DC and Shortening the Short Sale

''Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly, and applying the wrong remedies.''
-Groucho Marx

I would venture to guess that many know of my affinity for politics. In what other system can one apply the passion I have for the mortgage industry, the power to be a real world Monday morning quarterback in support of your "team" and most importantly, be inundated with an endless amount of humor put forth each day? When these factors are combined, it makes my annual "lobbying" trip such a highlight that I am riled for months to come.

When home from the District "Bubble," I always felt as if I have been given a secret pass to view images of our industry's future, like Dorothy after she looked into the Wicked Witch of the West's crystal ball. Similarly, upon my return to "Kansas" to report where I have been I am often greeted with Auntie Em's cynicism. The assurance from many is that what I have seen was just a bad dream.

Unfortunately, a dream it is not. Without industry leaders dedicated to the education of the men "behind the curtain," we would be ruled by those whose main purpose is to be re-elected. My husband and I led a team of 16 (our biggest group ever) to meet with our Arizona delegates on Capitol Hill last week. The forced smiles and unrepentant glad-handing that accompanied most election seasons was in full bloom and we were greeted again with "Why won't the banks lend? There are so many programs and incentives offered from the government, why are things not fixed?"

Oh, if I had the great powers of OZ, I would sit them in a chair, tie their hands behind their backs and duct-tape their mouths shut so we could force them to listen, not speak, to understand the complications of our market when the government and politicos try to "fix" things. Instead, our group championed the message to restore certainty in real estate finance and to avoid the raid of the real estate "piggy-bank."

Investment does not like uncertainty. With everything the government has done to "help", it has created more volatility with the private capital markets as they must weigh the political and regulatory risk that they cannot control into their investment strategy. We watch the global economy to see its effect on our markets, just like the world investment communities watch us as Dodd-Frank created untold regulatory authority without oversight. Our group explained that although the market has seen the highest quality of loans made in the previous few years, additional regulations that have no merit to "quality" such as QRM and QM requirements as well as repurchase requests that lenders have received from Fannie Mae and Freddie Mac years after they are originated, often on PERFORMING loans, the lenders are overly fearful of the origination of anything but a perfect loan.

Finally, we addressed the constant double-speak of politicians observed over the last few months. With the budget in a dismal mess, our elected officials have robbed Peter to pay for Paul. Only this time, Peter was the housing market...the same housing market that is intended to play a major role in the financial recovery. The threat of the loss of the mortgage interest deduction for homeownership is detrimental to this recovery and long-term economic growth. But nowhere is the contradiction more evident than the "tax imposed on homeownership" known as the Guarantee Fee Increase that required the GSE's (Fannie and Freddie) sustainability for the next 10 years for a short term fix of a 2 month payroll tax extension. We just shook our heads over that one.

As is the case every year, I am reminded of the real-time exhilaration and fervor that comes from the view of our future unveiled in front of us. Months and sometimes years before the news hits Main Street, we are able to see history made. Last year, it was the release of the suggested QRM requirements and this year it is all about a national servicing standard. Landmark revelations were made about these standards that will impact the foreclosure and foreclosure alternative market as well as the long anticipated release of the federal short-sale requirements and foreclosure speed.

Washington DC, to a passionate political junkie like me, remains to be an enigma. Its bright lights, the conundrum of good versus evil and its dramatic history always seems to lure me in, like an addict in need of a "fix". However, outside of claws of the District, I once again found myself saying "there's no place like home."

I hope you have a great week and please let me know if I can be of assistance to you or your clients.
Amy

Guidance Provided by Fannie Mae to Shorten Preforeclosure Time Lines
Shorten the Short Sale!

While I was in Washington DC, the Federal Housing Finance Agency (FHFA) directed Fannie Mae and Freddie Mac to develop enhanced and coordinated strategies to facilitate short sales, deeds-in-lieu and deeds-for-lease in order to help more homeowners avoid foreclosure. Today, Fannie Mae introduced its policies to expedite this process.

Per FNMA's announcement, servicers must follow the policies for all conventional mortgage loans held in Fannie Mae's portfolio, those securitized into Fannie Mae MBS pools, and those originally sold as a part of an MBS pool. These policies require Fannie Mae to establish maximum required response times for short sale offers submitted, require servicers to provide borrowers with status updates during this evaluation process, and allow servicers to respond to short sale offers without the requirement to evaluate a HAMP modification.

In March, Fannie also announced that in an effort to maintain a streamlined and efficient process, servicers must receive a complete "Borrower Response Package" to evaluate the borrower for foreclosure prevention alternatives. Fannie warns that the servicer should not request other documentation from the borrower, except in specific limited situations. This package consists of:

• A completed Uniform Borrower Assistance Form (Form 710),
• Income documentation as outlined in Form 710 based on income type,
• Hardship documentation as outlined in Form 710 based on hardship type, and
• A Short Form Request for Individual Tax Return Transcript (IRS Form 4506T-EZ) or a Request for Transcript of Tax Return (IRS Form 4506-T) signed by the borrower.

