaning it is more beneficial for the lender to provide a modification of the loan instead of foreclosing, the lender is required to provide the HAMP Tier 2 assistance.
Well, what happens if the net present value is negative and the borrower is declined for HAMP assistance? In that instance, the borrower must receive a declination letter from the lender stating the reason or reasons why the borrower was denied for HAMP assistance and inform the borrower why the net present value for the lender was negative. In addition to stating their declination reasons, the lender must consider the borrower for other loss mitigation options, including the programs we are discussing today. But, a declination is not a death sentence for the borrower. Just like HARP, a borrower can shop around to other mortgage servicers to find a lender that will approve them for HAMP assistance.
One last significant improvement to HAMP under the Tier 2 program is that the availability of the HAMP benefits have been expanded to further assist military and other service-members by expanding the definition of a financial hardship. This means that a service-member’s permanent change of station order is considered a financial hardship when attempting to qualify a borrower for HAMP assistance. This means that a service-member can be treated as having a financial hardship, regardless of whether the service-member’s income actually decreases. However, the service-member cannot use their permanent change of station order to count as a financial hardship if the service-member intends on returning to that home at some point in the future or the service-member has sufficient liquid assets to continue to make the mortgage payments.
The third program under the Making Home Affordable Program is HAFA, or the Home Affordable Foreclosure Alternative. Just to recap, in case you zoned out during the first two programs we have covered or you just need a refresher, HARP is for borrowers who are current on their loans who want to refinance their mortgage. HAMP is for borrowers who are behind or close to being behind on their mortgage payments and who want to modify their payments to a lower amount.
HAFA is a little different from the two programs we have already discussed. HARP and HAMP are designed to keep the borrower in their home. HAFA, on the other hand, is designed to allow the borrower to have a smooth, simple exit from the home. The HAFA program essentially provides borrowers with the ability to receive a short sale or a deed-in-lieu instead of having to go through an actual foreclosure. For those of you who do not know, a short sale is when the borrower finds a buyer for the property, the selling price is not enough to cover the full amount of the mortgage, and the lender is asked to waive the amount of the loan that is not paid off by the buyer’s purchase price. A deed-in-lieu is when a borrower hands over the title and keys to the property back to the lender in exchange for the lender waiving their ability to chase after the borrower for any deficiency that may have occurred if a foreclosure had happened.
Well, you may be thinking, why is there a government program that assists people in walking away from their homes? What is the benefit to the people? Well, for starters, under the HAFA program the borrower is guaranteed that any deficiency will be waived. This means that when the borrower returns the property to the lender, the lender can never chase, go after, or try to collect on any money that may have been owed under the mortgage for that same property.
Not only is any deficiency waived, but the borrower usually experiences a lesser negative effect on their credit rating than a foreclosure or conventional short sale. The reason for the lesser negative effect is because the easier a borrower makes it for a lender to take back their property, the less a lender is likely to punish the borrower for defaulting and causing the lender grief.
But it is important to remember, as with all of the programs we have discussed thus far, HAFA expires on December 31, 2015.
Alright, so now you are convinced that HAFA has some benefits that borrowers may want to take advantage of. So how do they qualify?
HAFA has five requirements, and some of them should sound familiar to you. First, the borrower must have a documented financial Alright, so now you are convinced that HAFA has some benefits that borrowers may want to take advantage of. So how do they qualify?
HAFA has five requirements, and some of them should sound familiar to you. First, the borrower must have a documented financial hardship. If the borrower cannot show to the lender that they are unable to afford the mortgage anymore, the lender has no incentive to assist the borrower.
Second, the borrower cannot have purchased a new home within the last 12 months. This requirement places a little responsibility on a borrower by essentially saying that you cannot have a financial hardship if some time in the last 12 months a borrower had the finances or the resources to obtain real estate.
Third, the first mortgage on the property must be less than $729,751. For most borrowers, especially in Kansas and Missouri, this should not be a problem.
Fourth, the mortgage must have been obtained on or before January 1, 2009.
Lastly, and I am sure this one has to sound familiar to you by now, the borrower cannot have been convicted in the last ten years of felony larceny, theft, fraud, forgery, money laundering, tax evasion, or pretty much any other crime that involves money, mortgages, or real estate transactions.
The Second Lien Modification Program, or HAFA 2MP for short, allows a primary lienholder to pay up to $8,500 to a junior lienholder in order to have the junior lien removed from the property.
Why would the primary lienholder do this? They are first in line, what do they care about someone who is second to them? The reason behind this additional junior lienholder payoff is to allow borrowers with two or more mortgages to still receive the same HAFA benefits of a short sale or a deed-in-lieu without a junior lienholder refusing to release their lien and gumming up the works.
