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Principal Reduction Modification19026<p>&#160;</p> <table width="100%" class="ms-rteTable-default" cellspacing="0"><tbody><tr class="ms-rteTableEvenRow-default"><td class="ms-rteTableEvenCol-default" style="width&#58;50%;"><p>​<span class="ms-rteForeColor-9"><strong>PRINCIPAL REDUCTION MODIFICATION </strong></span> </p><p><span class="ms-rteForeColor-1"><strong>BACKGROUND</strong></span></p> <font color="#000000" face="Times New Roman" size="3"> </font> <p> The Federal Housing Finance Agency (FHFA) undertook an extensive evaluation to determine whether to implement a Principal Reduction Modification program for seriously delinquent, underwater borrowers whose loans are owned or guaranteed by Fannie Mae or Freddie Mac (the Enterprises).&#160; FHFA’s objective was to develop a program that helped targeted borrowers avoid foreclosure while also adhering to FHFA’s mandate to preserve and conserve the assets of the Enterprises.&#160; Below are details about the one-time Principal Reduction Modification program announced on April 14, 2016. </p><p>&#160;</p><p>​<span class="ms-rteForeColor-1"><strong>PRINCIPAL REDUCTION MODIFICATION PROGRAM</strong></span></p><ul><li><p>Underwater borrowers who meet the program's eligibility criteria will receive a solicitation letter containing terms for a modification no later than October 15, 2016.</p></li><li><p>The modification terms include capitalization of outstanding arrearages, an interest rate reduction down to the current market rate, an extension of the loan term to 40 years, and forbearance of principal and/or arrearages up to a certain amount to be converted later to forgiveness.<span style="text-decoration&#58;underline;"><font color="#0066cc">[i]</font></span></p></li><li><p>Upon completion of three timely payments and acceptance of the final modification, the principal forbearance amount calculated under the Streamlined Modification will instead be forgiven.</p></li><li><p>Servicers will require time to implement the Principal Reduction Modification program.&#160; Before the program is fully implemented, borrowers who believe they <span style="text-decoration&#58;underline;">may</span> be eligible for a Principal Reduction Modification and wish to pursue one before the program is fully implemented can accept an offered Streamlined Modification that will halt foreclosure proceedings but will not guarantee principal forgiveness.</p></li><ul><li><p>If the borrower is later determined to be eligible for a Principal Reduction Modification, the Streamlined Modification's principal forbearance will be converted to principal forgiveness.&#160; </p></li><li><p>Non-eligible borrowers will continue to benefit from the payment relief granted under their Streamlined Modification but will not receive principal reduction. </p></li></ul><li><p>Borrowers should not default on their mortgage or on an existing modification in an attempt to become eligible for a Principal Reduction Modification.&#160; To be eligible, borrowers must be at least 90 days delinquent as of March 1, 2016.&#160; Borrowers struggling to pay their mortgage or who have additional questions about the program should contact their servicer (the company to which they send their mortgage payments). </p></li></ul><p><span style="font-size&#58;7pt;"><span style="text-decoration&#58;underline;"><font color="#0066cc">[i]</font></span></span><span style="font-size&#58;7pt;"> For borrowers with mark-to-market loan-to-value (MTMLTVs) ratios over 115 percent, the Enterprises' standard and streamlined modifications forbear post-capitalization principal (which may include arrearages) down to a 115 percent MTMLTV ratio or, if forbearance would exceed 30 percent of the post-capitalization UPB, forbear 30 percent of principal.</span></p><p>&#160;</p> <font color="#000000" face="Times New Roman" size="3"> </font></td><td class="ms-rteTableOddCol-default" style="width&#58;30%;"><p>​<strong>KEY POINTS ABOUT THE PRINCIPAL REDUCTION MODIFICATION</strong></p><p><span class="ms-rteForeColor-9">Seriously delinquent, underwater borrowers must meet the following eligibility criteria&#58;</span></p><ul><li><p><span class="ms-rteForeColor-9">Are owner-occupants.</span></p></li><li><p><span class="ms-rteForeColor-9">Are at least 90 days delinquent as of March 1, 2016.</span></p></li><li><p><span class="ms-rteForeColor-9">Have an unpaid principal balance of $250,000 or less.</span></p></li><li><p><span class="ms-rteForeColor-9">Have a mark-to-market loan-to-value ratio of more than 115% after capitalization.</span></p></li></ul><p><span class="ms-rteForeColor-9">Builds on the Enterprises' existing Streamlined Modification programs.</span></p><p><span class="ms-rteForeColor-9">Eligible population expected to be approximately 33,000 borrowers.</span></p><p><span class="ms-rteForeColor-9">Final crisis-era modification program to give seriously delinquent, underwater borrowers a last opportunity to avoid foreclosure while also addressing negative equity remaining from the financial crisis.</span></p><p><span class="ms-rteForeColor-9"></span>&#160;</p><p><strong>KEY FACTS</strong></p><p><span class="ms-rteForeColor-9">The number of underwater homeowners with loans owned or guaranteed by Fannie Mae or Freddie Mac has declined by 80 percent in the last four years.</span></p><p><span class="ms-rteForeColor-9">Of all underwater loans nationally, only about 2 percent are severely delinquent, underwater loans owned or guaranteed by Fannie Mae or Freddie Mac.</span></p><p><span class="ms-rteForeColor-9">As recently as Q1 2015, 50 percent of bank portfolio loan modifications included principal reduction.</span></p><p><span class="ms-rteForeColor-9">Investors in non-performing loan sales commonly use principal reduction modifications.</span></p></td></tr><tr class="ms-rteTableOddRow-default"><td class="ms-rteTableEvenCol-default" colspan="2"><p>​ <strong class="ms-rteForeColor-1">​PRINCIPAL REDUCTION MODIFICATION KEY DATES</strong></p><ul><li><p><strong>March 1, 2016</strong> – Eligibility cut-off date; borrowers who become more than 90 days delinquent after this date are not eligible.</p></li><li><p><strong>July 15, 2016</strong> – Loan servicers must solicit, for a Streamlined Modification, all borrowers who are <em style="text-decoration&#58;underline;">potentially</em> eligible for Principal Reduction Modification on or before this date.</p></li><li><p><strong>October 15, 2016</strong> – Loan servicers must solicit all borrowers eligible for the Principal Reduction Modification starting no later than this date. </p></li><li><p><strong>December 31, 2016</strong> – Final date by which servicers may solicit borrowers eligible for the program or inform borrowers that they are eligible to have principal forgiven.</p></li></ul><p>&#160;</p><p><span class="ms-rteForeColor-1"><strong>TAX IMPLICATIONS</strong></span></p><ul><li><p>All borrowers should consult with a tax advisor regarding the tax consequences of accepting a Principal Reduction Modification.&#160; The terms of the Mortgage Forgiveness Debt Relief Act may apply. </p></li></ul><p><span style="font-size&#58;7px;">[1] For borrowers with mark-to-market loan-to-value (MTMLTVs) ratios over 115 percent, the Enterprises’ standard and streamlined modifications forbear post-capitalization principal (which may include arrearages) down to a 115 percent MTMLTV ratio or, if forbearance would exceed 30 percent of the post-capitalization UPB, forbear 30 percent of principal.</span></p></td></tr></tbody></table><h3></h3><p><a href="/Media/PublicAffairs/Pages/FHFA-Announces-PRM-Program-and-Further-Enhancements-to-NPL-Sales-Reqts.aspx">Related News Release</a></p>4/14/2016 6:00:49 PM882http://www.fhfa.gov/Media/PublicAffairs/Pages/Forms/AllItems.aspxhtmlFalseaspx
Enhanced Non-Performing Loan Sale Guidelines19024<p>&#160;</p><table class="ms-rteTable-default" cellspacing="0" style="width&#58;100%;"><tbody><tr class="ms-rteTableEvenRow-default"><td class="ms-rteTableEvenCol-default" rowspan="1" colspan="2" style="width&#58;75%;height&#58;565px;"><p><span class="ms-rteForeColor-9" style="font-size&#58;14px;"><strong>NON-PERFORMING LOAN SALES</strong></span></p><p><span class="ms-rteForeColor-1" style="font-size&#58;14px;"><strong>​BACKGROUND&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </strong></span></p><p>On April 14, 2016, the Federal Housing Finance Agency (FHFA) announced additional enhancements to its requirements for sales of non-performing loans (NPLs) by Freddie Mac and Fannie Mae (the Enterprises) that build on the requirements originally <a href="/Media/PublicAffairs/Pages/Non-Performing-Loan-(NPL)-Sale-Requirements.aspx"><font color="#0066cc">announced in March 2015</font></a>.&#160; </p><p>The additional requirements do the following&#58; 1) establish that NPL buyers must evaluate underwater borrowers for modifications that include principal and/or arrearage forgiveness; 2) forbid buyers from &quot;walking away&quot; from vacant homes; and 3) establish more specific proprietary loan modification standards for NPL buyers.&#160; </p><p>The new enhanced NPL sale requirements draw upon the experience of sales of NPLs over the past year.&#160; As of the end of February 2016, Fannie Mae and Freddie Mac had sold over 29,000 mortgages with a total unpaid principal balance of $5.8 billion.&#160;</p><p>FHFA believes that the sale of severely delinquent loans through NPL sales will improve borrower and neighborhood outcomes and will reduce Enterprise losses while reducing risk to taxpayers.&#160;</p><p>The loans included in NPL sales will generally be severely delinquent. &#160;Loans already sold have been, on average, three years delinquent.&#160; FHFA's goal is to achieve more favorable outcomes for the Enterprises and for borrowers by providing alternatives to foreclosure wherever possible.&#160; Reporting by servicers on borrower outcomes will be required.&#160; This will allow FHFA, the Enterprises and the public to evaluate outcomes.