Ratios Rent Conv FHA VA USDA

Housing Ratio 31% 29 % Capacity: Ability to

30% 28% 41 %
EEM 33% PMI= Conventional repay, ratios, and
Loans if less than 20% being financially fit
Debt to 36% 36% up to 45% 43% 41% 41%
down payment. Capital: Money saved,
Income Clients that
Ratio DTI FHA-EEM 45%
Released at 78% or at assets for down-
meet specific
midpoint, and upon payment, closing cost
• Liquidation of to
Criteria up non-exempt assets
request at 80% LTV Character: Credit history,
• Requires50%a means test (ability to repay)
credit score, job history,
• Best for clients with no assets MIP= FHA Loans,
Upfront Charge N/A NONE 1.75% 1.25% -3.3%for the life
2% housing stability
remains of
UFMIP Funding Fee Guarantee Collateral: The property
the loan, the upfront
Fee itself, appraised value of
charge can be paid or the property
Annual N/A NONE 0.8 - 1.05% financed
None into the 0.5
loan.
Charge
Credit Varies by Varies by 580 620 640
Landlord lender the Max LTV 96.5%
Score minimum is 500-579
620-640 Max LTV 90%

Down N/A Typically, 3.5% None or low None

Payment
Factors 30, 15, 10yr it can Down Certificate of Term can be
be fixed, payment can eligibility 33 to 38
ARM or interest be gifted years
only

Chapter
7

• Can stop foreclosure & cure delinquent

Chapter mortgage payments over time
• Involves a repayment plan 3 to 5 years
13 •Allows you to reschedule secure debts
• Wage earners plan

• You have the right to know what is in you file

FCRA • You have the right to dispute incomplete or inaccurate information

• Access to your file is limited, and you may seek damage from violators

• You have the right to a free annual credit report

• You have the right to place a fraud alert on your credit file
• Credit Card numbers must be truncated; full number cannot be visible on
receipts

FACTA

• You can dispute billing errors on youth credit card account. Dates to
FCBA remember:
• 30 Days given to the creditor to acknowledge a dispute
• 60 Days the consumer has to file a dispute
• 90 Days the creditor has to research it
Creditor must send billing statements at least 14 days before the due date

CopyrightONSC/NACA
 Lender Transitioning Options
FHA 1. Allows 120 days for the sale and sales amount is based on appraised values Foreclosure: A legal process in
Short Sale 2. If the sale doesn't happen a request for lieu cam be made which mortgaged property is
3. A deed-in-lieu can be requested without a short sale sold to pay the loan of the
Benefits: Up to $1000 in financial assistance defaulting borrower.
Eligibility: Owner occupied, must provide documentation on reduction of income or increase Foreclosure laws are based on
in living expenses, and acceptable sales price and days on the market
the statutes of each state

Short Sale/Pre-Foreclosure Sale:

FHA Purpose: Eligibility
Allows borrower who cannot afford the • Must be owner occupied
The mortgage company allows
Deed-in-
mortgage to voluntarily sing the house • 31 days delinquent or more the homeowner to sell the
Lieu
back to the lender • Document income reduction or house for an amount that falls
Benefit: Up to $2,000 in Financial Assistance increase in living expenses "short" of the amount still owed

•Sign a deed-in-lieu agreement may be Deed-in-Lieu of Foreclosure

good for a borrower that Allows a homeowner to avoid
foreclosure by providing a deed
GSE The available short sale and deed-in-lieu options agreement may be good for a borrower "in lieu" of foreclosure to the
Mortgage that is: lender. The homeowner gives
Disposition the title back and effectively
Options • Ineligible to refinance or modify the mortgage facing long term hardship that transfers ownership to the
qualifies under specific program criteria mortgage company
•Behind or at risk of falling behind on mortgage payments
Owes more on the home that it's worth or Cash-for-Keys: An alternative
to legal eviction following
foreclosure: in exchange for
• Cannot afford the home and is ready to leave
turning the keys and vacating
Benefits: Eliminates or reduces mortgage debt, avoid the negative impact of foreclosure, the property the occupant
repair credit sooner than with foreclosure, reduces time to buy again, be eligible for up to receives cash.
#3,000 in relocation assistance, for deed-in-lieu may be as high as $7,000 for Freddie Mac
and $10,00 for Fannie Mae Mortgages