Additionally, Fannie Mae is reminded servicers that federal income tax returns must not be requested from the borrower unless the borrower is self-employed or the borrower has rental income, as outlined in Form 710.

Fannie now states that when a servicer receives a "Borrower Response Package" it must adhere to the following response timelines.

• If the servicer is unable to fully evaluate the borrower for a Fannie Mae HAFA short sale within 30 calendar days of receipt of a complete Borrower Response Package, the servicer must notify the borrower that the request is under review.
• Each week, the servicer must provide the borrower a status update indicating the reason(s) why the Evaluation Notice is pending. Status updates may verbal or in writing and must be documented.
• The servicer must send the Evaluation Notice no later than 60 days after receipt of the complete Borrower Response Package.
• If a revised offer is received in response to a counteroffer, the servicer must provide a response within 10 business days.
• If the offer does not meet or exceed the Minimum Acceptable Net Proceeds (MANP), the servicer must provide a counteroffer with the denial. The MANP must not be disclosed to interested parties to the transaction.
• The servicer must request a response to the counteroffer within five business days.
• If the revised offer does not meet the MANP but merits further consideration, the servicer must submit a request to Fannie Mae for review and decision within 10 business days after receipt.

But what happens if the servicer does not comply? Fannie Mae may pursue any of its available remedies which include, repurchase, "make whole," or indemnification. You can read more about the specifics to these changes HERE. To see exactly what is required in the Borrower Response Package CLICK HERE.

Ha Ha
A man tells his doctor, "Doc, help me. I'm addicted to Twitter!"

The doctor replies, "Sorry, I don't follow you ..."

It's Over

I recently read that "spinning doesn't make you dizzy...stopping does." How often I watched my 11 year old spin her younger, 2 year old sister around as they laughed at the stumbles they endured while they regained their balance. I'm sure you know that feeling. You go so fast that the continuation of the spinning motion is instinctual. But, when you slow down, you find that gravity gets to you. You bobble, you try to regain your footing and sometimes you might even tumble to the ground. An interesting thing that I learned from watching this routine with my kids is that as they struggle to keep their balance, it is inevitable that they reach out for support, to hold on to something that will help them avoid the possible fall.

This year I feel that I did my share of spinning. It began that very first day when I was told by the radiologist that "they had distinct concerns about my mammogram and ultrasound," my head, as they say, started to spin. The whirlwind of those first two weeks was filled with endless doctor's appointments, tests, scans, results and finally the official diagnosis of Stage 3A breast cancer. The spiral continued throughout chemotherapy, with its poisonous results that broke down my body and sometimes my psyche in order to attack the cellular level of the cancer. The surgery followed and physically changed me forever. It was an event that also tried my threshold for pain. Finally, the cumulative effects of radiation tested my willpower to endure small amounts of irritation that compounded into extreme volumes of physical discomfort. Yes, I have been spinning for almost 11 months.

A couple of weeks ago, I finished my required 7 weeks of daily radiation treatments. After my final round of radiation at Arizona Breast Cancer Specialists I sat in my car and felt a wave of emotion that can only be described as dizziness. Clinically, the war, my fight with cancer...was over. I had crossed the threshold from present to past tense. I didn't expect, however, to feel so unsteadied and a lack of balance on such a momentous day, I don't mean physically, but mentally. I could not believe the treatment was finally over. I guess I felt like I had stopped spinning.

PJ was out of town, so I took my girls for a celebratory dinner. I arrived home to find my sweet Elli had made me a surprise "end of radiation" cake. She had cleaned and gussied up both she and her sister and was ready for our celebration. I told her it felt so strange to know it was over. In fact, once we sat down for our teppanyaki dinner at Benihana, the waitress asked each of the patrons at the table if anyone was there for a celebration of anything. I could not help it but say, "Why YES I AM!" and proceeded to explain the importance of that day. Let me tell you, if I still drank, I would guarantee that I would have received free drinks all night from all those around me who heard the story. Everyone wanted to help us celebrate. Throughout the evening I also received many texts and emails from PJ and so many others with kind words of support. This support was what helped me regain my balance. It was a great night.