</p></td><td class="ms-rteTableLastCol-default" rowspan="1" style="width&#58;78%;height&#58;565px;"><p>​<strong style="font-size&#58;14px;">KEY ELEMENTS OF ENHANCED NPL SALE GUIDELINES</strong></p><p style="text-align&#58;left;"><span class="ms-rteForeColor-9">NPL buyers must evaluate borrowers whose mark-to-market loan-to-value ratio is over 115 percent for modifications that include principal reduction and/or arrearages forgiveness.</span></p><div style="text-align&#58;left;"><span class="ms-rteForeColor-9"><font face="Times New Roman" size="3"></font> </span></div><p style="text-align&#58;left;"><span class="ms-rteForeColor-9">NPL buyers may not “walk away” from vacant properties.</span></p><div style="text-align&#58;left;"><span class="ms-rteForeColor-9"><font face="Times New Roman" size="3"></font> </span></div><p style="text-align&#58;left;"><span class="ms-rteForeColor-9">Proprietary modifications must be fixed rate or offer an initial period of reduced payments with limits on subsequent increases consistent with HAMP requirements – the initial fixed-rate period must last for at least 5 years, and rate increases are limited to 1 percent per year thereafter.</span></p><p>&#160;</p></td></tr><tr class="ms-rteTableOddRow-default"><td class="ms-rteTableLastCol-default" rowspan="1" colspan="3" style="width&#58;100%;"><span class="ms-rteForeColor-1" style="font-size&#58;14px;"><strong>ENHANCED NPL SALE GUIDELINES </strong></span><ul><li><p><strong>Bidder qualifications</strong>&#58;&#160;Bidders will be required to identify their servicing partners at the time of qualification and must complete a servicing questionnaire to demonstrate a record of successful resolution of loans through alternatives to foreclosure; </p></li><li><p><strong>Modification requirements&#58;&#160;</strong></p></li><ul><li><p>The new servicer will be required to evaluate all borrowers whose loans were originated on or before January 1, 2009 (other than those whose foreclosure sale date is imminent or whose property is vacant) for the U.S. Department of the Treasury's Home Affordable Modification Program (HAMP).&#160; All borrowers whose loans were originated after January 1, 2009 (other than those with an imminent foreclosure sale date or vacant property) must be evaluated for a proprietary modification.&#160; </p></li><li><p>For borrowers with a mark-to-market loan-to-value ratio above 115 percent, servicers will be required to evaluate these borrowers for loan modifications (HAMP or proprietary) that include principal and/or&#160;arrearage forgiveness.&#160; Servicers may consider net present value to the investor in establishing the waterfall for implementation.</p></li><li><p>Proprietary modifications must not include an upfront fee or require prepayment of any amount of mortgage debt, and must provide a benefit to the borrower with the potential for a sustainable modification.&#160; They must either be fixed rate for the term of the modification or offer an initial period of reduced payments with limits on subsequent increases consistent with HAMP requirements – the initial period must last for at least 5 years and interest rate increases may not exceed 1 percent per year thereafter.</p></li></ul><li><p><strong>Loss mitigation waterfall requirements&#58;&#160;</strong>Servicers must apply a waterfall of resolution tactics that includes evaluating borrower eligibility for a loan modification (HAMP and/or proprietary modification) first, then a short sale or a deed-in-lieu of foreclosure.&#160; Foreclosure must be the last option in the waterfall.&#160; The waterfall may consider net present value to the investor;&#160; </p></li><li><p><strong>No &quot;walkaways&quot;&#58; </strong>If a property securing a loan is vacant, buyers and servicers may not abandon the lien and &quot;walk away&quot; from the property.&#160; Instead, if a foreclosure alternative is not possible, the servicer must complete a foreclosure or must sell or donate the loan, including to a government or non-profit entity;</p></li><li><p><strong>REO sale requirements&#58;</strong>&#160;Servicers are encouraged to sell properties that have gone through foreclosure and entered Real Estate Owned (REO) status to individuals who will occupy the property as their primary residence or to non-profits.&#160; For the first 20 days after any NPL that becomes an REO property is marketed, the property may be sold only to buyers who intend to occupy the property as their primary residence or to non-profits;</p></li><li><p><strong>Subsequent servicer requirements&#58;</strong>&#160;Subsequent servicers must assume all the responsibilities of the initial servicer;</p></li><li><p><strong>Bidding transparency&#58;&#160;</strong>To facilitate transparency of the NPL sales program and encourage robust participation by all interested participants, each Enterprise has developed a process for announcing upcoming NPL sale offerings.&#160; This includes an NPL webpage on the Enterprise's website, email distribution to small, non-profit and minority- and women-owned business (MWOB) investors, and proactive outreach to potential bidders;</p></li><li><p><strong>Small pools&#58;</strong> The Enterprises will offer small, geographically concentrated pools of NPLs, where feasible, to maximize opportunities for nonprofit organizations and MWOBs to purchase NPLs.&#160; The Enterprises will actively market such offerings to nonprofits and MWOBs and provide additional time for buyers to complete the transaction;</p></li><li><p><strong>Reporting requirements&#58;</strong> NPL buyers and servicers, including subsequent servicers, are required to report loan resolution results and borrower outcomes to the Enterprises for four years after the NPL sale.&#160; These reports will help FHFA and the public evaluate the NPL program results and determine whether an NPL buyer and NPL servicer continue to be eligible for future sales based on pool level borrower outcomes, adjusted for subsequent market events.&#160; Consistent with applicable law, FHFA and/or the Enterprises will provide public reports on aggregate borrower outcomes at the pool level.</p></li></ul><p><a href="/Media/PublicAffairs/Pages/FHFA-Announces-PRM-Program-and-Further-Enhancements-to-NPL-Sales-Reqts.aspx">Related News Release</a></p> </td></tr></tbody></table><p>&#160;</p> <h3></h3>4/14/2016 6:00:29 PM329http://www.fhfa.gov/Media/PublicAffairs/Pages/Forms/AllItems.aspxhtmlFalseaspx
FHFA's Update on Private Label Securities Actions11066<p>​​​​In 2011, the Federal Housing Finance Agency initiated litigation against 18 financial institutions involving allegations of securities law violations and, in some instances, fraud in the sale of private-label securities (PLS) to Fannie Mae and Freddie Mac.&#160;​ Below is a list of the cases, with amounts of any settlements reached in 2013 and 2014.&#160; Settlement amounts result from various factors, including statutory requirements, number of securities, unique circumstances of each matter and litigation risks. </p><table width="100%" class="ms-rteTable-6" cellspacing="0"><tbody><tr class="ms-rteTableEvenRow-6" style="text-align&#58;center;"><td class="ms-rteTableEvenCol-6" colspan="2"> <strong>​PLS Litigation Settlements ​</strong> </td></tr><tr class="ms-rteTableOddRow-6"><td class="ms-rteTableEvenCol-6">​1. General Electric Company </td><td width="25%" class="ms-rteTableOddCol-6">$6.25 million </td></tr><tr class="ms-rteTableEvenRow-6"><td class="ms-rteTableEvenCol-6">2. CitiGroup Inc. </td><td class="ms-rteTableOddCol-6">​$250 million </td></tr><tr class="ms-rteTableOddRow-6"><td class="ms-rteTableEvenCol-6">​3. UBS Americas, Inc. (Union Bank of Switzerland) </td><td class="ms-rteTableOddCol-6">​$885 million </td></tr><tr class="ms-rteTableEvenRow-6"><td class="ms-rteTableEvenCol-6">​4. J.P. Morgan Chase &amp; Co. </td><td class="ms-rteTableOddCol-6">​$4 billion </td></tr><tr class="ms-rteTableOddRow-6"><td class="ms-rteTableEvenCol-6">​5. Deutsche Bank AG </td><td class="ms-rteTableOddCol-6">$1.925 billion </td></tr><tr class="ms-rteTableEvenRow-6"><td class="ms-rteTableEvenCol-6">6. Ally Financial, Inc. </td><td class="ms-rteTableOddCol-6">$475 million </td></tr><tr class="ms-rteTableOddRow-6"><td class="ms-rteTableEvenCol-6">7. Morgan Stanley </td><td class="ms-rteTableOddCol-6">$1.25 billion </td></tr><tr class="ms-rteTableEvenRow-6"><td class="ms-rteTableEvenCol-6">8. SG Americas (Societe Generale) </td><td class="ms-rteTableOddCol-6">$122 million </td></tr><tr class="ms-rteTableOddRow-6"><td class="ms-rteTableEvenCol-6" rowspan="1">9. Credit Suisse Holdings (USA) Inc. </td><td class="ms-rteTableOddCol-6" rowspan="1">$885 million </td></tr><tr class="ms-rteTableEvenRow-6"><td class="ms-rteTableEvenCol-6" rowspan="1">10. Bank of America Corp. <br>11. Merrill Lynch &amp; Co. <br>12. Countrywide Financial Corporation </td><td class="ms-rteTableOddCol-6" rowspan="1"> <br>$5.83 billion </td></tr><tr class="ms-rteTableOddRow-6"><td class="ms-rteTableEvenCol-6" rowspan="1">​13. Barclays Bank PLC </td><td class="ms-rteTableOddCol-6" rowspan="1">$280 million </td></tr><tr class="ms-rteTableEvenRow-6"><td class="ms-rteTableEvenCol-6" rowspan="1">​14. First Horizon National Corp.</td><td class="ms-rteTableOddCol-6" rowspan="1">​$110 million</td></tr><tr class="ms-rteTableOddRow-6"><td class="ms-rteTableEvenCol-6" rowspan="1">​15. RBS Securities, Inc.&#160;<span style="line-height&#58;14px;font-style&#58;normal;font-variant&#58;normal;background-color&#58;#c0e4ff;">(in Ally action)</span></td><td class="ms-rteTableOddCol-6" rowspan="1">​​$99.5 million</td></tr><tr class="ms-rteTableEvenRow-6"><td class="ms-rteTableEvenCol-6" rowspan="1">​16. Goldman Sachs &amp; Co.</td><td class="ms-rteTableOddCol-6" rowspan="1">​$1.2 billion</td></tr><tr class="ms-rteTableOddRow-6"><td class="ms-rteTableEvenCol-6" rowspan="1">​17. HSBC North America Holdings, Inc.&#160;(Hong Kong Shanghai Banking Corp.)</td><td class="ms-rteTableOddCol-6" rowspan="1">​​$550 million</td></tr></tbody></table><p>&#160;</p><table width="100%" class="ms-rteTable-6 " cellspacing="0" style="height&#58;57px;"><tbody><tr class="ms-rteTableEvenRow-6"><td class="ms-rteTableEvenCol-6" colspan="2" style="width&#58;788px;height&#58;15px;text-align&#58;center;">​<strong>​​Non-Litigation PLS Settlements​</strong></td></tr><tr class="ms-rteTableOddRow-6"><td class="ms-rteTableEvenCol-6" style="width&#58;591px;">​Wells Fargo Bank, N.A.</td><td class="ms-rteTableOddCol-6" style="width&#58;197px;">​$335.23 million</td></tr></tbody></table><p>&#160;</p><table width="100%" class="ms-rteTable-6" cellspacing="0"><tbody><tr class="ms-rteTableEvenRow-6"><td class="ms-rteTableEvenCol-6" colspan="2" style="width&#58;50%;text-align&#58;center;">​<strong>Remaining PLS Cases ​</strong> ​ ​</td></tr><tr class="ms-rteTableOddRow-6"><td class="ms-rteTableEvenCol-6" colspan="2">​<em>Southern District of New York Cases</em>&#58; ​</td></tr><tr class="ms-rteTableEvenRow-6"><td class="ms-rteTableEvenCol-6" colspan="2"> *Nomura Holding America, Inc.&#160; <p>*Case litigated in spring 2015, FHFA prevailed, now on appeal to United States Court of Appeals for the Second Circuit.</p></td></tr><tr class="ms-rteTableOddRow-6"><td class="ms-rteTableEvenCol-6" colspan="2"> <em>​​District of Connecticut Case&#58;</em></td></tr><tr class="ms-rteTableEvenRow-6"><td class="ms-rteTableEvenCol-6" colspan="2">The Royal Bank of Scotland Group, PLC&#160; ​</td></tr></tbody></table>1/4/2016 8:06:27 PM14871http://www.fhfa.gov/Media/PublicAffairs/Pages/Forms/AllItems.aspxhtmlFalseaspx