Fannie Mae & Freddie Criteria or Short Sale Deed-in-lieu

Purpose: Allows a homeowner to sell the home for less than the Purpose: Allows a borrower who cannot afford the mortgage
balance owed, though a financial contribution, or a deficiency payments to voluntarily sign the house back over to the lender
judgment, may apply depending on the situation. Process: Typically, a homeowner seeking a deed-in-lieu does
Process: Typically, a homeowner considering a short sale has tried not want or has not been able to sell the home. Homeowners
to sell the home but was unable to sell at a price that covers the will often attempt a short sale first. A mortgage release
mortgage balance usually takes about 90 days. Borrower qualifications
Borrower has an eligible hardship determines the next steps, and qualified homeowners may be
eligible for flexible exit options
▪ Sale is an arm's length transaction (buyer and seller have no
relationship to each other) ▪ Vacate the home immediately
▪ Borrower previously listed home for sale with a licensed real ▪ Stay for up to 3 months (no rent)
estate broker according to specific criteria ▪ Leas the home at a market-based for up to a year
▪ Borrower did not enter a program or arrangement where a third ▪ Servicer complied with the evaluation hierarchy
party takes the property title and arranges a short sale in ▪ Borrower has an eligible hardship
exchange for a fee ▪ Borrower can convey clear and market-able title to
▪ If the borrower is current on mortgage or has been delinquent the property
for less than 31 day the borrower must: If current on mortgage or has been delinquent for less than
Occupy the home as primary residence 31 days, borrower must: Occupy home as primary residence,
▪ Have a monthly DTI ratio greater than 55% and have a monthly DTI ratio greater than 55.

Steps to transition from homeownership Cost and Consequences of Foreclosure

• Determine the service options based on the type of mortgage for • Remain on credit for up to 7 years and lowers credit
Conventional loans it varies per lender score
• Apply for desired option and applicable transition assistance • Will prevent the option to buy again for several years
• Establish a budget for new housing • Limited time to vacate the property
• Secure new housing prior to the sale date • Paying taxes on lender's losses
• Pack belongings and prepare for the move • May lead to a deficiency judgment
• Begin to improve credit and discuss long term housing plan • Will cause loss of equity
• Children may need to attend new schools
Deficiency Judgement: Assessment of liability by a court against a homeowner for the unpaid balance owed to the servicer after
a foreclosure, short sale or deed-in-lieu if the sale does not cover the full amount owed.
 Copyright©NSC/NACA

HUD’S FAIR HOUSING COMPLAINT PROCESS Fair Housing Initiatives

Program, or FHIP
INTAKE
Provides funding to Fair Housing
Organizations and Nonprofits that
assist people who may have been
COMPLAINT FILED COMPLAINT REJECTED victims of housing discrimination.
(1 YEAR)

NOTIFICATION SENT Fair Housing Assistance

(No Later than 10 days) Program, or FHAP
Provides funding to State and Local
Agencies that enforce these
RESPONSE REQUESTED
additional fair housing protections, if
(Within 10 days of receipt)
the protections are substantially
equivalent to the Fair Housing Act.
ASSIGNED FOR INVESTIGATION
(Completed no laterTEMPORARY OR PRELIMINARY RELIEF
than 100 days) Affirmatively furthering fair housing
If harm is likely to occur Previous Definition: "taking meaningful
actions, in addition to combating
discrimination, that overcome patterns of
RESPONSE REQUESTED segregation and foster inclusive
Pre, or Post Determination communities free from barriers that
restrict access to opportunity based on
protected characteristics."
NO CONCILIATION Preserving Community and
CONCILIATION SIGNED
NO SETTLEMENT Neighborhood Choice Final Rule, or
"Choice Rule," housing that, among other
attributes, is affordable, safe, decent, free
of unlawful discrimination, and accessible
as required under civil rights laws."
REASONABLE CAUSE NON-REASONABLE CAUSE
Subsidized Housing Unsubsidized
Privately owned housing
Housing
OPTION TO ELECT US DISTRICT COURT whose owners agree to Privately owned
OR THE ADMINISTRATION LAW JUDGE lease their properties to housing purchased
(20 DAYS) low- or moderate-income with HUD-insured or
families in exchange for a
HUD-held mortgages,
subsidy from the which makes it
government. Subsidies possible to rent the
including individual property at an
HEARING BEFORE THE US HEARING BEFORE THE HUD vouchers or subsidies for affordable price.
all units in a multifamily
DISTRICT COURT ADMINISTRATION LAW JUDGE
(30 DAYS) (120 DAYS)

