The Home Affordable Unemployment Program (HAUP) begins today. It is designed to provide relief to unemployed homeowners. HAUP (referred to as “UP”), “offers eligible unemployed borrowers a forbearance plan to temporarily reduce or suspend their mortgage payments.”

By August 1, 2010, all servicers who are participating in Making Home Affordable will be helping homeowners who are struggling to stay current because of unemployment.

Here are the details:

Forbearance Plan Eligibility:

A borrower must meet the Home Affordable Modification Program (HAMP) eligibility criteria as well as:

• be unemployed when request is made;
• be entitled to receive unemployment benefits in the month of the UP forbearance plan effective date (servicers have discretion to require a borrower to have received unemployment benefits for up to three months before commencement of the forbearance plan); and
• request an UP forbearance plan before they become seriously delinquent (i.e., miss three monthly mortgage payments).

Forbearance Plan Evaluation:

Servicers must follow these requirements when evaluating a borrower for an UP forbearance plan:

• Unemployed borrowers who request assistance for HAMP must first be evaluated for an UP forbearance plan. If they qualify, they must be offered an UP forbearance plan before they can be considered for HAMP.
• Borrowers currently in a HAMP trial period plan who become unemployed may receive an UP forbearance plan if they have missed less than three monthly payments as of the first payment due date of the HAMP trial period plan. If they do qualify, their existing HAMP trial period plan must be cancelled and the UP forbearance plan must immediately begin without waiting until the borrower has received three months of unemployment benefits.
• Borrowers previously determined to be ineligible for a HAMP modification may request an UP forbearance plan if they meet the eligibility requirements.
• Borrowers in a permanent HAMP modification who become unemployed are not eligible for an UP forbearance plan.

Forbearance Plan Terms

• Term must be three months or upon reemployment (whichever is less). Servicers may extend this period according to their investor/regulatory guidelines.
• Monthly mortgage payment must be reduced to less than or equal to 31% of the borrower’s gross monthly household income and may be suspended in full.

Transition to HAMP

• Borrowers in an UP forbearance plan will be evaluated for HAMP at either reemployment or 30 days prior to the UP forbearance period expiring (whichever happens first).

For those with questions (after speaking with your servicer), you can talk with a HUD-approved housing counselor by calling 1-888-995-HOPE (4673).

Lenders and loan servicers participating in HAFA must sign a servicer participation agreement with Fannie Mae — the program administrator and financial agent representing the United States in this case — to participate in HAMP by October 3, 2010 (the previous deadline was December 31, 2009. This was updated March 26, 2010)1 Therefore, most lenders are participating and those who are not have the opportunity to at any time. Lenders are developing comprehensive programs in order to prepare for the expected flood of applications for short sales and deeds-in-lieu of foreclosure that HAFA will unleash.  

Bank of America
  

• Bank of America announced in March its commitment to participate in HAFA when it activates. It has been preparing for a more streamlined process for months though its support of HAMP
• Bank of America’s short sale processor Equator announced the launch of a brand-new best practices software workflow solutions directly related to HAFA2
• Bank of America’s HAFA website gives homeowners details on their support of the program

Citibank  

• Citibank is participating in HAMP, which is a requirement for participating in HAFA
• CitiMortgage has launched a pilot Foreclosure Alternatives Program that assists its borrowers in avoiding foreclosure by offering a deed-in-lieu that allows homeowners to remain in their homes for six months after they agree to sign over their property deeds to CitiMortgage. The pilot program offers relocation counseling and a minimun of $1,000 in relocation assistance. Currently the program is available in Texas, Florida, Illinois, Michigan, New Jersey, and Ohio.3

JP Morgan Chase  

• Chase has announced their support of HAFA and posted a Short Sale Information Packet on their website

GMAC Financial Services  

• GMAC has started a program to preemptively contact borrowers who are not eligible for loan modifications under HAMP and offering alternatives through HAFA and claims a three-day turnaround on short sale applications4

Wachovia  

• Wachovia is participating in HAMP, which is a requirement for participating in HAFA

Wells Fargo  

• Wells Fargo is participating in HAMP, which is a requirement for participating in HAFA
• Wells Fargo has been ramping up efforts to assist homeowners by actively contacting those who are facing hardships5
• Wells Fargo announced on April 14, 2010 their support of HAFA and ongoing support for foreclosure avoidance programs. Wells Fargo has more than 17,400 U.S. staff focused on home retention and foreclosure avoidance.6

NATIONAL PARTICIPATING SERVICERS  

Servicers that participate in HAFA are also participating in HAMP. For a full list of servicers participating in HAMP, visit Making Home Affordable’s Participating Servicers List.Below is a list of the Non-GSE Participants in HAMP7

Last updated: 17 May 2010
  

Sources: 