FHFA Proposed Rule On Fannie Mae & Freddie Mac Duty to Serve Underserved Markets14787<h4>Background</h4><p></p><p>On December 15, 2015, FHFA issued a proposed rule on Fannie Mae and Freddie Mac Duty to Serve Underserved Markets.</p><p>The public comment period is 90 days from publication in the Federal Register.</p><p>FHFA invites comments on all aspects of the proposed rule.</p><p>FHFA issued an Advance Notice of Proposed Rulemaking in 2009 and a&#160;<span style="line-height&#58;22px;">Notice of Proposed Rulemaking in 2010 but&#160;</span><span style="line-height&#58;22px;">did not complete the rulemaking process.</span></p><h4>Summary</h4><p><strong>​Statutory Requirement&#160;<br></strong><span style="line-height&#58;22px;">Federal law requires the Federal Housing Finance Agency (FHFA) to issue a regulation to implement the Duty to Serve requirements specified in the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended by the Housing and Economic Recovery Act of 2008. &#160;The statute requires Fannie Mae and Freddie Mac (the Enterprises) to provide leadership to facilitate a secondary market for mortgages on housing for very low-, low-, and moderate-income families in three underserved markets specified in the statute&#58;</span></p><ul><li><span style="line-height&#58;22px;">Manufactured housing</span><br></li><li><span style="line-height&#58;22px;">Af</span><span style="line-height&#58;22px;">fordable housing preservation&#160;</span><br></li><li><span style="line-height&#58;22px;">Rural housing</span><br></li></ul><p>FHFA has issued a proposed rule that seeks to strike a balance between the requirement that the Enterprises serve families in these markets and their continued safety and soundness.</p><div><p><strong>Underserved Markets Plans&#160;</strong><br><span style="line-height&#58;22px;">Under the proposed rule, the Enterprises would each be required to submit to FHFA a draft Underserved Markets Plan covering a three-yea</span><span style="line-height&#58;22px;">r period, and the public would be invited to provide input on the draft Plans. &#160;The draft Plans would be posted on FHFA’s website, and the final Plans would be posted on the Enterprises’ and FHFA’s respective websites. &#160;</span></p><p>The Plans would comprise “<strong>Activities</strong><strong>,</strong>” including <strong>Core Activities</strong> that the Enterprises would be required to consider in developing their Plans. &#160;The Core Activities represent nine categories of <strong>Statutory Activities </strong>and eleven categories of <strong>Regulatory Activities</strong> developed by FHFA. &#160;The Enterprises could also propose <strong>Additional Activities </strong>in their Plans. &#160;Eligible Activities would receive Duty to Serve credit (scoring points). &#160;If Fannie Mae or Freddie Mac decides not to include a Core Activity in its Plan, it would be required to provide reasons why in the Plan.&#160;</p><p>FHFA would also provide Duty to Serve credit for Fannie Mae or Freddie Mac activities that promote residential economic diversity in an underserved market for affordable housing in high opportunity areas or mixed-income housing in areas of concentrated poverty.</p><div><p><strong>Manufactured Housing</strong><br><span style="line-height&#58;22px;">For the manufactured housing market, Duty to Serve credit would be provided for Regulatory Activities that Fannie Mae and Freddie Mac undertake related to financing manufactured housing units titled as real estate and not “chattel” loans secured by personal property, because real estate loans perform better, have greater borrower protections, and have lower default rates than chattel financing. &#160;However, the proposed rule invites public comment on whether the final rule should authorize Duty to Serve credit for the purchase of chattel loans. &#160;</span></p><p>Under the proposed rule, Fannie Mae and Freddie Mac would also be required to consider undertaking Regulatory Activities related to purchasing blanket loans on the following types of manufactured housing communities&#58; &#160;small communities with 150 rental sites or fewer; communities owned by their residents, nonprofits or governmental agencies; and communities where tenants’ site leases include certain tenant protections.</p><p><strong>Affordable Housing Preservation</strong><br><span style="line-height&#58;22px;">For affordable housing preservation, Duty to Serve credit would be provided for Statutory Activities that Fannie Mae and Freddie Mac undertake related to preservation of affordable housing funded under the following programs enumerated in the statute&#58; &#160;</span></p><ul><li><span style="line-height&#58;22px;">U.S. Department of Housing &amp; Urban Development (HUD) Section 8 Rental Assistance Program;</span><br></li><li><span style="line-height&#58;22px;">HUD Section 236 Interest Rate Subsidy Program;</span><br></li><li><span style="line-height&#58;22px;">HUD Section 221(d)(4) FHA Insurance Program;</span><br></li><li><span style="line-height&#58;22px;">HUD Section 202 Housing Program for Elderly Households;</span><br></li><li><span style="line-height&#58;22px;">HUD Section 811 Housing Program for Disabled Households;</span><br></li><li><span style="line-height&#58;22px;">McKinney-Vento Homeless Assistance Programs;</span><br></li><li><span style="line-height&#58;22px;">USDA Section 515 Rural Housing Programs;</span><br></li><li><span style="line-height&#58;22px;">Federal Low-Income Housing Tax Credits; and</span><br></li><li><span style="line-height&#58;22px;">Other comparable state and local affordable housing programs.</span><br></li></ul><p>Duty to Serve credit would also be provided for Regulatory Activities that Fannie Mae and Freddie Mac undertake related to purchasing loan pools from small banks and community-based lenders on small multifamily rental properties of 5 to 50 units; Activities related to public housing properties that use HUD’s Rental Assistance Demonstration Program; Activities related to properties in designated areas under HUD’s Choice Neighborhoods Initiatives Program; purchasing energy efficiency retrofit loans on multifamily rental properties; and purchasing energy retrofit loans on single-family properties with Fannie Mae or Freddie Mac first mortgage liens.</p><p>Fannie Mae and Freddie Mac would also be required to consider undertaking Regulatory Activities that support preserving affordable homeownership for single-family properties under shared equity programs that are administered by a community land trust, a nonprofit organization or a state or local governmental agency. &#160;Eligible shared equity programs must ensure affordability for 30 years -- or longer if permitted by state law, monitor the units to ensure affordability is preserved over resales, and support the homeowners to promote successful homeownership.</p><p><strong>Rural Housing</strong><br><span style="line-height&#58;22px;">For the rural housing market, Duty to Serve credit would be provided for Activities that serve rural areas generally. &#160;Duty to Serve credit would also be provided for Regulatory Activities supporting housing in high-needs rural regions, defined as Middle Appalachia, the Lower Mississippi Delta region, and colonias, which are communities located primarily within 150 miles of the U.S.-Mexico border in Arizona, New Mexico, Texas, or California; and Activities supporting housing for high-needs rural populations defined as members of a Federally recognized Native American tribe located in a Native American area, or migrant or seasonal agricultural workers, as defined in the proposed rule. &#160;The proposed rule would define a “rural area” as a census tract outside of a Metropolitan Statistical Area (MSA) as designated by the Office of Management and Budget, or a census tract in an MSA, but outside of the MSA’s Urbanized Areas and Urban Clusters, as designated by the U.S. Department of Agriculture’s Rural Urban Commuting Area codes.</span></p><p><strong>​Evaluations and Ratings</strong><br><span style="line-height&#58;22px;">FHFA would annually evaluate and rate Fannie Mae and Freddie Mac’s performance under their Underserved Markets Plans by allocating points for each Activity performed and translating the composite scores to overall ratings for each of the three underserved markets. &#160;FHFA would report those results to Congress on an annual basis.&#160;</span></p><p><a href="/Media/PublicAffairs/Pages/FHFA-Issues-Proposed-Rule-on-Fannie-Mae-and-Freddie-Mac-Duty-to-Serve-Underserved-Markets.aspx">Related&#160;News Release</a>​</p></div></div>12/15/2015 4:30:53 PM2772http://www.fhfa.gov/Media/PublicAffairs/Pages/Forms/AllItems.aspxhtmlFalseaspx