Consolidated Plan
A plan designed to help states and local
CASE CLOSED jurisdictions to assess their affordable
housing and community development
needs and market conditions, and to make
data-driven, location based investment
PRIVATE RIGHT OF ACTION decisions.
(120 DAYS)
Formula Grants Marketing Plan
Formula grant programs are
noncompetitive awards that A sample fillable form to
participating organizations that meet create an Affirmative Fair
certain minimum requirements are Housing Marketing Plan, or
Copyright©NSC/NACA entitled to receive. These grants are AFHMP, for Multifamily
administered by state and local Housing is available in the
administrations. Resources section.
 HOME Investment Partnership
Program: HUD program that
Loan Type Definition provides grants to states and
Convetional Is a mortgage that is not guaranteed or insured by any government agency, including the localities for building, buying,
Loans Federal Housing Administration (FHA), U.S. Department of Agriculture (USDA) and the and/or rehabilitating affordable
Department of Veterans Affairs (VA). It is typically fixed in its terms and rate. Can be 30, 15, housing for rent or purchase or
or 10-year term Good for: 1) Have good credit, 2) Have funds for closing cost and down providing direct rental
payment (typically 20% or would require PMI) and 3) Meet lender-specific qualification assistance to low-income
Subprime A subprime loan is a loan offered to people who do not qualify for a conventional loan, people.
Loans either because of low income, a high loan-to-value ratio, or poor credit history. The
CDBG Community Development Block
subprime borrowers are charged a higher interest rate to comp ensate for the hi her risks.
Grant Program: HUD program that
Government- They are non-conventional loans, are exactly what they sound like: loans insured by the provides grants to states and localities
Insured government. A government-backed loan is a loan subsidized by the government, which to provide decent housing and a
Mortgage protects lenders against defaults on payments, thus making it a lot easier for lenders to suitable living environment and to
Loans offer potential borrowers lower interest rates. FHA, VA, USDA expand economic opportunities,
FHA An FHA loan is a mortgage issued by an FHA-approved lender and insured by the Federal principally for low- and moderate
Housing Administration (FHA). Designed for low-to-moderate income borrowers, FHA income persons.
loans require a lower minimum down payments and lower credit scores than man Section 8/ Housing Choice
conventional loans. Voucher Federal government program
A VA loan is a mortgage loan in the United States guaranteed by the United States to assist very low-income families, the
Department of Veterans Affairs (VA). The basic intention of the VA home loan program is to elderly and disable to afford decent,
VA
supply home financing to eligible veterans or surviving spouse to purchase properties with safe, and sanitary housing in the
no down payment. It requires certificate of eligibility
private market.
USDA loans are made by private lenders and guaranteed by the U.S. Department of
Agriculture (USDA). They are offered to home buyers in rural areas, homebuyer's income less
than 80% of AMI, need flexible credit guidelines, need zero down-payment loan, have
USDA reasonable credit 640, and loan term up to 38 years

• A percentage calculated by dividing the amount of

Total Tenant Payment
LTV the outstanding loan amount by the sales price or
Families will pay the highest of:
appraised value of the home; also called an LTV ratio.
30% of monthly adjusted income, 10% of GMI, Welfare Rent, or • Back end Ratio: is the total monthly debt, including
$25 minimum rent determine by the PHA housing and other debt obligations, divided by the
gross monthly income. Expressed as a percentage
DTI
PHA VASH
Public Housing Agency – They Veterans Affairs Supportive
offer vouchers not the HUD office Housing (Purpose to prevent
who administers the funds veteran’s homelessness) • Front end Ratio: Is the housing payment divided by
the gross monthly income expressed as a percentage
Housing
Ratio

of the gross monthly income

• A fixed interest rate loan is a loan where the interest rate doesn't fluctuate during the fixed rate period
of the loan. A fixed rated mortgage is typically paid off in 30 years and the borrower can accurately
predict their future payments for 15 or 30 years, but on the 15 year-term the payment is higher because
Fixed you are paying the mortgage faster.
Rate Loans
• Variable rate loans are loans that have an interest rate that fluctuates over time as market interest rate change.
They generally have lower interest rates for a set period, after which the rate will change periodically in
corresponding financial index associated with the loan. The monthly payment will fluctuate accordingly.
Adjustable •The 7/1 ARM means that for seven years the borrower's interest rate will remain fixed. After the initial period of 7
Rate Loans ARMyears the rate can adjust once every year for the remaining of the loan. This might be attractive to borrowers over a
fixed-rate mortgage because they'll pay lower interest in the initial period

Interest Only • An interest-only loan is an adjustable-rate mortgage that allows the borrower to pay just the interest
Loans rate for the first few years from one month to 10 years. That's often a low "teaser" rate.
• After that, the loan will adjust at pre-determined intervals for the life of the loan. The interest rate can
increase or decrease on each adjustment, and there are caps on how high it can go.