Later, after the girls were asleep, I laid in bed and could not help but reflect on this incredible time of my life. I realized there really was no way to adequately describe the dichotomy of cancer. It was a terrible, horrible experience. If the disease did not kill you, there were times that I thought and sometimes hoped that the treatments would. Yet, when I think back, I would not want to give up the encounters that I have had because of cancer for anything. It was hard to believe what I had learned about myself, what I had learned about others and just how much I had learned about life. That night, I reread many of my posts, my journal entries and retraced this road in my head. I giggled a little as I recognized that so much of what I needed to know in life...I learned from having cancer.

I must not have listened in Kindergarten, because according to Robert Fulgrum I should have learned it all then, but I didn't. I liked to consider myself a "late bloomer." It took a whole life of experiences followed by the climax of cancer for me to recognize what I needed to know. A list formed in my head as I thought about the events of the past year. How could I have been so oblivious to the basic lessons of life that cancer taught me?

Cancer gave me the opportunity to learn that...
• Life is not fair, but fair is subjective.
• There is no "hell" in HEALTH.
• No matter how bad you have it, look around because someone else has it worse.
• You better like what's on the inside because all the things you may be confident about on the outside could be gone in a heartbeat.
• Service is a two-way street, you better learn how to give and receive.
• No one survives nor succeeds alone.
• Fear and Faith cannot exist in the same space.
• Survival like success is not an event, it is a process.
• Be careful what you teach your children, because they are learning from you even when you're not looking.

It was last May when I first wrote you as my valued business partner, industry peer, customer and friend. I told you that I loved the power of words. I said that some words defined lives and some words changed lives. I was determined not to be defined by the "C" word. My life was NOT going to be centered on fighting breast cancer; fighting breast cancer was just going to be another facet of my life. I know that cancer got in a few good blows throughout this fight, but I also know that it didn't define me. I can say without question, however, that cancer changed me.

One of the best compliments that I received from a friend early on was that when he heard that I had been diagnosed with cancer, he told me he started to tear up. But then he said he thought about it and really started to feel bad for cancer. He said, "Cancer didn't know who it was dealing with."

I kept this comment with me as a reminder that I was strong. Now, after all that I have learned, I feel that I can relate more to this statement, "You would think after everything you put me through, you think I would despise you. But, in the end I want to thank you, because you have made me that much stronger." (Lyrics of "The Fighter" Who knew Christina Aguilera was so astute! Ha Ha!)

My "spinning" stopped, maybe not forever but for the time being. I have had a chance to get my bearings and gain a little balance. Just as my kids reached out to try to keep them from falling, I reached out to you and the support that I received was overwhelming. Thank you, Don. Thank you for your help this past year, for your phone calls, emails, texts and prayers. I wish I could aptly express my gratitude.

Now I am ready to take 2012 by storm. I am back, eager to move forward and assist you with your success. Please let me know if there is anything that Greg and I can do for you or your clients.

Have a GREAT weekend.
Amy

Courage is looking fear right in the eye and saying, "Get the hell out of my way, I've got things to do." - Author Unknown

New Refinance Programs - Fact or Fiction?

I know that you believe you understand what you think I said, but I'm not sure you realize that what you heard is not what I meant.

- Robert McCloskey

Everyone has heard them. You know, the rumors about all these new loan programs out there. The ones that will let anyone "refinance at the low rates." Is that the same program that will let "investors refinance to today's rates," as well? I heard that "the Administration is promoting it." I heard that there was "a bill just passed that requires it." No, that is "the modification program and you have to be current." No, you "don't need equity or income documentation."

These rumors are all around. Every local and national news station hints to "some new program" in their sound bites on the 6 o'clock news and consumers want to believe it so they take it their word as the "gospel truth."

Unfortunately, as it commonly occurs, there is a little truth inside every rumor. Can I reiterate...a little.

I thought I would send along some accurate data to shed some light to fact versus fiction. Over the past few days there have been several announcements from Washington regarding different initiatives moving forward. The FHFA (Federal Housing Finance Agency - Fannie and Freddie's regulator) released information regarding proposed changes to HAMP (the Home Affordable MODIFICATION Program - not refinance) which can be READ HERE. They also released an REO initiative specifically for investors to purchase pools of properties specifically for affordable rentals which can be READ HERE.

This morning the Obama Administration also sent a Press Release detailing the different programs and plans for additional changes to the current Making Home Arrodable Programs. It is important to understand that Lenders HAVE NOT implemented many of these changes, including the HARP 2.0 release (other than some current servicer to current servicer programs).

I hope this information helps shed some clarity to this topic for you and your customers looking to you as a resource and as more accurate information becomes available, I will let you know.