Neighborhood Stabilization Initiative Program Expansion Fact Sheet19069<p>​<strong style="line-height&#58;22px;font-family&#58;&quot;source sans pro&quot;, sans-serif;font-size&#58;14px;">​​​​​​​NSI Pilots – Background</strong></p><p>​The Neighborhood Stabilization Initiative (NSI) was jointly developed by the Federal Housing Finance Agency (FHFA) and Fannie Mae and Freddie Mac to stabilize neighborhoods that were hardest hit by the housing downturn and reduce the inventory of real estate owned (REO) properties held by Fannie Mae and Freddie Mac. NSI began as a pilot program in the city limits of Detroit, Michigan in May 2014 and was expanded to Cook County, Illinois in April 2015. </p><p>Fannie Mae and Freddie Mac will continue to work with the <a href="http&#58;//www.stabilizationtrust.com/" target="_blank">National Community Stabilization Trust (NCST)​</a>, a national nonprofit organization experienced in stabilization efforts for distressed communities. NCST has ties to community organizations and local nonprofits that have a vested interest in their communities.</p><p> <strong>NSI Pilots – Lessons Learned</strong></p><ul><li> <span style="line-height&#58;22px;">Critical for success are partnerships with local community buyers and the exclusive opportunity for these buyers to purchase REO properties prior to Fannie Mae and Freddie Mac listing them for retail sale.</span><br></li><li> <span style="line-height&#58;22px;">The </span> <strong style="line-height&#58;22px;font-family&#58;&quot;source sans pro&quot;, sans-serif;font-size&#58;14px;"> <em>Enhanced First Look </em></strong> <span style="line-height&#58;22px;">process is an effective tool to responsibly dispose of REO properties and stabilize </span> <span style="line-height&#58;22px;">n​eighborhoods.</span><br></li><li> <span style="line-height&#58;22px;">Expansion of NSI to multiple cities at one time benefits hardest hit communities most quickly and achieves maximum effectiveness vs. city-by-city expansion.&#160;</span><span style="line-height&#58;22px;">​</span><br></li></ul><p> <strong>NSI Expansion – Program Elements</strong></p><p>Building on the lessons learned from the Detroit and Cook County pilots, Fannie Mae and Freddie Mac will partner with NCST to expand NSI to 18 different metropolitan statistical areas (MSAs) with high volumes of low-value REO inventory. The expanded NSI program is effective beginning December 1, 2015. </p><p>NSI expansion focuses on REO properties and capitalizes on the <strong> <em>Enhanced First Look </em></strong>principles utilized in Detroit and Cook County. Fannie Mae and Freddie Mac foreclosed properties that have not been listed for public sale on or after December 1, 2015 will be presented to eligible NCST community buyers for purchase review. NCST buyers will have up to 12 business days to express interest in a property and agree on a price before the property is made publicly available for purchase. During this <strong> <em>Enhanced First Look </em></strong>period, NCST community buyers evaluate the property and determine whether they wish to purchase the property for sale or rent, or, in some cases, for demolition. Single family structures, including condominiums, town homes, and 2-4 unit properties, are eligible for <strong> <em>Enhanced First Look</em></strong>. </p><p>The sales price for properties offered during <strong> <em>Enhanced First Look </em></strong>will reflect fair market values that take into account savings in marketing, upkeep, utilities, and taxes – all costs Fannie Mae and Freddie Mac would have paid if the property sold during standard REO inventory disposition, rather than through the <strong> <em>Enhanced First Look </em></strong>process. Fannie Mae and Freddie Mac may also contribute funds for demolition of certain properties, based on market costs.</p> <font color="#000000" face="Times New Roman" size="3"> </font> <p style="margin&#58;0in 0in 0pt;"> <span style="color&#58;#404040;font-family&#58;arial, sans-serif;font-size&#58;10.5pt;"><strong>NSI Expansion –&#160;Key Elements</strong></span></p><ul><li><p>Fannie Mae and Freddie Mac will work with NCST. </p></li><li><p>NCST community buyers have exclusive opportunity to buy foreclosed properties prior to being listed for sale to the public. </p></li><li><p>Properties will be sold at fair market value, which includes discounts for expenses saved through a quicker sale. </p></li><li><p>Expansion will be in 18 selected MSAs simultaneously.</p></li></ul><p style="margin&#58;0in 0in 0pt;"> <span style="color&#58;#404040;font-family&#58;arial, sans-serif;font-size&#58;10.5pt;"></span> </p><p> <strong>NSI Expansion – Selected Markets</strong></p><p>The selection of markets for NSI expansion was based on MSAs where Fannie Mae and Freddie Mac each had at least 100 REO properties valued at less than $75,000. However, once expansion of NSI is in effect, properties in these MSAs valued up to $175,000 will be eligible for the program. Below is an <a href="/PolicyProgramsResearch/Programs/Pages/NSI-Expansion-Map.aspx" target="_blank">interactive map</a> indicating each of the 18 MSAs included in the NSI expansion.</p><p style="text-align&#58;center;"> <a href="/PolicyProgramsResearch/Programs/Pages/NSI-Expansion-Map.aspx" target="_blank"><img class="ms-rtePosition-4" src="/PolicyProgramsResearch/Programs/PublishingImages/Pages/Neighborhood-Stabilization-Initiative-(NSI)/NSI_Expansion_Map_092015.png" alt="" style="margin&#58;5px;width&#58;700px;" /></a>&#160;</p><p> <br>&#160;</p><p style="text-decoration&#58;underline;">​<strong>List of Selected MSAs</strong><br></p><table class="ms-rteTable-0" cellspacing="0" style="width&#58;100%;height&#58;250px;"><tbody><tr class="ms-rteTableEvenRow-0"><td class="ms-rteTableEvenCol-0" style="width&#58;33.33%;"><ul><li> <span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">Akron, OH</span><br></li></ul></td><td class="ms-rteTableOddCol-0" style="width&#58;33.33%;"><ul><li> <span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">​Atlanta-Sandy Springs-Roswell, GA</span><br></li></ul></td><td class="ms-rteTableEvenCol-0" style="width&#58;33.33%;"><ul><li> <span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">​Baltimore-Columbia-Towson, MD</span><br></li></ul></td></tr><tr class="ms-rteTableOddRow-0"><td class="ms-rteTableEvenCol-0"><ul><li> <span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">​Chicago-Naperville-Elgin, IL​</span><br></li></ul></td><td class="ms-rteTableOddCol-0"><ul><li> <span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">​</span><span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">​</span><span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">Cincinnati, OH-KY-IN</span><br></li></ul></td><td class="ms-rteTableEvenCol-0"><ul><li> <span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">​</span><span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">Cleveland-Elyria, OH</span><br></li></ul></td></tr><tr class="ms-rteTableEvenRow-0"><td class="ms-rteTableEvenCol-0"><ul><li> <span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">​Columbus, OH</span><br></li></ul></td><td class="ms-rteTableOddCol-0"><ul><li> <span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">​Dayton, OH</span><br></li></ul></td><td class="ms-rteTableEvenCol-0"><ul><li> <span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">​Detroit-Warren-Dearborn, MI</span><br></li></ul></td></tr><tr class="ms-rteTableOddRow-0"><td class="ms-rteTableEvenCol-0"><ul><li> <span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">​Jackson</span><span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">ville, FL</span><br></li></ul></td><td class="ms-rteTableOddCol-0"><ul><li> <span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">​</span><span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">Miami-Fort Lauderdale-West Palm Beach, FL</span><br></li></ul></td><td class="ms-rteTableEvenCol-0"><ul><li> <span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">​</span><span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">New York-Newark-Jersey City, NY-NJ-PA</span><br></li></ul></td></tr><tr class="ms-rteTableEvenRow-0"><td class="ms-rteTableEvenCol-0"><ul><li> <span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">​</span><span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">​</span><span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">Orlando-Kissimmee-Sanford, FL</span><br></li></ul></td><td class="ms-rteTableOddCol-0"><ul><li> <span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">​</span><span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">Philadelphia-Camden-Wilmington, PA-NJ-DE</span><br></li></ul></td><td class="ms-rteTableEvenCol-0"><ul><li> <span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">​</span><span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">Pittsburgh, PA</span><br></li></ul></td></tr><tr class="ms-rteTableOddRow-0"><td class="ms-rteTableEvenCol-0"><ul><li> <span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">​</span><span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">St. Louis,</span><span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;"> M</span><span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">O</span><br></li></ul></td><td class="ms-rteTableOddCol-0"><ul><li> <span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">​</span><span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">Tampa-St. Petersburg-Clearwater, FL</span><br></li></ul></td><td class="ms-rteTableEvenCol-0"><ul><li> <span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">​</span><span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">Toledo, OH</span><br>​</li></ul></td></tr></tbody></table><p>The number of REO properties owned by Fannie Mae and Freddie Mac is declining and approaching pre-crisis levels in some states. At the national level, the REO inventory of Fannie Mae and Freddie Mac has declined from its 3Q10 peak of nearly 250,000 properties to roughly 77,000 as of 3Q15, as dispositions outpace acquisitions. However, in some areas of the country REO inventory continues to increase or remains elevated. Some particular markets have large concentrations of distressed and low-value REO properties. </p> <font color="#000000" face="Times New Roman" size="3"> </font> <p>Given the unique challenges presented by these markets, Fannie Mae and Freddie Mac partnered with NCST to leverage their ties to “boots on the ground” community organizations and local nonprofits, and work closely with local governments to make timely and informed decisions about the best treatment of individual properties.</p><p> <a href="/Media/PublicAffairs/Pages/FHFA-Announces-Expansion-of-Neighborhood-Stabilization-Initiative.aspx">Related News Release</a></p> <font color="#000000" face="Times New Roman" size="3"> </font>6/27/2016 2:33:43 PM5027http://www.fhfa.gov/Media/PublicAffairs/Pages/Forms/AllItems.aspxhtmlFalseaspx