Copyright©NSC/NACA

Loan Definition Special Assessments Homeowner's

Type and HOAs may collect a special
 Home A home equity loan provides a lump sum of money. It is often referred to as a second mortgage, assessments or community
because it can be obtained while you are still bound to your initial mortgage. You take the assessments to pay for a large
Equity amount to borrow in one lump sum. The time period is typically 5-15 years. It will be right for you
Loan maintenance to benefit the entire
if:
community. They are generally
• Your home improvement plan is a large one-time expense.
announced six months in advance and
homeowners can choose a HOI policy
• You want a fixed rate for your monthly payments. that includes loss assessment
• You do not have funds available for significant closing costs. coverage

HELOC A HELOC gives you the ability to borrow up to certain amount over a 10-year period, you don't
borrow a fixed amount and pay it back over time, instead you have access to a pool of cash that
Property Maintenance and Repairs:
you can dip into as needed like a big credit card, is a revolving loan
Household System: Includes appliances,
• The repairs consist of multiple expenses to be paid over an extended period of time windows, insulation, electric, heating,
• You do not have funds available for significant closing costs. ventilation, HC...
Warranty Coverage: Offer protection for
To use effectively obtain quotes from contractors to determine how much the improvement will mechanical systems.
cost before applying, research products and lenders before making a final decision, don't use Life Used: A homeowner or inspector can
the credit for anything besides the project and cancel it once is paid off estimate when the system was
FHA 203k It is a loan through an FHA lender guaranteed by FHA which means lenders take less risk, it manufactured, installed or purchased Life
allows you to borrow money using one loan for both your home purchase and home
Loan improvement. This loan will be right for you if:
Expectancy: Can refer to online resources
to estimate life expectancy of household
• Your plan to purchase a home that needs major repairs
systems.
• You own a home and want to refinance to conduct major repairs. Upkeep Options: Proactive steps
• The home and repairs meet the 203k qualifications set forth by FHA. homeowners can take to prevent repairs
To use it effectively select an FHA-approved lender and ensure the property value after and increase the life of a system.
completion of the repairs supports the mortgage or refinance amount including repairs. Estimated Cost (New System):
A loan through the FHA's Streamlined 203k program permits homebuyers and homeowners to Homeowners can purchase refurbished
Streamline
Event finance up to $35,000 into their mortgage toAction
repair, improve, or upgrade their home. It may be appliances to save money or choose EE
203k Loan
1866 One
used in year after the
conjunction withend of the
an EEM forcivil warefficient
energy and the ban on slavery
improvements through 203
A Streamline 13 th
the program appliances with an Energy Starr Label.
amendment
is right for you if:Congress passed the Civil Rights Act of 1866, this bill declared that Repair Replacement Strategy: Fix and
The Civil replace systems, attend free workshops to
except for American
would like Indians "all minor
persons born in theconsultants,
US" were engineers
declared orUSarchitects.
Rights Act of • CitizensYou
of the
to carry out
Unitedproject
Statesmeet
withthe
rehab without
fullStreamline
and equal203rights for the security of•person
learn how to do it at hardware stores and
• Your proposed qualification set by FHA You intent local nonprofits, or find a reliable
1866 to and property,
use one or morewith the same
contractors right to use,
to complete purchase,
the repairs lease,
or can proveandyoutransfer
have the real estateto
experience contractor and pay to do it.
doproperty.
the work and can complete the project in six months. Target Replacement Date: Set a target
Title 1 loans are insured by FHA and may be used for alterations, repairs, and site improvements replacement date for household systems to
Title 1 Loan plan financially for the expense.
1896 onThe
single or multifamily
case stemmed fromhomes,ancan be used
1892 with in
incident 203k loans.
which Use Title
Homer 1 if: •refused
Plessy You areto
thesitowner,
in
you're [Link]: Is the website to learn about
Homer Plessy a carbuying underHe
for blacks. a land installment
challenged thiscontract, or you're of
was a violation thethe
person
14 th leasing
amendment the property
but the and
home safety improvement projects.
the lease extends at least 6 months beyond the date when the loan must be repaid)
Supreme Court decision upheld the constitutionality of racial segregation under Benefits of EE Improvements:
V. Ferguson the
Your want a fixed
"Separate butinterest
equal"rate.
doctrine leading to legal segregation until 1954. • Generate lower energy bills
1933 HOLC  You need a loan
The HOLC was created up to $25,000 for improving
by Congress a single-family
with the mission tohome, or $12,000
refinance per unit
mortgages in not to • Entitles to federal tax credits
exceed during
default $60,000the for Great
multi-unit, or improving
Depression to or building
help borrowersa non-residential
avoid structure
foreclosure UsetoTitle 1
and
Homeowners if: You select a lender approved to make Title 1 loans and use caution in choosing and
• Qualify homeowners for EEM