As always Greg and I look forward to the opportunity to assist your clients with their next refinance or purchase. Have a great week!
Amy

Details of the Administration's Plan to "Help Responsible Homeowner's and Heal the Housing Market"

As Discussed in the "State of the Union" Address

THE WHITE HOUSE
Office of the Press Secretary

FOR IMMEDIATE RELEASE
February 1, 2012

FACT SHEET: President Obama's Plan to Help Responsible Homeowners and Heal the Housing Market

In his State of the Union address, President Obama laid out a Blueprint for an America Built to Last, calling for action to help responsible borrowers and support a housing market recovery. While the government cannot fix the housing market on its own, the President believes that responsible homeowners should not have to sit and wait for the market to hit bottom to get relief when there are measures at hand that can make a meaningful difference, including allowing these homeowners to save thousands of dollars by refinancing at today's low interest rates. That's why the President is putting forward a plan that uses the broad range of tools to help homeowners, supporting middle-class families and the economy.

Key Aspects of the President's Plan

• Broad Based Refinancing to Help Responsible Borrowers Save an Average of $3,000 per Year:The President's plan will provide borrowers who are current on their payments with an opportunity to refinance and take advantage of historically low interest rates, cutting through the red tape that prevents these borrowers from saving hundreds of dollars a month and thousands of dollars a year. This plan, which is paid for by a financial fee so that it does not add a dime to the deficit, will:
• Provide access to refinancing for all non-GSE borrowers who are current on their payments and meet a set of simple criteria.
• Streamline the refinancing process for all GSE borrowers who are current on their loans.
• Give borrowers the chance to rebuild equity through refinancing.

• Homeowner Bill of Rights:The President is putting forward a single set of standards to make sure borrowers and lenders play by the same rules, including:
• Access to a simple mortgage disclosure form, so borrowers understand the loans they are taking out.
• Full disclosure of fees and penalties.
• Guidelines to prevent conflicts of interest that end up hurting homeowners.
• Support to keep responsible families in their homes and out of foreclosure.
• Protection for families against inappropriate foreclosure, including right of appeal.

• First Pilot Sale to Transition Foreclosed Property into Rental Housing to Help Stabilize Neighborhoods and Improve Home Prices: The FHFA, in conjunction with Treasury and HUD, is announcing a pilot sale of foreclosed properties to be transitioned into rental housing.

• Moving the Market to Provide a Full Year of Forbearance for Borrowers Looking for Work: Following the Administration's lead, major banks and the GSEs are now providing up to 12 months of forbearance to unemployed borrowers.

• Pursuing a Joint Investigation into Mortgage Origination and Servicing Abuses: This effort marshals new resources to investigate misconduct that contributed to the financial crisis under the leadership of federal and state co-chairs.

• Rehabilitating Neighborhoods and Reducing Foreclosures: In addition to the steps outlined above, the Administration is expanding eligibility for HAMP to reduce additional foreclosures, increasing incentives for modifications that help borrowers rebuild equity, and is proposing to put people back to work rehabilitating neighborhoods through Project Rebuild.

1. Broad Based Refinancing Plan

Millions of homeowners who are current on their mortgages and could benefit from today's low interest rates face substantial barriers to refinancing through no fault of their own. Sometimes homeowners with good credit and clean payment histories are rejected because their mortgages are underwater. In other cases, they are rejected because the banks are worried that they will be left taking losses, even where Fannie Mae or Freddie Mac insure these new mortgages. In the end, these responsible homeowners are stuck paying higher interest rates, costing them thousands of dollars a year.

To address this challenge, the President worked with housing regulators this fall to take action without Congress to make millions of Americans eligible for lower interest rates. However, there are still millions of responsible Americans who continue to face steep barriers to low-cost, streamlined refinancing. So the President is now calling on Congress to open up opportunities to refinancing for responsible borrowers who are current on their payments.

Under the proposal, borrowers with loans insured by Fannie Mae or Freddie Mac (i.e. GSE-insured loans) will have access to streamlined refinancing through the GSEs. Borrowers with standard non-GSE loans will have access to refinancing through a new program run through the FHA. For responsible borrowers, there will be no more barriers and no more excuses.

Key components of the President's plan include:

• Providing Non-GSE Borrowers Access to Simple, Low-Cost Refinancing: President Obama is calling on Congress to pass legislation to establish a streamlined refinancing program. The refinancing program will be open to all non-GSE borrowers with standard (non-jumbo) loans who have been keeping up with their mortgage payments. The program will be operated through the FHA.

• Simple and straightforward eligibility criteria: Any borrower with a loan that is not currently guaranteed by the GSEs can qualify if they meet the following criteria:

• They are current on their mortgage: Borrowers will need to have been current on their loan for the past 6 months and have missed no more than one payment in the 6 months prior.
• They meet a minimum credit score. Borrowers must have a current FICO score of 580 to be eligible. Approximately 9 in 10 borrowers have a credit score adequate to meet that requirement.
• They have a loan that is no larger than the current FHA conforming loan limits in their area: Currently, FHA limits vary geographically with the median area home price - set at $271,050 in lowest cost areas and as high as $729,750 in the highest cost areas
• The loan they are refinancing is for a single family, owner-occupied principal residence. This will ensure that the program is focused on responsible homeowners trying to stay in their homes.