Results of Fannie Mae and Freddie Mac Guarantee Fee Review17707<p> <span style="line-height&#58;22px;text-decoration&#58;underline;"><strong>​​​​Summary</strong></span><span style="line-height&#58;22px;"> – The Federal Housing Finance Agency (FHFA) has completed a comprehensive review of the agency's policy for guarantee fees charged by Fannie Mae and Freddie Mac (the Enterprises).</span><span style="line-height&#58;22px;">&#160; </span> <span style="line-height&#58;22px;">FHFA's review considered multiple factors, including responses to the agency's June 2014 request for public input, analyses by housing finance market participants of the implied guarantee fee pricing from the Enterprises' credit risk transfers, and internal analyses of Enterprise pricing, credit guarantee loss data, and modeling.</span></p><p>FHFA's review focused on reaching an appropriate balance between FHFA's statutory obligations to&#58; 1) ensure the safety and soundness of the Enterprises, and 2) foster a liquid national housing finance market.&#160; In light of this balance, FHFA determined, based on both internal and external analysis, that the current average level of guarantee fees appropriately reflects the current costs and risks associated with providing the Enterprises' credit guarantee.&#160; </p><p>As a result, FHFA finds no compelling economic reason to change the general level of fees.&#160; FHFA, however, is making certain minor and targeted fee adjustments.&#160; To implement these decisions, the agency is directing the Enterprises to make changes to their guarantee fees that will slightly reduce, maintain, or increase costs for different categories of loans.&#160; Since all of the guarantee fee changes are small, the agency does not expect the adjustments to cause any material changes to the Enterprises' loan volume in any of the loan categories and expects the small changes to be revenue neutral.</p><p>The guarantee fee adjustments directed by FHFA fall into two categories&#58;</p> <span style="line-height&#58;16px;"> <ul><li> <span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;line-height&#58;16px;">First, </span> <span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;line-height&#58;16px;">the foundational adjustment is removing the 25 basis point upfront adverse market charge.</span><span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;line-height&#58;16px;">&#160; </span> <span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;line-height&#58;16px;">The Enterprises established this fee in 2008 as an on-top pricing increase to reflect the unfavorable condition of the national housing market at that time.</span><span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;line-height&#58;16px;">&#160; </span> <span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;line-height&#58;16px;">FHFA believes it is appropriate to remove this housing crisis-era fee in light of improvements in the housing markets.</span><span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;line-height&#58;16px;">&#160; The agency is also setting aside its December 2013 decision to retain the adverse market charge in certain states with higher than average foreclosure related costs.</span><span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;line-height&#58;22px;">&#160;</span><br></li><li> <span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;line-height&#58;16px;">Second, </span> <span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;line-height&#58;16px;">the agency is applying targeted and small fee adjustments to a subset of Enterprise loans.</span><span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;line-height&#58;16px;">&#160; </span> <span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;line-height&#58;16px;">This includes small fee increases for certain loans in the Enterprises' upfront loan-to-value (LTV) ratio/credit score pricing grid and for certain loans with risk-layering attributes (i.e., cash-out refinances, investment</span><span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;line-height&#58;16px;">&#160;properties, loans with secondary financing, and jumbo conforming loans).</span><br></li></ul></span> <p> <span style="text-decoration&#58;underline;"><strong>How the Enterprises Determine Guarantee Fees</strong></span> – The Enterprises acquire single-family loans from lenders and securitize them in the form of mortgage-backed securities (MBS).&#160; For investor-held MBS, the Enterprises guarantee timely payment of principal and interest to the investor.&#160; Guarantee fees cover three cost components that the Enterprises expect to incur in providing their guarantee.&#160; They are&#58; 1) the expected costs that result from the failure of some borrowers to make their payments; 2) the cost of holding the modeled capital amount necessary to protect against potentially much larger unexpected losses that result from the failure of some borrowers to make their payments in a severe stress environment; and 3) general and administrative expenses.&#160; Collectively, these costs comprise the estimated cost of providing the credit guarantee.</p><p>Of these three components, the second (cost of capital) is by far the most significant.&#160; Despite the Enterprises' inability to retain capital under the Senior Preferred Stock Purchase Agreements (PSPAs) entered into with the U.S. Department of the Treasury in 2008, FHFA has established guarantee fee levels consistent with the amount of capital the Enterprises would need to support their guarantee businesses if they were not in conservatorship and retained capital.&#160; </p><p> <span style="text-decoration&#58;underline;"> <strong>How Guarantee Fees Impact Borrowers</strong></span> – As compensation for providing the guarantee on MBS, the Enterprises charge lenders guarantee fees.&#160; &#160;The Enterprises charge lenders a base, or ongoing, fee that is primarily based on the product type (e.g., 30-year Fixed Rate, 15-year Fixed Rate, 5/1 ARM).&#160; The Enterprises also charge upfront guarantee fees, also known as loan level pricing adjustments (LLPAs) or delivery fees, that are based on certain risk attributes of the borrower or the loans (e.g., LTV/credit-score grid, cash-out refinance, investor properties, secondary financing at origination, jumbo conforming loan).&#160; While the Enterprises assess LLPAs or delivery fees as an upfront fee, most lenders convert them into the interest rate on the mortgage, which the borrowers pay over time, like ongoing guarantee fees.[1]&#160;Together, ongoing guarantee fees and LLPAs/delivery fees make up the Enterprises' total compensation for providing the credit guarantee.&#160; In addition, since 2008, each Enterprise has assessed an adverse market charge as a surcharge for challenging housing market conditions.</p><p> <span style="text-decoration&#58;underline;"><strong>FHFA Review of Capital Adequacy</strong></span> – In performing its review of guarantee fees, FHFA evaluated appropriate levels of required capital and target rates of return.&#160; In doing so, the agency reviewed Fannie Mae and Freddie Mac's capital and credit models.&#160; FHFA also independently compared the Enterprises' most recent loan acquisition profile with the actual losses experienced on similar loans from the recent crisis.&#160; </p><p>In addition, the agency considered analytical reports by firms in the financial services industry about the Enterprises' credit risk transfer transactions.&#160; The reports assess the implied level of guarantee fees based on the pricing of an early 2015 Freddie Mac credit risk transfer (STACR) transaction, and most conclude that the Enterprises' current level of fees is appropriate.&#160; Similarly, some public response letters and industry reports, which are based on the respondents' own capital and rate of return assumptions, asked FHFA to either maintain or modestly lower guarantee fees from their current levels.</p><p>As a result of FHFA's review of guarantee fee levels, the agency concludes that the current guarantee fee level is appropriate under current circumstances.</p><p> <span style="text-decoration&#58;underline;"><strong>Elimination of the Adverse Market Charge</strong></span> – Each Enterprise instituted an adverse market charge in 2008 to compensate for their credit risk models not adequately assessing the extra costs and risks from the difficult market conditions and declining house prices at that time.&#160; That justification no longer applies.&#160; The housing market has improved significantly in recent years, and the Enterprises' credit risk models now incorporate the experience of the recent crisis.</p><p>As described above, FHFA's analysis concludes that the current average level of guarantee fees is appropriate based on current assessments of cost and risk. &#160;Because these average guarantee fees currently include the adverse market charge, removing this fee component necessitates other guarantee fee adjustments.&#160; As a result, FHFA is directing the Enterprises to replace the revenue attributable to the adverse market charge with targeted changes in fees that address various risk-based and access-to-credit considerations.&#160; Overall, FHFA expects these changes to be revenue neutral to the Enterprises based on their recent mix of business.