' Loan create "residential security maps" (Redlining) of areas risky for lending, and 239 • [Link]: Is the website to learn
supervising home repairs dealers or contractors, specially if the loan is made through a
affluent
dealer. cities safe for investment were outlined blue. The discriminatory Deed more about EE improvements
Corporation & Restrictions that govern the use of a real estate and local zoning ordinances
Redlining based on neighborhoods, also contribute to the large segregated patterns • [Link]: ENERGY STAR website:
1948
Energy EEMTheAssist
US Supreme
individuals Court held that
to purchase and 14 th Amendment's
theenergy efficient home Equal Protection
or refinance a homebanned
to make Steps for Emergency Preparedness:
Efficient
Shelly v. Discriminatory
Energy Deed Restriction
Efficient improvements. covenants
The energy that
package is prohibited
financed intoblack
the people
EEM butfrom
the loan is
underwritten
owning or as if the energy
occupying realpackage;
property theand
borrower doesclauses
restricted not needintoproperty
qualify for the additional
deeds that • Prepare specifically for emergencies that
Mortgagee
Kraemer financing
included or discriminatory
have a higher down payment.
language EEM void
became can beand insured through FHA or VA. The EEM
unenforceable. are likely to happen in your region.
may be right forthyou if:
1954 On May 17 , 1954, US Supreme Court delivered the unanimous ruling that
• overturned
You need a loan
the larger than you
"Separate butqualify
Equal"forand
to make EE improvements
segregation in public to your home
schools was a • Select an interior room with no or few
Brown v. windows as the safe room
• violation
You desireoftothe
buy14 th
amendment
a better and moreand unconstitutional.
energy efficient home The government could no
Board of
• longer
You, thesupport
home and segregated programs
the improvements andthe
meet contributed toset
qualifications thebycivil
FHAright movement.
or VA.
Education To use it effectively you must select an approved FHA lender familiar with EEM, determine the
1962 President
cost of the EE John F Kennedy
improvement andsigned the Executive
the savings with a homeOrder 1 1063rating
with energy , to prohibit
system (HERS) or an
Executive discrimination
energy consultant. in the sale,
Complete theleasing, rental,after
improvements or other disposition of properties, and
closing
facilities but only if owned, operated or funded by_ federal government.
Order
Cash-Out Refinancing a mortgage is replacing it with a new mortgage with better terms such as lower • Plan a safe escape route from your home; If
11063
Refinancing interest rates. Cash out Refinancing can leverage the borrower's home equity to provide the in multiple-story home, store ladders in an
The Civil Rights cash
Thefunding for home
Civil Right Actsimprovements, you replace
of 1964 prohibits the original
discrimination mortgage
based with color,
on race, a new mortgage
or easily accessible place.
with a higherorigin
national amountin and receiveand
programs the difference
activities to
thatinvest, savefederal
receive or use for large purchases or
funding.
Act of 1964 home repairs. Refinancing is right for you if: • Identify responsibilities for all members.
April 4, 1968 • Dr.
YourKing wasmortgage
original assassinated during
interest ratesthe
are demonstrators
considerably higher against the housing
than current loan rates and will
Assassination of practices, after
lead to a large his assassination
reduction in monthly public
mortgagedemonstrations
payments. demanded the racial • Share critical contact information
Martin L King Jr • equality that [Link]
You are required pay had [Link] on the original loan and owe less than 80% of
for mortgage • Practice the plan and share the plan with
April 11, 1968 the home's value.
In response to Dr, King's assassination, Congress passed the Civil Rights household members.
The Civil Rights YouActwould prefer to
of 1968. switch
Title VIIIfrom an adjustable-rate
of the act known as loan to Fair
the a fixed-rate
HousingloanAct prohibited
Act of 1968 Establish a location to meet outside the
discrimination in housing sales, rentals and financing based on race, neighborhood, a place where your family can
color, national origin, and religion, and an obligation on federal agencies live temporarily.
o affirmatively further fair housing in the administration of their housing Copyright©NSC/NACA
and urban development
August 1, 1968 The Housing and Urban Development act of 1968 established Ginnie Mae. With
HUD Act of the goal to expand the availability of government-secure home loans to
1968 moderate income families.
1974 In 1974 the Fair Housing Act was amended to prohibit discrimination based on
Fair Housing Act sex, adding to the four protected characteristics established in 1968
1988 In 1988 the Fair Housing Act was amended to further expand the law to include
Fair Housing Act disability and familial status, making it a total of 7 protected characteristics
July 1, 2010 HUD announces a new guidance that provides lesbian, gay, bisexual, and
LGBT Housing transgender individuals and families with further assistance when facing housing
Discrimination discrimination and instructs HUD staff to inform individuals filing complaints
Complaints about state and local agencies that have LGBT- inclusive discrimination laws. Reasonable Modification
 Reasonable Accommodation
It is prohibited to refuse to make
reasonable accommodations or changes
in rules, policies, practices, or services
necessary for a person with disabilities
to use and enjoy a dwelling