* Streamlined application process: Borrowers will apply through a streamlined process designed to make it simpler and less expensive for borrowers and lenders to refinance. Borrowers will not be required to submit a new appraisal or tax return. To determine a borrower's eligibility, a lender need only confirm that the borrower is employed. (Those who are not employed may still be eligible if they meet the other requirements and present limited credit risk. However, a lender will need to perform a full underwriting of these borrowers to determine whether they are a good fit for the program.)

• Program parameters to reduce program cost: The President's plan includes additional steps to reduce program costs, including:

• Establishing loan-to-value limits for these loans. The Administration will work with Congress to establish risk-mitigation measures which could include requiring lenders interested in refinancing deeply underwater loans (e.g. greater than 140 LTV) to write down the balance of these loans before they qualify. This would reduce the risk associated with the program and relieve the strain of negative equity on the borrower.
• Creating a separate fund for new streamlined refinancing program. This will help the FHA better track and manage the risk involved and ensure that it has no effect on the operation of the existing Mutual Mortgage Insurance (MMI) fund.

EXAMPLE: How Refinancing Can Benefit a Borrower With a Non-GSE Loan
•A borrower has a non-GSE mortgage originated in 2005 with a 6 percent rate and an initial balance of $300,000 - resulting in monthly payments of about $1,800.

•The outstanding balance is now about $272,000 and the borrower's home is now worth $225,000, leaving the borrower underwater (with a loan-to-value ratio of about 120%).

•Though the borrower has been paying his mortgage on time, he cannot refinance at today's historically low rates.

•Under the President's legislative plan, the borrower would be eligible to refinance into a 4.25% percent 30-year loan, which would reduce monthly payments by about $460 a month.

• Refinancing Plan Will Be Fully Paid For By a Portion of Fee on Largest Financial Institutions: The Administration estimates the cost of its refinancing plan will be in the range of $5 to $10 billion, depending on exact parameters and take-up. This cost will be fully offset by using a portion of the President's proposed Financial Crisis Responsibility Fee, which imposes a fee on the largest financial institutions based on their size and the riskiness of their activities - ensuring that the program does not add a dime to the deficit.

• Fully Streamlining Refinancing for All GSE Borrowers: The Administration has worked with the FHFA to streamline the GSEs' refinancing program for all responsible, current GSE borrowers. The FHFA has made important progress to-date, including eliminating the restriction on allowing deeply underwater borrowers to access refinancing, lowering fees associated with refinancing, and making it easier to access refinancing with lower closing costs.

To build on this progress, the Administration is calling on Congress to enact additional changes that will benefit homeowners and save taxpayers money by reducing the number of defaults on GSE loans.

We believe these steps are within the existing authority of the FHFA. However, to date, the GSEs have not acted, so the Administration is calling on Congress to do what is in the taxpayer's interest, by:
a. Eliminating appraisal costs for all borrowers:  Borrowers who happen to live in communities without a significant number of recent home sales often have to get a manual appraisal to determine whether they are eligible for refinancing into a GSE guaranteed loan, even under the HARP program. Under the Administration's proposal, the GSEs would be directed to use mark-to-market accounting or other alternatives to manual appraisals for any loans for which the loan-to-value cannot be determined with the GSE's Automated Valuation Model. This will eliminate a significant barrier that will reduce cost and time for borrowers and lenders alike.

b. Increasing competition so borrowers get the best possible deal: Today, lenders looking to compete with the current servicer of a borrower's loan for that borrower's refinancing business continue to face barriers to participating in HARP. This lack of competition means higher prices and less favorable terms for the borrower. The President's legislative plan would direct the GSEs to require the same streamlined underwriting for new servicers as they do for current servicers, leveling the playing field and unlocking competition between banks for borrowers' business.

c. Extending streamlined refinancing for all GSE borrowers: The President's plan would extend these steps to streamline refinancing for homeowners to all GSE borrowers. Those who have significant equity in their home - and thus present less credit risk - should benefit fully from all streamlining, including lower fees and fewer barriers. This will allow more borrowers to take advantage of a program that provides streamlined, low-cost access to today's low interest rates - and make it easier and more automatic for servicers to market and promote this program for all GSE borrowers.

• Giving Borrowers the Chance to Rebuild Equity in their Homes Through Refinancing: All underwater borrowers who decide to participate in either HARP or the refinancing program through the FHA outlined above will have a choice: they can take the benefit of the reduced interest rate in the form of lower monthly payments, or they can apply that savings to rebuilding equity in their homes. The latter course, when combined with a shorter loan term of 20 years, will give the majority of underwater borrowers the chance to get back above water within five years, or less.

