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1.What is a Forbearance?

With this option, you and your mortgage company agree to temporarily suspend or reduce your monthly mortgage payments for a specific period of time. This option lets you deal with your short-term financial problems by giving you time to get back on your feet and bring your mortgage current.

Forbearance may be an option if:

1. You are ineligible or do not want to refinance

2. You are facing a short-term hardship

3. You are several months behind on your mortgage payments

What are the benefits?

1. Lower or temporarily suspend your monthly payment—giving you time to improve your financial situation and get back on your feet

2. Less damaging to your credit score than a foreclosure

3. Stay in your home and avoid foreclosure

How does it work?

Forbearance reduces your monthly mortgage payment—or suspends it completely—during the forbearance period (usually between 90-180 days). If you qualify for forbearance, you and your mortgage company will sign an agreement that will outline the forbearance terms:

1. length of forbearance period,

2. reduced payment amount (if the payment is not suspended), and

3. the terms of repayment.

After the forbearance period has ended, you will need to repay the amount that was reduced or suspended. However, you usually have a few ways you can repay—moving the payments to the end of your mortgage, which will lengthen the term; making a one-time payment for the amount; or adding a specific amount to your payments each month until the entire amount is repaid (see Repayment Plan for more information).

If you are still struggling with your mortgage payments after the forbearance period is over, you may be able to qualify for a modification that would permanently change the terms of your mortgage

2. What is a Modification?

Under this option, you reach an agreement between you and your mortgage company to change the original terms of your mortgage—such as payment amount, length of loan, interest rate, etc. In most cases, when your mortgage is modified, you can reduce your monthly payment to a more affordable amount.

A modification may be an option if:

1. You are ineligible to refinance

2. You are facing a long-term hardship

3. You are several months behind on your mortgage payments or likely to fall behind soon

What are the benefits?

1. Resolve your delinquency status with your mortgage company immediately

2. May reduce your monthly mortgage payments to a more affordable amount

3. Change the original terms of your mortgage permanently, giving you a new start

4. Less damaging to your credit score than a foreclosure

5. Stay in your home and avoid foreclosure

How does it work?
A modification involves one or more of the following:

1. Changing the mortgage loan type (e.g., changing an Adjustable Rate Mortgage to a Fixed-Rate Mortgage)

2. Extending the term of the mortgage (e.g., from a 30-year term to a 40-year term)

3. Reducing the interest rate either temporarily or permanently

4. Adding any past-due amounts, such as interest and escrow, to the unpaid principal balance, which is then reamortized over the new term

3. What is Deed-for-Lease?

The Deed-For-Lease™ option is a program from Fannie Mae that allows you to lease your home after you have transferred the title to your property to the mortgage company (commonly called a Deed-in-Lieu of Foreclosure). The lease terms are up to 12 months (with the possibility to extend longer). And the monthly rent is based on the current rental rates for your area—not on your original mortgage payment.

Deed-for-Lease is an alternative to foreclosure and may be an option if:

1. You are ineligible to refinance or modify your mortgage

2. You are facing a long-term hardship

3. You are several months behind on your mortgage payments

4. You may owe more on your home than it’s worth

5. You have not been able to sell your home

6. You want to remain in your home and neighborhood

Find out who owns your loan

Deed-for-Lease is available for loans owned by Fannie Mae. To see if your loan is owned by Fannie Mae

Important! If your loan is not owned by Fannie Mae, there may be a similar leasing option offered by your mortgage company. Always contact them to see what is available

What are the benefits of a Deed-for-Lease?

1. Eliminate or reduce your remaining mortgage debt

2. Resolve your delinquency and avoid foreclosure

3. Stay in your home and neighborhood—no need to move or relocate

4. Lease at current market rate rent for up to 12 months with a possible option to extend the term

5. Pay no security deposit

6. Assistance for relocation may be available at the end of your lease

7. Start repairing your credit sooner than if you went through a foreclosure

8. May be able to get a Fannie Mae mortgage to purchase a home sooner (in as little as 2 years) by executing a DIL than if you went through foreclosure

How does it work?

If your loan is eligible for Deed-for-Lease,

1. Your mortgage must be owned by Fannie Mae

2. Your mortgage company will refer you to a property management company that will inspect your property and review your financial information

3. You will sign a lease agreement (if you qualify for the program)

4. You will sign a Deed-in-Lieu of Foreclosure (DIL) to transfer title to the property to Fannie Mae

5. Your lease becomes effective once the DIL is complete/accepted by Fannie Mae

6. You will remain in the property according to the lease terms paying monthly rent

7. The property management company will manage the property and collect the monthly rent

4. What is a Short Sale?

A Short Sale, also known as a pre-foreclosure sale, is when you sell your home for less than the balance remaining on your mortgage. If your mortgage company agrees to a short sale, you can sell your home and pay off all (or a portion of) your mortgage balance with the proceeds. You may also be eligible for the government’s Home Affordable Foreclosure Alternatives Program (HAFA) which offers short sale and DIL options.