5 Exemptions to Fair Housing Act

1) Single-Family House Exemption
7 Protected Characteristics under the Fair Housing Act of 1968 after the 1974 & a. Owns 3 or fewer homes at one time
1988 Amendments b. Does not use a real estate broker
RACE Discrimination based on race may be directed to whites and non-whites. Categories of c. Doesn't use discriminatory ads
race are outlined in the US census 2) Mrs. Murphy Exemption
COLOR Discrimination based on the lightness, darkness or other color characteristics a. Four-Unit Owner-occupied buildings
NATIONA Discriminating based on the country where a person, or his/her ancestors were born b. Doesn't use discriminatory ads
L ORIGIN 3) Religious Organization Exemption a.
RELIGION Asking for religious affiliation, or demonstrating preference to churchgoers over non- Is not operated for commercial
churchgoers purpose
SEX Providing different terms for males or females b. Housing is made available only to
DISABILIT A record of having a physical or mental impairment or is regarded as having it that
persons of the same religion
Y limits major life activities such as hearing, seeing, speaking, breathing, performing
manual tasks, walking, caring for oneself, learning or walking. It doesn't cover c. Does not discriminate based on
transvestite, use of illegal habit or addiction is not disability unless in treatment race,
FAMILIAL Family includes one or more individuals with children under 18, expecting, or securing color, or national origin
STATUS custody of minors 4) Private Club Exemption
BLOCKBUSTING: To convince, or attempt to convince, a person to sell or rent a dwelling because of a. Can give preference to its members
the prospective entry into the neighborhood of a person of a particular race, color, religion, sex, if it is private and not open to the
familial status, national origin or with a disability public
b. Provides housing that is incidental to
Copyright©NSC/NACA its primary purpose
c. It is no commercial
5) Housing for Older Persons Exemption
a. Housing is designed to assist elderly
persons
b. 100% of the community is 62 or
older or
Homebuyi c. 80% of the household have at least
Functions
ng Team one resident 55 or older and the
Real A real estate agent is an individual who is licensed to negotiate and community adheres to polices that
Estate arrange real estate sales for a commission. Buyers and sellers typically demonstrate intent to house older
hire their own real estate agents to represent their interests in the persons and complies with
Agent transaction. A real estate agent typically works for a real estate
broker: The RE Agent help search for homes that fit clients' needs and verification of occupancy
make appointments for showings. Helps with Step 5 "Making an
offer", negotiations, negotiates Earnest Money typically from 1% to
10% of purchase price
Insurance A person employed to sell insurance policies. Most lenders require
homeowners to obtain homeowners insurance before a loan is
Agent
issued.
Underwri An underwriter is a lender's representative who analyzes a loan
application, the potential borrower's credit history, and a judgment of
ter
the property value. By analyzing these things, s/he determines the
amount of risk involved in making the loan and the amount a
borrower can repay. An underwriting fee may be included in the
closing costs.
Home Inspector A home inspector is a professional who conducts an inspection of the home's
structure and mechanical systems to determine quality, soundness, and safety.
S/he makes the potential homebuyer aware of any repairs that may be needed.
The homebuyer generally pays these professionals directly.

Lender A lender refers to a person or company that makes loans for

real estate purchases. A related term, loan officer, refers to a
representative of a lending or mortgage company who is
responsible for soliciting homebuyers, qualifying candidates
for loans, and processing loans. Some are paid a flat salary,
and others are paid on commission
Appraiser An appraiser is a professional who estimates a property's fair
market value based on the sales of comparable homes in the
area and the property's features. This estimate is generally
required by a lender before loan approval to ensure that the
mortgage loan amount is not more than the value of the
property. Appraisers also identify health and safety issues of a
 home. It is common for lenders to hire an appraiser and add the Credit Pull for a Mortgage
appraisal fee to the buyer's closing costs. Have all credit reports pulled within a
Assessor An assessor is a government official responsible for determining the value of a 30-day period as all credit inquiries
property for taxation purposes. within a 30-day period related to
Closing Agent Also known as a settlement agent, this individual oversees the final transaction mortgages will count as a one
in the property purchase