</p><p> <span style="text-decoration&#58;underline;"><strong>Set Aside of State-Level Pricing</strong></span> – When FHFA announced its decision to eliminate the adverse market charge in December 2013, the elimination was for all states except Connecticut, Florida, New Jersey, and New York.&#160; The adverse market charge would have been unchanged in those four states to compensate, approximately, for the difference in the foreclosure timeline related costs relative to average costs across the country.&#160; </p><p>Although foreclosure costs are significantly higher in these four states compared to other states, the agency is setting aside the previous decision to implement these geographically based fees.&#160; FHFA will explore opportunities to engage with states to better understand the reasons for longer foreclosure timelines and to share with sta​tes the cost implications to the Enterprises as well as potential impacts to borrowers.&#160; At the same time, FHFA will continue to work toward finding an appropriate balance between allowing sufficient time for borrowers to obtain loss mitigation alternatives and ensuring timely resolution of foreclosures. </p><p> <span style="text-decoration&#58;underline;"> <strong>Targeted Fee Adjustments</strong></span> – The decision to eliminate the adverse market charge yet maintain the overall average level of guarantee fees required a plan to recover this revenue.&#160; The set of targeted adjustments to guarantee fees described below only apply to the Enterprises' upfront fees and do not affect base, ongoing guarantee fees.&#160; The fee changes will become effective for loans delivered to the Enterprises beginning on September 1, 2015.&#160; The agency does not expect a material change in the Enterprises' loan volume as a result of these changes.</p><p>The targeted fee adjustments include the following categories&#58;</p><ul><li> <span style="text-decoration&#58;underline;"><strong>LTV/Credit Score Grid</strong></span> – In the Enterprises' LTV/credit score grids, which apply to loans with terms exceeding 15 years, FHFA is directing the Enterprises to increase the upfront fees by 25 basis points for loans that have both an LTV ratio of 80 percent or less and credit-score of 700 or more.[2]&#160;&#160;</li></ul><p>For loans that have an LTV ratio above 80 percent or a credit score below 700, FHFA is generally leaving the upfront fees the same.[3]&#160;As a result, these loans will receive the full benefit of the 25 basis point adverse market charge elimination.&#160; Contributing to the determination to leave the upfront fees the same for this LTV/credit score group is FHFA's separate action to finalize new standards for mortgage insurers – Private Mortgage Insurer Eligibility Requirements (PMIERs).&#160; Loans with less than a 20 percent down payment are required to have credit enhancement, which lenders typically satisfy with private mortgage insurance.&#160; FHFA anticipates that the finalized PMIERs will provide a modest cost savings to the Enterprises from reduced mortgage insurer counterparty exposure.</p><ul><li> <span style="text-decoration&#58;underline;"><strong>Cash-Out Refinances, Investment Properties, and Loans with Secondary Financing</strong></span> FHFA is directing the Enterprises to increase guarantee fees on certain higher-risk loan types to improve risk-based pricing.&#160; Specifically, the agency is increasing fees by 37.5 basis points on cash-out refinances, investment properties, and loans with simultaneous secondary financing. &#160;Consistent with the practice today, when a loan falls into more than one category (e.g., both a cash-out refinance and investment property), the add-on fees are cumulative, which results in the net increase in those cases being higher than 37.5 basis points.[4]&#160;</li><li> <span style="line-height&#58;16px;text-decoration&#58;underline;"><strong>Jumbo Conforming Loans</strong></span><span style="line-height&#58;16px;"> </span> <span style="line-height&#58;16px;">–</span><span style="line-height&#58;16px;"> FHFA is directing the Enterprises to increase the fee on jumbo conforming loans (over $417,000) by 25 basis points.</span><span style="line-height&#58;16px;">&#160; </span> <span style="line-height&#58;16px;">Congress allowed the Enterprises to acquire these higher balance loans in certain high cost areas of the country in response to the housing crisis.</span><br></li></ul><p> <span style="text-decoration&#58;underline;"><strong>Ongoing Safety and Soundness Oversight</strong></span><strong> </strong>– As part of our ongoing oversight of the Enterprises, FHFA collects data on new loan acquisitions, monitors changes in the composition of loan purchases, evaluates quality control activities, and assesses the implications of these and other factors for risk to the Enterprises and their level of guarantee fees.&#160; Since FHFA recognizes that market conditions affecting mortgage credit risk will change over time, the agency will continue to conduct these oversight activities.&#160; Should FHFA determine in the future that market conditions necessitate adjustments in guarantee fees to sustain the safety and soundness of the Enterprises, FHFA will provide sufficient advance notice before the effective date of any such changes.</p><p> <span style="text-decoration&#58;underline;"><strong>Upfront Fee Schedules</strong></span> – The Fannie Mae and Freddie Mac upfront fee schedules are available at the following URLs&#58;</p><p><a href="https&#58;//www.fanniemae.com/content/pricing/llpa-matrix.pdf">https&#58;//www.fanniemae.com/content/pricing/llpa-matrix.pdf</a></p><p><a href="https&#58;//www.fanniemae.com/content/pricing/llpa-matrix-refi-plus.pdf">https&#58;//www.fanniemae.com/content/pricing/llpa-matrix-refi-plus.pdf</a></p><p>​<a href="http&#58;//www.freddiemac.com/singlefamily/pdf/ex19.pdf">http&#58;//www.freddiemac.com/singlefamily/pdf/ex19.pdf</a></p><p>​Footnotes&#58;&#160;&#160;​</p><p><span style="line-height&#58;22px;">[1]&#160;As an example, the 25 basis point upfront adverse market charge is approximately equivalent to 5 basis points ongoing mortgage rate (or 0.05%).</span><span style="line-height&#58;22px;">&#160;</span><br></p><p>[2] Small exceptions&#58; 1) the upfront fee is not being changed for one loan group (61-70% LTV/700-719 credit score), and 2) Fannie Mae is increasing upfront fees by 25 basis points for three additional loan groups (71-75% LTV/660-679 credit score, 76-80% LTV/660-679 credit score, 71-75% LTV/640-659 credit score) to align their pricing with Freddie Mac.</p><p>[3] See footnote 2 for certain technical exceptions.</p><p><span style="line-height&#58;22px;">[4]&#160;There are a few exceptions to this cumulative add-on practice.&#160;</span></p>6/27/2016 7:10:48 PM13270http://www.fhfa.gov/Media/PublicAffairs/Pages/Forms/AllItems.aspxhtmlFalseaspx
Cook County, Illinois Neighborhood Stabilization Initiative Fact Sheet 17694<p>​​The Neighborhood Stabilization Initiative (NSI) was jointly developed by the Federal Housing Finance Agency (FHFA) and Fannie Mae and Freddie Mac.&#160; It is a pilot program designed to stabilize neighborhoods that have been hardest hit by the housing downturn by improving upon existing strategies to <strong><em>help delinquent borrowers avoid foreclosure</em></strong> and creating a more efficient <strong><em>disposition path for foreclosed properties</em></strong>.&#160; These strategies reflect input from local housing groups, non-profits and government officials and have been tailored to address the unique circumstances of the Cook County, Illinois market.&#160; Fannie Mae and Freddie Mac established a partnership with the National Community Stabilization Trust (NCST) that will leverage ties to community organizations and local non-profits to meet these two goals.&#160; </p><p><strong>Pre-Foreclosure Strategy – MyCity Modification</strong></p><p>The MyCity Modification program will be offered within the geographic limits of Cook County, Illinois to borrowers who are delinquent on their mortgage and facing foreclosure.&#160; Eligibility criteria for being considered for the modification are simple and include most borrowers with Fannie Mae and Freddie Mac conventional mortgages on properties where the current market value is $250,000 or less.&#160;&#160; </p><p>Borrowers who are 90 days or more delinquent on their mortgage and are eligible for a MyCity Modification will receive an offer from their servicer with the terms of a MyCity Modification Trial Payment Plan.&#160; The goal of a MyCity Modification is to reduce a borrower's monthly mortgage payments by up to 60 percent.&#160; Mortgage servicers will complete the following steps to the extent necessary to reach this goal&#58;</p><ul><li>Add any accrued and unpaid interest, plus any amount paid by the mortgage servicer to other parties on the borrower's behalf, such as taxes or insurance, to the existing mortgage balance;</li><li>Lower the current interest rate on the mortgage in 1/8 percentage increments down to a floor of 2.00%, which will be fixed for the life of the modified loan; </li><li>Extend the term of the loan in one-month increments up to a maximum term of 480 months;</li><li>Defer repayment of a portion of the unpaid principal balance.</li></ul><p>Upon successful completion of the Trial Payment Plan, the borrower will receive final loan modification documents.&#160; Signing these documents will result in a permanent loan modification.&#160; If a borrower does not accept a MyCity Modification offer or cannot afford the payments, the mortgage servicer must evaluate the borrower for additional loss mitigation solutions to avoid foreclosure. &#160;The Trial Payment Plan period may range from three to four months, depending on a borrower's circumstances.</p><p>Borrowers who are less than 90 days delinquent are also eligible to be considered for the MyCity Modification and may apply by contacting their Servicer, completing the Uniform Borrower Application Form, and providing any required income and hardship documentation.&#160; </p><p><strong>Post-Foreclosure Strategy – Enhanced First Look</strong></p><p>Properties that have gone through foreclosure and become Real Estate Owned (REO) properties of Fannie Mae and Freddie Mac will be presented to eligible NCST community buyers to review for purchase.