1. Making Home Affordable. Supplemental Directive 09-09 “Background” p. 1 (2010): https://www.hmpadmin.com/portal/docs/hafa/sd0909r.pdf
2. PR Newswire. “Equator Launches HAFA Solution” (2010): http://www.prnewswire.com/news-releases/equator-launches-hafa-solution-88226552.html
3. Citigroup Inc. “Citi to Pilot Foreclosure Alternatives Program to Help Distressed Borrowers” (2010): https://www.citimortgage.com/Mortgage/misc/ForeclosureAlternativesProgramPressRelease.pdf
4. HousingWire. “Servicers Streamlining Short Sales as HAFA Nears” (2010): http://www.housingwire.com/2010/03/22/servicers-streamlining-short-sales-as-hafa-nears/
5. Wells Fargo. “Wells Fargo Doubles HAMP Completions and Continues Modification Efforts” (2010): https://www.wellsfargo.com/press/2010/20100217_hamp_updates
6. Wells Fargo. “Wells Fargo Continues to Deliver Modifications to More Borrowers and Focus on Home Retention Effort” (2010): https://www.wellsfargo.com/press/2010/20100414_HAMP
7. Making Home Affordable. “Servicer Perfomance Report Through April 2010″ (2010): http://www.financialstability.gov/docs/April%20MHA%20Public%20051710%20FINAL.pdf

Bank of America said it approved another 24,000 mortgage payment reductions in April, bringing its total effort under the government’s Home Affordable Modification Program to 56,400 borrowers offered full-term assistance.

But the bank cautioned that it is seeing the beginning of a decrease in the number of active trial modifications, in part because of stricter HAMP requirements.

New rules requiring financial information before a borrower can enter the trial modification period “will slow the inflow of new trial modifications.”

Bank of America claimed the most active trail modifications as of HAMP’s March update with more than 283,000. Wells Fargo was second with nearly 145,000. But Bank of America’s share of those eligible that are in active modifications was only 26 percent, compared to 38 percent for Wells Fargo and 37 percent for JPMorgan Chase.

Under HAMP guidelines, Bank of America is also notifying customers who did not meet eligibility requirements for HAMP or who did not meet the requirements of their trial period plan.

The bank is mailing letters to thousands of these customers, telling them they are not eligible to complete a permanent HAMP modification.

“We are letting customers know that we may explore other homeownership retention options, depending on individual circumstances and investor guidelines,” said Jack Schakett, credit loss mitigation strategies executive for Bank of America Home Loans.

The bank said it has completed a total of 600,000 modifications in foreclosure mitigation efforts since January 2008 “through all available programs.”

FREE Loan Modification and Foreclosure Avoidance Workshop

Saturday, May 8, 2010

from 10:00 to Noon

in Rancho Palos Verdes, CA

Seating is limited. You Must RSVP below.

Homeowners get your questions answered from a panel of professionals within your community.

Our community Professionals will cover the following topics:

• What to do if you are underwater (Owe more than your home is worth).
• Why Foreclosure is Never a good option
• How to get a Loan Modification
• Debt Settlement Options
• Bankruptcy Options
• Credit Repair
• What is happing with real estate in the South Bay?

Guest Speakers:

Financial Planner: Economic Review / Retirement Protection

Real Estate Attorney : Risk Management

Pre Foreclosure Specialists:  Al D’Amico Broker/Owner Keller Williams Realty – Discussion on changes to Loan Modification & Short Sale Process

Debt Relief / Settlement : Explain efficient alternative to Bankruptcy

Certified Public Accountant : Explaining HR3648 The Mortgage Forgiveness Debt Relief Act and Special IRS section 108(a)(1)(b)

Bankruptcy Attorneys: Explain what a chapter 7 11 & 13 can and can’t do.

Credit Repair Specialist: Explain a how short sale, foreclosure, bankruptcy or Deed in Lieu affects your credit.

Special Guest Speaker: Ted Blaisdell, Short Sale/REO manager for Wells Fargo, Wachovia, World Savings. Discussing the Wachovia Fast Track Short Sale Program.

Local Representatives from the following Banks will be on hand to answer questions as well:

• Wells Fargo (Wachovia, World Savings and

Cost: FREE

This exclusive homeowner event is being held next door to the Keller Williams Office in Rancho Palos Verdes.

500 Silver Spur Rd, Suite 303

Rancho Palos Verdes, CA 90275

Time:
10:00 to Noon

Seating is Limited, RSVP early to reserve a seat This workshop is exclusive to Homeowners only please.

If you are investing in Real Estate in the Los Angeles Foreclosure Market you need to have your agent follow these 8 tips to help you win more deals. See below for more tips and to get a list of foreclosures near you.

Download my Free Foreclosure Buyers Guide.

Click Here to get our daily foreclosure list sent to you.

Lee Williams is a Los Angeles South Bay Area Real Estate Agent who has appeared on MSNBC, the Oprah Winfrey Show and TechTV. Dedicated to serving investor, first time and move up buyer clients with one simple rule, you come first.  Lee Williams is a Realtor(r) primarily serving Palos Verdes, Rancho Palos Verdes, Torrance, San Pedro, Lomita, Carson, Manhattan Beach, Hermosa Beach, and Palos Verdes Estates.

Contact Lee at (310) 882-5428 email: LeeWilliams@KW.com or visit http://LeeWilliams.YourKWAgent.com

DRE# 1726182