Selecting Insurance • Shop around to compare rates. With similar products, consider the least expensive.
• Ask insurance agents about discounts offered for homes with specific safety features or for other reasons.
• Insure your home rather than the land it is on because after a disaster, the land will still be there.
• Recognize that the cost of homeowner's insurance may be included in your monthly mortgage payment.
• Do your research up front rather than waiting until a disaster hits to find out if you have the right type of coverage.
Select insurance coverage that matches our lifestyle, the home's age/condition, and the home's geographic location.
Insurance discounts Buying package insurance or bundling insurance, installing deadbolts, purchasing smoke alarms, installing an interior
sprinkler system, increasing your credit score.
Structure coverage Reimburses policyholders for repairs needed for a building structure when it is damaged by certain perils. For example, if a
fallen branch damages the roof during a snowstorm
Loss of use overage Loss of use coverage provides funding for housing and food expenses of policyholders who temporarily cannot live in their
home when it is damaged or destroyed by certain perils
Content coverage Reimburses policyholders for personal property destroyed by certain perils. Depending on the policy, clothing, furniture,
household items, musical instruments, laptops, and other items can be reimbursed
Floater for valuables While homeowners' policies cover most personal property, certain valuable items such as expensive jewelry, artwork, or
silverware may have limited coverage and clients would need a Floater separate policy for heirlooms or expensive items
Cash value Actual cash value policies consider depreciation and reimburse you for what you would be able to sell the item for at the time
it was damaged or destroyed
Replacement cost Replacement cost policies, on the other hand, will pay you for the amount that it would cost to replace the item with a new
item of the same variety
Medical payment Reimburses policyholders for a certain portion of the medical bills incurred when someone becomes injured on a
policyholder's property and chooses not to sue. For this policy to apply, the individual injured cannot be a resident of the
insured home.
Personal liability Provides funding for a defense lawyer or legal judgment if a policyholder is sued for a negligent act that led to an injury of a
guest and if he/she choose to sue the homeowner for negligence
Add-Ons HOI does not cover damage from an earthquake, clients living in seismic area can purchase an earthquake insurance addon, it
Earthquake is not required by law and does not cover damage by flood and the cost is affected by A wood frame structure, an older
building not designed to withstand earthquakes, or a high-risk area for earthquakes
Add-Ons Flood Flood from outside the home is not covered by HOI. Clients may want to or may be required to add flood insurance to their
Insurance homeowner's insurance packages if they are in a high-risk zone designated by FEMA. To determine the risk, check the NFIP
(National Flood Insurance Program) website, If you are not at high risk zone you are not mandated by law to purchase. It
covers flood from outside the home only and the cost is affected by the location of the home.

Copyright©NSC/NACA

Regulatory Definition
Charges
CFPB Established by Congress as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act; it
became Law in July of 2010 it gets its name from the two House of Representatives who presented the
initial version in December of 2009 Chris Dodd & Barney Frank to address the failure of consumer
protection by:
• Protects consumers by carrying out federal consumer financial laws
• Supervises companies and restricts unfair, deceptive and abusive practices
• Takes consumers complaints
• Promotes financial education
• Monitors financial markets for new risks to consumers
Through Title XIV of the Act CFPB issued a host of rules making mortgage changes to: RESPA, TILA,
HOEPA
Making Home Created in 2009 by the Treasury Department and HUD to help avoid foreclosure
Affordable • Standardize the process for requesting mortgage workouts from servicers
MHA • Programs included modifications, refinancing, mortgage assistance for unemployed and financial
assistance to transition out of a home
• Expired in 2016 and payments were set to increase after five years
Hardest Hit Established by the US Department of Treasury in February 2010. To end in 2020
Fund • Provided $7.6 billion to DC and 18 states hardest hit by the foreclosure crisis to develop local
programs to help homeowners; on Feb 2016 increased to 9.6 billion
Administered by each state Housing Finance Agency HFA to help unemployed

Joint State Reached between Attorneys General of 49 states and five servicers—Ally (formerly GMAC), Bank of
America, Citi, JPMorgan Chase, and Wells Fargo—that were involved in deceptive lending and
National
foreclosure practices, like Robo-signing without verifying the application information. It provided 50
Mortgage
 Freddie Mac refinance their home if
they were current on the mortgage
Settlement Billion to the signing states and the federal government to help distressed borrowers through many even if the home was underwater
state initiatives.
2012

The state agencies that govern foreclosures typically are:  The borrower delinquent when or of monthly payment is
Delinquent
- House Finance Agency unpaid after the due date
- Department of Community Affairs
- Housing Department  A conventional loan is in default when a payment
- Attorney General's Office Default has not been paid after 60 to 90 days. For FHA a loan is in
default after 30 days from the due date.

Foreclosure Timeline Restriction Consumer Complaints

A servicer cannot make a first notice CFPB 855-411-2372 or visit
for foreclosure until the borrower is [Link]/compl Robo  The process in which important documents that require
120 days late careful review are signed automatically like a robot by
aint Signing
someone who does not verify information

Judicial Foreclosure Non-Judicial Foreclosure STEPS - Loss Mitigation Process

• Foreclosure is a lawsuit • Courts are not involved I-Determine the reason client is
delinquent
• The servicer issues the homeowner a • Communication occurs between the
2-Determine if he/she wants to stay in
notice of the lawsuit called the Summons homeowner and the servicer
the house
or complaint • The servicer issues a Notice of Default or 3-Determine the type of mortgage 4-Gather
• If contested the court will set a date for NOD required financial documents to assess
affordability
homeowner and servicer to go before the • If the late is not cured 90 days after the
5- Complete the necessary forms to
Judge to present arguments NOD, the Notice of Sale NOS is sent
request a loss mitigation package
• The judge will decide on the case and can • The homeowner typically has 5-10 days 6- Submit request to the servicer
order a trial if there is difference on facts to cure the delinquency 7- Respond to additional requests
• The servicer cannot act regarding • Once the period of reinstatement has 8- If approved discuss if it is affordable
the ended the servicer schedules the sale or escalate
Foreclosure until the judge rules • The ownership transfers to the
 The judge issues the ruling allowing the servicer by lac of sale of the house is not
foreclosure to go forward Homeowner sold
has 30 days to cure the delinquency or
an auction sale is set