&#160; NCST buyers will have up to 12 business days to express interest in a property and agree on a price before the property is made available for purchase to the general public.&#160; During this Enhanced First Look period, NCST community buyers will evaluate the property and determine a disposition strategy that makes the most sense for all parties, taking into account the needs of a particular community.&#160; Single family structures, including condominiums, town homes, and 2-4 unit properties, are eligible for Enhanced First Look.&#160; The final sales price for each property will vary depending on the market value of the property and may include discounts for marketing, upkeep, utilities, and taxes – all costs that Fannie Mae and Freddie Mac would have had to pay if the property were sold during standard disposition of their REO inventory rather than through the Enhanced First Look process.&#160; Fannie Mae and Freddie Mac may also contribute funds for rehabilitation or for the demolition of properties they do not have to do themselves up to certain limits.&#160; </p><p>Only NCST community buyers are eligible to take advantage of the Enhanced First Look period.&#160; For more information about becoming an NCST community buyer, please contact NCST at <a href="mailto&#58;buyer@stabilizationtrust.com">buyer@stabilizationtrust.com</a>.</p><p><a href="/PolicyProgramsResearch/Programs/Pages/NSI-map.aspx">An interactive map</a>&#160;shows REO properties that are currently available through Fannie Mae's HomePath website and Freddie Mac's HomeSteps website.&#160; These are properties that have gone through foreclosure, are now owned by one of the Enterprises, and are ready for sale to the public.&#160; The map also includes Fannie Mae and Freddie Mac properties that are not yet ready to be marketed because they are in the process of being repaired, are currently occupied, or are in the Illinois state redemption period.&#160; These &quot;Future Listings&quot; will be offered through the Enhanced First Look process prior to listing on the Cook County Multiple Listing Service. </p>4/15/2015 12:31:00 PM2553http://www.fhfa.gov/Media/PublicAffairs/Pages/Forms/AllItems.aspxhtmlFalseaspx
Non-Performing Loan (NPL) Sale Requirements17508<p>On March 2, 2015, the Federal Housing Finance Agency (FHFA) announced enhanced non-performing loan (NPL) requirements for sales of NPLs by Freddie Mac and Fannie Mae (the Enterprises) that will reduce risk to taxpayers by transferring it to the private sector.&#160; FHFA believes that the sale of severely delinquent loans through NPL sales will reduce Enterprise losses and improve borrower and neighborhood outcomes.&#160; </p><p>The enhanced NPL sale requirements draw upon the experience of Freddie Mac’s two pilot sales of NPLs last year and this year.&#160; The loans in these two transactions have an aggregate value of approximately one billion dollars in unpaid principal balance.&#160; </p><p>The loans included in NPL sales will generally be severely delinquent – typically more than one year past due.&#160; FHFA’s goal is to achieve more favorable outcomes for the Enterprises and for borrowers by providing alternatives to foreclosure wherever possible.&#160; In addition, reporting by servicers on borrower outcomes will be required after the transactions close, which will allow the Enterprises to document whether the desired outcomes are being achieved.&#160; </p><p>Future NPL sales by the Enterprises must meet the enhanced requirements, which include the following&#58;&#160; </p><ul><li><p> <strong>Bidder qualifications&#58; </strong>Bidders will be required to identify their servicing partners at the time of qualification and must complete a servicing questionnaire to demonstrate a record of successful resolution of loans through alternatives to foreclosure;</p></li></ul><ul><li><p> <strong>Modification requirements&#58; </strong>The new servicer will be required to evaluate all pre-2009 borrowers (other than those whose foreclosure sale date is imminent or whose property is vacant) for the U.S. Department of the Treasury’s Making Home Affordable programs, including the Home Affordable Modification Program (HAMP).&#160; All post-January 1, 2009 borrowers (other than those with an imminent foreclosure sale date or vacant property) must be evaluated for a proprietary modification.&#160; Proprietary modifications must not include an upfront fee or require prepayment of any amount of mortgage debt, and must provide a benefit to the borrower with the potential for a sustainable modification;</p></li></ul><ul><li><p> <strong>Loss mitigation waterfall requirements&#58;</strong> Servicers must apply a waterfall of resolution tactics that includes evaluating borrower eligibility for a loan modification (HAMP and/or proprietary modification), a short sale, and a deed-in-lieu of foreclosure.&#160; Foreclosure must be the last option in the waterfall.&#160; The waterfall may consider net present value to the investor;</p></li></ul><ul><li><p> <strong>REO sale requirements&#58;</strong> Servicers are encouraged to sell properties that have gone through foreclosure and entered Real Estate Owned (REO) status to individuals who will occupy the property as their primary residence or to non-profits.&#160; For the first 20 days after any NPL that becomes an REO property is marketed, the property may be sold only to buyers who intend to occupy the property as their primary residence or to non-profits; </p></li></ul><ul><li><p> <strong>Subsequent servicer requirements&#58;</strong>&#160; Subsequent servicers must assume the responsibilities of the initial servicer; </p></li></ul><ul><li><p> <strong>Bidding transparency&#58;</strong>&#160; To facilitate transparency of the NPL sales program and encourage robust participation by all interested participants, each Enterprise will develop a process for announcing upcoming NPL sale offerings.&#160; This will include an NPL webpage on the Enterprise’s website, email distribution to small, non-profit and minority- and women-owned business (MWOB) investors, and proactive outreach to potential bidders.&#160; Additionally, each Enterprise will host training sessions for interested non-profit and MWOB investors to facilitate better understanding of the NPL sales process.&#160; The Enterprises will also offer small pools of NPLs, where feasible; </p></li></ul><ul><li><p> <strong>Reporting requirements&#58;</strong>&#160; NPL buyers and servicers, including subsequent servicers, are required to report loan resolution results and borrower outcomes to the Enterprises for four years after the NPL sale.&#160; These reports will help inform whether to make future changes to NPL sales requirements and determine whether an NPL buyer and NPL servicer continue to be eligible for future sales based on pool level borrower outcomes, adjusted for subsequent market events.&#160; Consistent with applicable law, FHFA and/or the Enterprises will provide public reports on aggregate borrower outcomes at the pool level.&#160; </p></li></ul><p> <span style="line-height&#58;1.6;"></span><span style="line-height&#58;1.6;">Fannie Mae&#58; <a href="http&#58;//www.fanniemae.com/portal/funding-the-market/npl/index.html">http&#58;//www.fanniemae.com/portal/funding-the-market/npl/index.html​</a></span></p><p></p><p>Freddie Mac&#58; <span style="line-height&#58;1.6;"><a href="http&#58;//www.freddiemac.com/npl/">http&#58;//www.freddiemac.com/npl/</a></span></p><p> <a href="/Media/PublicAffairs/Pages/FHFA-Enhances-Requirements-for-Freddie-Mac-and-Fannie-Mae-Sales-of-Non-Performing-Loans.aspx">Related News Release</a></p>3/23/2016 8:32:00 PM15339http://www.fhfa.gov/Media/PublicAffairs/Pages/Forms/AllItems.aspxhtmlFalseaspx
Detroit, Michigan NSI Fact Sheet - Update15245<p>​<strong>​​Summary</strong></p><p>The Neighborhood Stabilization Initiative (NSI) was jointly developed by the Federal Housing Finance Agency (FHFA), and Fannie Mae and Freddie Mac.&#160; Announced in May 2014, it is a pilot program designed to stabilize neighborhoods that have been hardest hit by the housing downturn.&#160;<span style="line-height&#58;22px;">The program promotes strategies to <strong><em>help delinquent borrowers avoid foreclosure,</em></strong> and strategies for more efficient <strong><em>disposition of foreclosed properties</em></strong>.&#160; A partnership with the National Community Stabilization Trust is leveraging ties to community organizations and local non-profits to meet these two goals.&#160; Initial piloting of the program has occurred within the city limits of Detroit, Michigan.</span></p><p><strong>Background</strong></p><p>The number of REO properties owned by Fannie Mae and Freddie Mac is declining and approaching pre-crisis levels in some states. At the national level, the REO inventory of Fannie Mae and Freddie Mac&#160;is declining from its 3Q10 peak of nearly 250,000 properties to 132,000 as of 2Q14, as dispositions outpace acquisitions. However, in some areas of the country REO inventory continues to increase&#160;or remains near historic highs. Some particular markets have large concentrations of distressed and low-value REO properties as well as large volumes of loans that have been delinquent for one to two years that are likely to become REO. </p><p>Given the unique challenges presented by these markets—high vacancy rates, weak for-sale markets, steep home-price declines—Fannie Mae and Freddie Mac are partnering with the National Community Stabilization Trust (NCST), a national non-profit organization experienced in stabilization efforts for distressed communities. Working together, they will leverage their ties to “boots on the ground” community organizations and local non-profits, and work closely with local governments to make timely and informed decisions about the best treatment of individual properties.</p><p><strong>NSI PILOT PROGRAM ELEMENTS</strong> </p><div><p><strong>Pre-Foreclosure Strategies</strong> </p><p>The NSI program offers Detroit borrowers who are delinquent on their mortgages the opportunity to receive a loan modification that will reduce their monthly payments, help them avoid foreclosure and stay in their homes.