A short sale is an alternative to foreclosure and may be an option if:

1. You are ineligible to refinance or modify your mortgage

2. You are facing a long-term hardship

3. You are behind on your mortgage payments

4. You owe more on your home than it’s worth

5. You have not been able to sell your home at a price that covers what you still owe on your mortgage

6. You can no longer afford your home and are ready or need to leave

What are the benefits of a Short Sale?

1. Eliminate or reduce your mortgage debt

2. Avoid the negative impact of a foreclosure

3. Start repairing your credit sooner than if you went through a foreclosure

4. May be able to get a Fannie Mae mortgage to purchase a home sooner (in as little as 2 years) than if you went through foreclosure (at least 7 years)

What is the process for a Short Sale?

If you qualify for this option, the process is similar to a normal real estate sales transaction. You will work with a real estate agent to market and sell your home. However, your mortgage company will also be working with you and your real estate agent every step of the way to:

1. set the sale price (based on current market value),

2. collect financial information and negotiate with other lien holders (i.e., your second mortgage company) if applicable,

3. review acceptable offers,

4. agree to the terms of the sale once a buyer is in place, and

5. work with the buyer’s real estate agent and mortgage lender to finalize the sale.

In some cases, you may be eligible to receive relocation assistance to use toward your moving expenses and to make the transition to new housing easier.

A Short Sale may take up to 120 days, but this could be shorter or longer depending upon your specific situation. If you are unable to sell your home, you may be able to transfer the ownership of your property to the owner of your mortgage (also called a Deed-in-Lieu of Foreclosure).

Keep Your Home Short Sale:

“Sell, Rent & Buy Back” program.

This program is approved by the US Treasury and HUD.**

Property must be in marketable condition and be in alignment with the surrounding

neighborhood as a Single Family Residence or condominium..

Qualifications:

· 30+ days or more late on payment as per HAFA guidelines.

· The homes first lien or mortgage reflects 20% or more in negative equity

· Home must be owner occupied.

· 1 st mortgage must be less than $729,750

· Individual must have a job and be able to pay market rent.

How does the Short Sell & Rent Back Program work?

1. Our approved realtors list your home*

2. A monthly lease rate is determined based on the appraised value of your home.

3. Under this agreement, you must keep the home clean and green…a reflection of your pride in home ownership.

4. You are required to maintain, your property insurance, property taxes and Home Owners Association fees if property is located in an HOA.

5. You contract with the non-profit organization to buy your home. We will negotiate with your mortgage company to sell your home to our investor under the Federal Governments HAFA Program. This process may take 2 to 4 months for approval to sell the home under the HAFA guidelines.

6. The sale closes and you rent the property back.

7. Your mortgage company pays our fees…you don’t pay any commissions.

8. Buy the home back after 1 to 5 years.

* It is a requirement with mortgage companies that the property must be listed with a licensed real estate agent.

Arms length Transaction does not apply in this program per US Treasury
5. What is a Deed-in-Lieu?

A Deed-in-Lieu of Foreclosure (DIL) is where you, the homeowner, voluntarily transfer the ownership of your property (the title and all property associated with it) to the owner of your mortgage in exchange for a release from your mortgage loan and payments.

A DIL is an alternative to foreclosure and should be considered if:

1. You are ineligible to refinance or modify your mortgage

2. You are facing a long-term hardship

3. You are behind on your mortgage payments

4. You owe more on your home than it’s worth

5. You don’t want to sell your home or haven’t been able to sell your home

6. You can no longer afford your home and you are ready to leave

A lease option may be available—Deed-for-Lease

You may be able to lease your home after completing a DIL if your mortgage is owned by Fannie Mae. To see if your loan is owned by Fannie Mae.

Important! If your loan is not owned by Fannie Mae, there may be a similar leasing option offered by your mortgage company. Always contact them to see what is available.

What are the benefits of a Deed-in-Lieu?

1. Eliminate or reduce your remaining mortgage debt

2. Avoid the negative impact of a foreclosure

3. May be eligible for relocation assistance in some cases

4. Start repairing your credit sooner than if you went through a foreclosure

5. May be able to get a Fannie Mae mortgage to purchase a home sooner (in as little as 2 years) than if you went through foreclosure

6. If your loan is owned by Fannie Mae, you may qualify to lease your home through the Deed-for-Lease Option

What is the process for a Deed-in-Lieu?

To qualify for a DIL, you will work with your mortgage company to complete the eligibility process, such as determining the value of the property and how much you still owe as well as reviewing your current hardship. If approved, you will need to vacate the property (unless we agree to lease the property back to you), and you may be required to sign standard pre-closing documents as well as attend the closing.

Additionally, you will need to leave the home—both inside and outside—in good condition, free of interior and exterior trash, debris or damage, and all personal belongings must be removed. In some cases, you may be eligible to receive relocation assistance to use toward your moving expenses and to make the transition to new housing easier.

A DIL usually takes around 90 days to complete, but this could be shorter or longer or depending upon your specific situation.