Servicemembers Civil Relief Act: To protect military Primary reason for default: 45% is due to Imminent Default: When default is
personnel in housing related issues.
loss or reduction of income reasonably foreseeable.
Copyright©NSC/NACA

Lender Definition Partial Claim: Defers some principal so

FHA Steps in 1.
Attempt to bring the mortgage current monthly payments are affordable
the loss 2.
Determine Eligibility for informal and Formal Forbearance plans
mitigation 3.
Determine eligibility for Special Forbearance -Unemployment Plan HA Forbearance Criteria:
process 4.
Determine eligibility for FHA-HAMP Loan modification Surplus X 85% / default amount If it equals
5.
Consider a pre-foreclosure sale (Short Sale) less than 6, the surplus is enough to cure
6.
Consider Deed in Lieu the default in six months and the borrower
will only be eligible for a forbearance.
Making Home Formal / informal Forbearance Special Forbearance Unemployment
 May provide terms for repayment  Delinquency more than 61 days
Affordable Report Loan Modification
 A period of reduced suspended payments  Suspends or reduced payments
MHA  Primary residence  Primary residence Scams
 Proof of financial hardship  Verify unemployment  Homeowner's Hope Hotline
 Proof of income, and show surplus  Maximum arrearage 12 months 888-995-HOPE
 Only option without verifiable losses of income or PITI and  [Link]
increase in living expense  Not in foreclosure  FTC: 877-382-4357
 Informal: Verbal, 3 months plan  State's Attorney General Office
 Formal Written 6 months plan  HUD Office of the Inspector
FHA HAMP Purpose: To Assist struggling homeowners to make mortgage payments because they are not  General Hotline: 800-347-3735
affordable and do not qualify for other options
Benefit: Allow mortgage payments to be reinstated by establishing an affordable payment and/or
partial claim
Eligibility: in default or imminent default, Loan origination date at least 12 months elapsed and at
least 4 payments paid, previous modification cannot be within 24 months.
Partial claim cannot exceed 30%
Borrower must: Demonstrate verifiable loss of income or increase in living expenses, submit hardship
affidavit, be ineligible for other FHA workout options, occupy home as primary
 Fannie Mae & Freddie Mac Flex Modification Financial Documentation
Overview: The Flex Modifications leverages the Standard and streamlined I-Monthly mortgage statement
modifications and can be applied to delinquent loans and in imminent default. 2-lnformation about other mortgages on the home
Benefit: Provides an option to resolve delinquency and sustain homeownership by 3-Two months paystubs
targeting a 20% payment reduction 4-Two years of tax returns 5-YTD profit and loss statement 6-Two months
Eligibility: Borrower must: bank statements
Be 60 or more days delinquent and occupy the property as primary residence, or 7-A utility bill with current address
Be imminent default (current or less than 60 days delinquent) and occupy the 8-UnempIoyment letter if applicable
property as primary residence. 9-Credit card statements.
Must submit the Borrower Response Package BRS that includes: 10- Information about other assets
-Completed and signed form 710 Uniform Borrower Assistance Form 11- A letter describing any circumstances that caused the
-Eligible hardship documentation reduced income or increased expenses, (job loss, divorce,
-Document stable income to support payment illness, etc.) not always required.
-Imminent default hardship documentation for borrowers less than 60
days delinquent
Restrictions:
 Must have originated at least 12 months prior to the modification request
 Must not have been modified 3 or more times previously, regardless of the
modification programs or dates
 If it is an investment property must be more than 60 days delinquent

HLP: Hope Loan Port: To facilitate transparency, accessibility, consistency of treatment, and a superior experience to consumers and their advocates in pursuit of
foreclosure alternatives and affordable loans in underserved markets:
 Only Counseling Agencies 501(c)(3) Non-profits and HUD approved, or participating in the National Foreclosure Mitigation Counseling (NFMC) program can use it, it is not
open to the public.
• Counselors can start a new case, track an existing case, submit the cases, and receive messages from the servicer
 Servicers must update the case status every 10 days when they are in control of the case.
RMA: Request for Mortgage Assistance form. This form was used with the Making Home Affordable program and continues to be use by many servicers or a similar version of
it for loan modifications or workout requests.
Copyright©NSC/NACA