Unique Borrowers Unique Solutions Federal Agencies Working to

Unique Borrowers, Unique Solutions Federal Agencies Working to Help Homeow June 2012 | Making Home Affordable

2012 Integrated Response MHA and related programs work together to help homeowners avoid foreclosure HARP 2. 0 FHA Refinance HAFA Short Sales MHA Extension and Expansion DOJ SETTLEMENT FHA Distressed Loan Sales REO to Rental June 2012 | Making Home Affordable 2

MHA Extension – Addition of HAMP Tier 2 Enhancements designed to provide relief to more homeowners and to accelerate housing market recovery • Extended MHA through December 31, 2013 • Expanded eligibility through HAMP Tier 2 • Borrowers previously ineligible • Owners of Rental Properties • Tripled investor incentives for principal reduction and offered incentives for GSE principal reduction June 2012 | Making Home Affordable 3

HARP 2. 0 GSE Refinance Opportunity Expanded • Eliminates certain up-front fees • Removes the 125% LTV ceiling • Eliminates many reps and warranties • Extended through December 31, 2013 June 2012 | Making Home Affordable 4

FHA Refinance Options Changes could kick-start underused FHA short refinance option Streamlined Refi – Good Credit and Equity • Reduced up-front MIP from 1. 15% to. 55% on streamlined refinance • Expected to save borrowers $1, 000 Short Refi - “Challenged” Credit and Underwater • FHA 1 st must be 97. 75% but total LTV can be 115% • Requires at least 10% debt forgiveness by original 1 st lien holder • New 1 st lien servicer may pay off subordinate liens to achieve LTV • A borrower is “current” if they have made 3 timely payments on a trial modification June 2012 | Making Home Affordable 5

DOJ Settlement 5 major Servicers have agreed to a package of $25 billion which could be worth much more to borrowers over 3 years • New foreclosure disclosures • Comprehensive servicing standards • $1. 5 Billion to foreclosed borrowers • $3. 5 Billion penalty to State and Feds • $3 Billion to refinance underwater borrowers • $17 Billion for principal reduction – expected to provide up to $32 Billion in borrower relief June 2012 | Making Home Affordable 6

DOJ Settlement and HAMP PRA Incentives No servicer can receive HAMP principal reduction incentives and also get credit under the settlement $210, 000 UPB loan with a property value of $140, 000 (150% LTV) is 5 months delinquent. Servicer forgives a total of $70, 000 over three years via HAMP and receives $27, 510 in PRA incentives from Treasury • Servicer Owned – Net claim against settlement is $36, 116. ($70, 000 -$27, 510 = $42, 490 x $. 85) • Serviced for Others –– Net claim against settlement is $16, 996. ($70, 000 -$27, 510 = $42, 490 x $. 40) June 2012 | Making Home Affordable 7

HAFA / GSE Short Sales Short sales are a critical but still underused foreclosure prevention option HAFA – Treasury Program • • • Pre-Approved short sale transactions Release of borrower liability Prohibition on borrower contributions Cap on subordinate lien payouts No occupancy requirement Borrower must have hardship GSE Short Sale Program • New performance timelines – Acknowledge in 5 days, decision in 30 days • New streamlined short sale requirements coming soon June 2012 | Making Home Affordable 8

REO To Rental Four to five million REO are expected to hit the market in the next 5 years – further depressing home values • Pilot program by GSEs to increase single family rental stock and reduce REO on the retail market • Initial offering of 2, 495 properties • Atlanta, Phoenix, Los Angeles, Riverside, cities in Florida • Expect up to 5 year hold – Realty Trac projections that returns could be as high as 12% in some markets June 2012 | Making Home Affordable 9

FHA Distressed Asset Sales Selling delinquent loans beforeclosure may provide new workout opportunities for borrowers and preserve communities • Beginning September 2012 FHA will sell up to 10, 000 delinquent loans to support community reinvestment objectives • Targeted at hardest hit states • Buyers may not foreclose for a minimum of 6 months. At least 50% of pool may not become REO • Buyer to use other workout strategies – modification, short sales, deed for rent, etc. June 2012 | Making Home Affordable 10

Trusted Advisors Escalate Tough MHA Cases HMPAdmin. com provides servicers, counselors, and trusted advisors with easy access to MHA information and tools Resources for Counselors and Trusted Advisors • Presentations • Escalation process details • Webinar schedule • Brochures, fact sheets, etc. June 2012 | Making Home Affordable 11

Resources for MHA Escalations Resources are in • 888 -995 -HOPE ask for MHA-Help place to help homeowners • HAMP Solution Center: 1 -866 -939 -4469 resolve issues with servicers • Escalate cases to escalations@HMPadmin. com Really tough cases get escalated to Treasury staff • Fannie. Mae. com, (800)7 Fannie, Know. Your. Options. com • Freddie. Mac. com, (800)Freddie and select option 2, Freddie_Mac_Borrower_Help@Freddie. Mac. com. June 2011 | Making Home Affordable 12