To encourage borrowers to make the decision to rebuild equity in their homes, we are proposing that the legislation provide for the GSEs and FHA to cover the closing costs of borrowers who chose this option - a benefit averaging about $3,000 per homeowner.

To be eligible, a participant in either program must agree to refinance into a loan with a no more than 20 year term with monthly payments roughly equal to those they make under their current loan. For those who agree to these terms, the lender will receive payment for all closing costs directly from the GSEs or the FHA, depending on the entity involved.

EXAMPLE: How Rebuilding Equity Can Benefit a Borrower

• A borrower has a 6.5 percent $214,000 30-year mortgage originated in 2006. It now has an outstanding balance of $200,000, but the house is worth $160,000 (a loan-to-value ratio of 125). The monthly payment on this mortgage is $1,350.
• While this borrower is responsibly paying her monthly mortgage, she is locked out of refinancing.
• By refinancing into a 4.25 percent 30-year mortgage loan, this borrower will reduce her monthly payment by $370. However, after five years her mortgage balance will remain at $182,000.
• Under the rebuilding equity program, the borrower would refinance into a 20-year mortgage at 3.75 percent and commit her monthly savings to paying down principal. After five years, her mortgage balance would decline to $152,000, bringing the borrower above water.
• If the borrower took this option, the GSEs or FHA would also cover her closing costs - potentially saving her about $3,000.

• Streamlined Refinancing for Rural America: The Agriculture Department, which supports mortgage financing for thousands of rural families a year, is taking steps to further streamline its USDA-to-USDA refinancing program. This program is designed to provide those who currently have loans insured by the Department of Agriculture with a low-cost, streamlined process for refinancing into today's low rates. The Administration is announcing that the Agriculture Department will further streamline this program by eliminating the requirement for a new appraisal, a new credit report and other documentation normally required in a refinancing. To be eligible, a borrower need only demonstrate that he or she has been current on their loan.

• Streamlined Refinancing for FHA Borrowers: Like the Agriculture Department, the Federal Housing Authority is taking steps to make it easier for borrowers with loans insured by their agency to obtain access to low-cost, streamlined refinancing. The current FHA-to-FHA streamlined refinance program allows FHA borrowers who are current on their mortgage to refinance into a new FHA-insured loan at today's lower interest rates without requiring a full re-underwrite of the loan, thereby providing a simple way for borrowers to reduce their mortgage payments. However, some borrowers who would be eligible for low-cost refinancing through this program are being denied by lenders reticent to make loans that may compromise their status as FHA-approved lenders. To resolve this issue, the FHA is removing these loans from their "Compare Ratio", the process by which the performance of these lenders is reviewed. This will open the program up to many more families with FHA-insured loans.

2. Homeowner Bill of Rights

EXAMPLE: How Rebuilding Equity Can Benefit a Borrower:

The Administration believes that the mortgage servicing system is badly broken and would benefit from a single set of strong federal standards As we have learned over the past few years, the nation is not well served by the inconsistent patchwork of standards in place today, which fails to provide the needed support for both homeowners and investors. The Administration believes that there should be one set of rules that borrowers and lenders alike can follow. A fair set of rules will allow lenders to be transparent about options and allow borrowers to meet their responsibilities to understand the terms of their commitments.

The Administration will therefore work closely with regulators, Congress and stakeholders to create a more robust and comprehensive set of rules that better serves borrowers, investors, and the overall housing market. These rules will be driven by the following set of core principles:

• Simple, Easy to Understand Mortgage Forms: Every prospective homeowner should have access to clear, straightforward forms that help inform rather than confuse them when making what is for most families their most consequential financial purchase. To help fulfill this objective, the Consumer Financial Protection Bureau (CFPB) is in the process of developing a simple mortgage disclosure form to be used in all home loans, replacing overlapping and complex forms that include hidden clauses and opaque terms that families cannot understand.

• No Hidden Fees and Penalties: Servicers must disclose to homeowners all known fees and penalties in a timely manner and in understandable language, with any changes disclosed before they go into effect.

• No Conflicts of Interest: Servicers and investors must implement standards that minimize conflicts of interest and facilitate coordination and communication, including those between multiple investors and junior lien holders, such that loss mitigation efforts are not hindered for borrowers.

•Assistance For At-Risk Homeowners:
Early Intervention: Servicers must make reasonable efforts to contact every homeowner who has either demonstrated hardship or fallen delinquent and provide them with a comprehensive set of options to help them avoid foreclosure. Every such homeowner must be given a reasonable time to apply for a modification.