<br></p></div><ul><li><strong style="line-height&#58;22px;font-family&#58;&quot;source sans pro&quot;, sans-serif;font-size&#58;14px;">MyCity Modification</strong><span style="line-height&#58;22px;"> - The new MyCity Modification has been added to the traditional loan modification programs (HAMP, Standard Modification, and Streamlined Modification) being offered by Fannie Mae and Freddie Mac in the city limits of Detroit.</span></li><ul><li><span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">​MyCity Modification allows for greater reduction in monthly mortgage payments.</span></li><li><p>Delinquent borrowers will be evaluated for all Fannie Mae and Freddie Mac loan modification programs and will be offered the modification that results in the <strong><em>lowest monthly payments</em></strong> for them, if eligible.</p></li><li><p>As of September 1, 2014, MyCity Modification is a mandatory offering of Fannie Mae and Freddie Mac.</p></li><li><span style="line-height&#58;22px;">On average, MyCity Modification participants are seeing their monthly principal and interest payments cut in half.</span></li></ul></ul><p>The NSI program also includes a strategy that allows severely delinquent, low-balance loans to be transferred to a non-profit entity for resolution prior to foreclosure.&#160; Solutions offered by the non-profit may include but not be limited to, a short sale or a deed-in-lieu of foreclosure, or a loan modification.<br></p><p><strong>Post-Foreclosure Strategies </strong><br>The NSI program includes three strategies for disposing of foreclosed properties.&#160; These strategies are designed to increase home retention and decrease the number of vacant houses. </p><ul><li><strong style="line-height&#58;22px;font-family&#58;&quot;source sans pro&quot;, sans-serif;font-size&#58;14px;">​Quick Look</strong><span style="line-height&#58;22px;">&#160;-&#160;Through the Quick Look program, non-profit organizations are given an exclusive 7-day opportunity, immediately after foreclosure, to purchase properties from Fannie Mae and Freddie Mac.&#160; Participating nonprofits receive notification and property information, so that they can evaluate and acquire properties prior to any public sales listing.&#160;</span></li><ul><li><span style="font-family&#58;inherit;font-size&#58;inherit;font-weight&#58;inherit;">​​Partnerships with 8 local non-profits have been established.</span></li><li><p>Approximately 33 percent of all properties presented to non-profits since July have been purchased through the Quick Look program.</p></li></ul><li><span style="line-height&#58;22px;">​</span><span style="line-height&#58;22px;"><strong>Auction Sales</strong>&#160;- Occupied properties not acquired by a non-profit through the Quick Look period will be sold at auction.</span></li><ul><li><p>Investors who purchase these properties might negotiate new rental terms with the occupant.</p></li><li><p>Occupied properties that are not sold at auction will go through the normal process of real-estate owned (REO) disposition, which includes protection of the property and preparation for sale, while the redemption period passes.</p></li><li><p>Auctions have already commenced in Detroit and early results are encouraging.</p></li></ul></ul><p><strong>Enhanced First Look</strong> - Vacant properties that are not acquired by non-profits through the Quick Look program will go through the normal process of REO disposition, which includes preservation and protection of the property while the redemption period passes, and the Enhanced First Look program.</p><ul><ul><li><p>The Enhanced First Look program segments properties based on their value and condition.</p></li><li><p>Non-profit organizations are given incentives through a range of sales concessions to acquire these properties.</p></li><li><p>As of September 12, non-profits have agreed to purchase almost 70 percent of all properties presented to them through the Enhanced First Look program.​​​​</p></li></ul></ul>2/12/2015 11:10:54 PM2762http://www.fhfa.gov/Media/PublicAffairs/Pages/Forms/AllItems.aspxhtmlFalseaspx
Detroit, Michigan NSI10734<h2> ​​​​Summary</h2><p>The Neighborhood Stabilization Initiative (the “NSI”) was jointly developed by the Federal Housing Finance Agency (FHFA), Fannie Mae and Freddie Mac to stabilize neighborhoods that have been hardest hit by the housing crisis.&#160; The program includes two distinct pre-foreclosure strategies and three distinct post-foreclosure strategies, all of which are intended to assist homeowners who are behind on their mortgages, help neighborhoods recover, and reduce the inventory of real estate owned (REO) properties held by Fannie Mae and Freddie Mac.&#160; Initial piloting of the program will occur within the city limits of Detroit, Michigan and will begin in the coming weeks.</p><h2> Background</h2><p>The number of REO properties owned by Fannie Mae and Freddie Mac is declining and approaching pre-crisis levels in some states.&#160; At the national level, the REO inventory of Fannie Mae and Freddie Mac is declining from its 3Q10 peak of nearly 250,000 properties to 150,000 in 4Q13, as dispositions outpace acquisitions.&#160; However, in some areas of the country REO inventory continues to increase or remains near historic highs.&#160; Some particular markets have large concentrations of distressed and low-value REO properties as well as large volumes of loans that have been delinquent for one to two years that are likely to become REO.&#160; </p><p>Given the unique challenges presented by these markets—high vacancy rates, weak for-sale markets, steep home-price declines—Fannie Mae and Freddie Mac are partnering with the National Community Stabilization Trust (NCST), a national non-profit organization experienced in stabilization efforts for distressed communities.&#160; Working together, they will leverage their ties to “boots on the ground” community organizations and local non-profits, and work closely with local governments to make timely and informed decisions about the best treatment of individual properties.&#160; </p><h2> NSI Program Goals</h2><p>The NSI program has three primary goals&#58;</p><ol><li><p>To increase the number of families able to stay in their current homes through loan modifications;</p></li><li><p>To effectively match distressed properties with responsible non-profits for property renovation and resale; and</p></li><li><p>To assist distressed communities in executing their building demolition plans.</p></li></ol><p>Goals one and two should decrease vacant houses by increasing the number of properties occupied by owners or renters.&#160; Non-profits may renovate properties for sale to owner-occupants, lease back to current occupants when possible, or lease to other qualified renters.&#160; For pre-foreclosure properties, the program will offer incentives to current borrowers and nonprofits, maximize payment relief and increase chances for current or future occupants to stay in the home.&#160; When such efforts are not feasible, the delinquent notes would be conveyed to NCST for resolution.&#160; For post-foreclosure properties, the program will consider an array of neighborhood stabilization options such as donation, demolition, financial incentive mechanisms, repairs, and auctions.&#160; </p><h2> NSI Program Elements</h2><p> <span style="text-decoration&#58;underline;">Pre-Foreclosure Strategies</span>&#58;</p><ul><li><p style="margin&#58;0px;padding&#58;0px;"> <strong>Distressed Region Modification</strong> – Borrowers will be evaluated for a new loan modification that provides a greater reduction in monthly principal and interest payments than is available in the traditional loan modification programs.</p>​</li><li><p style="margin&#58;0px;padding&#58;0px;"> <strong>Non-Performing Loan Sale/Donation</strong> – Severely delinquent low-balance loans secured by distressed properties may be transferred to a non-profit entity for resolution prior to foreclosure.</p></li><ul><li><p style="margin&#58;0px;padding&#58;0px;">Non-profits will work with seriously delinquent owners to determine the most feasible outcome for the household and the property.</p></li><li><p style="margin&#58;0px;padding&#58;0px;">Solutions may include new affordable payment terms, a short sale, a deed-in-lieu of foreclosure, or foreclosure and subsequent repair or demolition, as appropriate.</p></li></ul></ul><p> <span style="text-decoration&#58;underline;">Post-Foreclosure Strategies</span>&#58;</p><ul><li><p><strong>​​NCST Quick Look period</strong> – Non-profits will have an opportunity to acquire certain REO properties (occupied or vacant) through purchase or receive properties as a donation prior to the Enterprises initiating their standard disposition processes.&#160; NCST will assist the Enterprises with these sales and donations.</p></li><li><p> <strong>Post-Quick Look</strong> – Occupied properties not sold or donated to non-profits during the Quick Look period will be sold at auction; vacant properties and those that do not sell via auction will be prepared for normal REO sales, which starts with the First Look process, a 20-day period when properties are offered only to owner-occupants, nonprofits, and governmental entities.</p></li><li><p> <strong>Enhanced First Look Process</strong> – Properties will be offered to non-profits through NCST several days prior to being marketed through Multiple Listing Services (MLS).&#160; For low-value REO properties, Fannie Mae and Freddie Mac will work with NCST and local community organization to determine the optimum disposition of individual properties, which may result in donation, donation/demolition, or repair/rehabilitation.&#160; Discounts and incentives may be offered to non-profits depending on characteristics such as property condition, value, and location.</p></li></ul>2/12/2015 11:09:37 PM7502http://www.fhfa.gov/Media/PublicAffairs/Pages/Forms/AllItems.aspxhtmlFalseaspx

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