The tricky part is that the junior lienholder must remove their lien from the property for the $8,500 or less payment. This means that regardless of whether the junior lienholder is paid in full or not, they must agree to remove their lien for the $8,500 or less. While this may be difficult to accomplish, it’s not impossible.
But let’s talk about two other requirements that a borrower must satisfy before they can receive assistance from HAFA 2MP. The second requirement is that the borrower cannot have been convicted in the last ten years of felony larceny, theft, fraud, forgery, money laundering, tax evasion, or pretty much any other crime that involves money, mortgages, or real estate transactions.
The third requirement is that the borrower cannot have defaulted on their HAMP trial modification payments if they had one. I know this may seem contrary to the forgiving nature of HAFA, but in order for a borrower to receive the additional HAFA 2MP benefits and have a junior lienholder removed, they cannot have messed up or defaulted under HAMP.
The fourth program under Making Home Affordable that I would like to speak about, but this isn’t the last program we will discuss, is the Home Affordable Unemployment Program, or UP for short.
UP is a program that allows unemployed borrowers to receive up to a 12 month forbearance of their mortgage payments from their lender. This means that a borrower who is unemployed could live in their home 12 months, mortgage free, while they look for employment. Now it’s not really free, the borrower usually ends up paying the mortgage payments that they missed at the end of the note. However, it does provide some temporary relief while a borrower may be down on their luck.
But it is important to note that this program cannot be used forever. The UP mortgage payment forbearance only lasts until the sooner of 12 months or when the borrower finds employment.
So how does a borrower qualify for the UP assistance?
First, a borrower must be unemployed. This means that the borrower is eligible for unemployment benefits. This usually equates to the borrower not being fired for just cause or having additional employment where they earn additional income.
Second, the borrower must occupy the property as their primary residence. The UP benefits cannot be used for rental or investment properties.
Third, the borrower cannot have previously received a HAMP modification, Tier 1 or Tier 2.
Fourth, the borrower must have obtained their mortgage on or before January 1, 2009.
Lastly, the borrower’s total amount owed on their home is less than $729,751.
UP Tier 2
UP Tier 2 makes it a little easier for borrowers to receive UP assistance.
First, UP Tier 2 assistance is now available for borrowers who have rental properties or investment properties. The UP assistance is no longer restricted to primary residences only.
Second, UP assistance is available even if the borrower failed a HAMP modification.
Third, borrowers are to receive a full forbearance on their mortgage payments and not simply a reduction of their mortgage payment to 31% of their previous income before they became unemployed.
Lastly, lenders are no longer allowed to use the borrower’s monthly mortgage payment ratio as one of the criteria to evaluate the borrower for UP eligibility.
The fifth and final program that I want to discuss does not fall under the Making Home Affordable Program. Instead, the Streamlined Modification Initiative falls under the Federal Housing Finance Agency, also known as the FHFA.
The Streamlined Modification Initiative, which I will refer to as FHFA for today, is meant to be a simplified loan modification initiative to assist borrowers to avoid foreclosure and to stay in their homes. But unlike HAMP, the FHFA method is supposed to be a quicker and easier method of obtaining a mortgage modification.
This program started on July 1, 2013, and unlike the four previous other programs mentioned today, ends on December 30, 2015, not December 31, 2015. Why they chose to be different, it sets them apart.
The FHFA program is supposed to be a quicker and easier method of obtaining a mortgage modification, rather than going through HAMP, because a borrower has much fewer requirements to satisfy in order to get an FHFA modification.
In order to qualify for an FHFA modification, a borrower must be somewhere between 90 days, that’s 3 months, and 720 days, two years, delinquent. At this point, some of you may be saying “Good lord, can someone really be 2 years behind on their mortgage and not have a foreclosure against them?” While it may be rare, this year I assisted a client of mine who had been 9 years delinquent. Stop and think about that for a second.
The second requirement for an FHFA modification is that the borrower’s first mortgage must be at least 12 months old.
The third requirement is that the borrower’s loan-to-value ratio must be greater than or equal to 80%.
The last two requirements for FHFA assistance is that the loan must be guaranteed or owned by Fannie Mae or Freddie Mac, similar to the HARP requirement, and the borrower’s loan cannot have been modified more than two times.
If you are in Kansas or Missouri and have any questions or want to find out more information about something we went over, feel free to set up a consultation or shoot me an email.
Camron Hoorfar, J.D. LL.M.
Law Office of Camron Hoorfar, P.C.
The topics that we talk about are the five governmental programs: History of Making Home Affordable Program, Home Affordable Refinance Program (HARP), Home Affordable Modification Program (HAMP) Tiers 1 and 2, Home Affordable Foreclosure Alternatives (HAFA), and Federal Housing Finance Agency (FHFA) Streamlined Modifications. If you are at all interested in any of these five programs, we are going to go over the small differences between the programs, each of their backgrounds, their original rules and regulations, and their updates.