* Continuity of Contact: Servicers must provide all homeowners who have requested assistance or fallen delinquent on their mortgage with access to a customer service employee with 1) a complete record of previous communications with that homeowner; 2) access to all documentation and payments submitted by the homeowner; and 3) access to personnel with decision-making authority on loss mitigation options.

* Time and Options to Avoid Foreclosure: Servicers must not initiate a foreclosure action unless they are unable to establish contact with the homeowner after reasonable efforts, or the homeowner has shown a clear inability or lack of interest in pursuing alternatives to foreclosure. Any foreclosure action already under way must stop prior to sale once the servicer has received the required documentation and cannot be restarted unless and until the homeowner fails to complete an application for a modification within a reasonable period, their application for a modification has been denied or the homeowner fails to comply with the terms of the modification received.

• Safeguards Against Inappropriate Foreclosure

Right of Appeal: Servicers must explain to all homeowners any decision to take action based on a failure by the homeowner to meet their payment obligations and provide a reasonable opportunity to appeal that decision in a formal review process.

Certification of Proper Process: Prior to a foreclosure sale, servicers must certify in writing to the foreclosure attorney or trustee that appropriate loss mitigation alternatives have been considered and that proceeding to foreclosure sale is consistent with applicable law. A copy of this certification must be provided to the borrower.

The agencies of the executive branch with oversight or other authority over servicing practices -the FHA, the USDA, the VA, and Treasury, through the HAMP program - will each take the steps needed in the coming months to implement rules for their programs that are consistent with these standards.

3. Announcement of Initial Pilot Sale in Initiative to Transition Real Estate Owned (REO) Property to Rental Housing to Stabilize Neighborhoods and Improve Housing Prices

When there are vacant and foreclosed homes in neighborhoods, it undermines home prices and stalls the housing recovery. As part of the Administration's effort to help lay the foundation for a stronger housing recovery, the Department of Treasury and HUD have been working with the FHFA on a strategy to transition REO properties into rental housing. Repurposing foreclosed and vacant homes will reduce the inventory of unsold homes, help stabilize housing prices, support neighborhoods, and provide sustainable rental housing for American families.

Today, the FHFA is announcing the first major pilot sale of foreclosed properties into rental housing. This marks the first of a series of steps that the FHFA and the Administration will take to develop a smart national program to help manage REO properties, easing the pressure of these distressed properties on communities and the housing market.

4. Moving the Market to Provide a Full Year of Forbearance for Borrowers Looking for Work
Last summer, the Administration announced that it was extending the minimum forbearance period that unemployed borrowers in FHA and HAMP would receive on their mortgages to a full year, up from four months in FHA and three months in HAMP. This forbearance period allows borrowers to stay in their homes while they look for jobs, which gives these families a better chance of avoiding default and helps the housing market by reducing the number of foreclosures. Extending this period makes good economic sense as the time it takes the average unemployed American to find work has grown through the course of the housing crisis: nearly 60 percent of unemployed Americans are now out of work for more than four months.

These extensions went into effect for HAMP and the FHA in October. Today the Administration is announcing that the market has followed our lead, finally giving millions of families the time needed to find work before going into default.

•12-Month Forbearance for Mortgages Owned by the GSEs: Fannie Mae and Freddie Mac have both announced that lenders servicing their loans can provide up to a year of forbearance for unemployed borrowers, up from 3 months. Between them, Fannie and Freddie cover nearly half of the market, so this alone will extend the relief available for a considerable portion of the nation's unemployed homeowners.

• Move by Major Servicers to Use 12-Month Forbearance as Default Approach: Key servicers have also followed the Administration's lead in extending forbearance for the unemployed to a year. Wells Fargo and Bank of America, two of the nation's largest lenders, have begun to offer this longer period to customers whose loans they hold on their own books, recognizing that it is not just helpful for these struggling families, but it makes good economic sense for their lenders as well.

• A New Industry Norm: With these steps, the industry is gradually moving to a norm of providing 12 months of forbearance for those looking for work. This is a significant shift worthy of note, as only a few months ago unemployed borrowers simply were not being given a fighting chance to find work before being faced with the added burden of a monthly mortgage payment.

5. Joint Investigation into Mortgage Origination and Servicing Abuses

The Department of Justice, the Department of Housing and Urban Development, the Securities and Exchange Commission and state Attorneys General have formed a Residential Mortgage-Backed Securities Working Group under President Obama's Financial Fraud Enforcement Task Force that will be responsible for investigating misconduct contributing to the financial crisis through the pooling and sale of residential mortgage-backed securities. The Department of Justice has announced that this working group will consist of at least 55 DOJ attorneys, analysts, agents and investigators from around the country, joining existing state and federal resources investigating similar misconduct under those authorities.

