Amy Swaney, CMB ~ Citywide Home Loans ~ NMLS#209752 ~ BK#0116254

Thursday, April 26, 2012

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