The working group will be co-chaired by senior officials at the Department of Justice and SEC, including Lanny Breuer, Assistant Attorney General, Criminal Division, DOJ; Robert Khuzami, Director of Enforcement, SEC; John Walsh, U.S. Attorney, District of Colorado; and Tony West, Assistant Attorney General, Civil Division, DOJ. The working group will also be co-chaired by New York Attorney General Schneiderman, who will lead the effort from the state level. Other state Attorneys General have been and will be joining this effort.

6. Putting People Back to Work Rehabilitating Homes, Businesses and Communities Through Project Rebuild

Consistent with a proposal he first put forward in the American Jobs Act, the President will propose in his Budget to invest $15 billion in a national effort to put construction workers on the job rehabilitating and refurbishing hundreds of thousands of vacant and foreclosed homes and businesses. Building on proven approaches to stabilizing neighborhoods with high concentrations of foreclosures - including those piloted through the Neighborhood Stabilization Program - Project Rebuild will bring in expertise and capital from the private sector, focus on commercial and residential property improvements, and expand innovative property solutions like land banks.

In addition, the Budget will provide $1 billion in mandatory funding in 2013 for the Housing Trust Fund to finance the development, rehabilitation and preservation of affordable housing for extremely low income families. These approaches will not only create construction jobs but will help reduce blight and crime and stabilize housing prices in areas hardest hit by the housing crisis.

7. Expanding HAMP Eligibility to Reduce Additional Foreclosures and Help Stabilize Neighborhoods

To date, the Home Affordable Mortgage Program (HAMP) has helped more than 900,000 families permanently modify their loans, providing them with savings of about $500 a month on average. Combined with measures taken by the FHA and private sector modifications, public and private efforts have helped more than 4.6 million Americans get mortgage aid to prevent avoidable foreclosures. Along with extending the HAMP program by one year to December 31, 2013, the Administration is expanding the eligibility for the program so that it reaches a broader pool of distressed borrowers.

Additional borrowers will now have an opportunity to receive modification assistance that provides the same homeowner protections and clear rules for servicers established by HAMP. This includes:

• Ensuring that Borrowers Struggling to Make Ends Meet Because of Debt Beyond Their Mortgage Can Participate in the Program: To date, if a borrower's first-lien mortgage debt-to-income ratio is below 31% they are ineligible for a HAMP modification. Yet many homeowners who have an affordable first mortgage payment - below that 31% threshold - still struggle beneath the weight of other debt such as second liens and medical bills. Therefore, we are expanding the program to those who struggle with this secondary debt by offering an alternative evaluation opportunity with more flexible debt-to-income criteria.
• Preventing Additional Foreclosures to Support Renters and Stabilize Communities: We will also expand eligibility to include properties that are currently occupied by a tenant or which the borrower intends to rent. This will provide critical relief to both renters and those who rent their homes, while further stabilizing communities from the blight of vacant and foreclosed properties. Single-family homes are an important source of affordable rental housing, and foreclosure of non-owner occupied homes has disproportionate negative effects on low-and moderate-income renters.

8. Increasing Incentives for Modifications that Help Borrowers Rebuild Equity

Currently, HAMP includes an option for servicers to provide homeowners with a modification that includes a write-down of the borrower's principal balance when a borrower owes significantly more on their mortgage than their home is worth. These principal reduction modifications help both reduce a borrower's monthly payment and rebuild equity in their homes. While not appropriate in all circumstances, principal reduction modifications are an important tool in the overall effort to help homeowners achieve affordable and sustainable mortgages. To further encourage investors to consider or expand use of principal reduction modifications, the Administration will:

•Triple the Incentives Provided to Encourage the Reduction of Principal for Underwater Borrowers: To date, the owner of a loan that qualifies for HAMP receivesbetween 6 and 21 cents on the dollar to write down principal on that loan, depending onthe degree of change in the loan-to-value ratio. To increase the amount of principal thatis written down, Treasury will triple those incentives, paying from 18 to 63 cents on the dollar.

•Offer Principal Reduction Incentives for Loans Insured or Owned by the GSEs: HAMP borrowers who have loans owned or guaranteed by Fannie Mae or Freddie Mac do not currently benefit from principal reduction loan modifications. To encourage the GSEs to offer this assistance to its underwater borrowers, Treasury has notified the GSE's regulator, FHFA, that it will pay principal reduction incentives to Fannie Mae or Freddie Mac if they allow servicers to forgive principal in conjunction with a HAMP modification.

Ha Ha

An office exec was interviewing a blonde for an assistant position, and wanted to find out a little about her personality.
"If you could have a conversation with anyone, alive or dead, who would it be?"
"I'd have to say the living one."