Foreclosure Flashcards
(41 cards)
Define Delinquent
A borrower is delinquent on the mortgage when all or part of a monthly payment is unpaid after the due date. The mortgage remains delinquent as long as the payment remains due but unpaid.
Define Default
A conventional loan is considered in default when a payment has not been paid after 60-90 days. For FHA loans, a loan is considered delinquent after 30 days.
What are Mortgage Servicing Guidelines?
1: Servicer must make efforts to contact the borrower after 36 days of delinquency.
2: Servicer must send borrower written notice to contact them before 45 days of delinquency and provide info about housing counselors.
3: Servicers must assign personnel to be available to help delinquent borrowers.
4: Servicers must notify borrowers promptly and in writing that a loss mitigation appt. is complete.
True or False: Servicers must make a first notice or filing for foreclosure before the borrower is more than 120 days delinquent.
False
After ____ days, servicers can’t begin the foreclosure process while borrower is being evaluated for a Loss mitigation plan.
120
True or False: Servicers must be able to tell homeowners the circumstances under which the servicer may make a referral to the foreclosure
True
True or False: Servicers are not required to evaluate the borrower for all the foreclosure avoidance options for which the borrower may qualify.
False
What is Judicial Foreclosure?
Judicial foreclosure is a lawsuit, so the process is formalized. To obtain permission for foreclosure, the servicer files a lawsuit in the state court.
Judicial or Non-Judicial: The servicer issues the homeowner a notice of the lawsuit, called a summons or a complaint.
Judicial
What happens in Judicial Foreclosure after the homeowner contests the foreclosure?
The court sets a date for the homeowner and servicer to go before a judge and present arguments. The judge may decide on the case to order a trial if there is a difference of material facts.
What is a Non-Judicial Foreclosure?
Courts are not involved, communication occurs between the homeowner and the servicer or the servicer’s appointed representative in the foreclosure process.
Judicial or Non-Judicial: The servicer issues a Notice of Default.
Non-Judicial
What happens in a Non-Judicial foreclosure, if the delinquency is not cured after the Notice of Delinquency is delivered?
The homeowner receives a Notice of Sale. The NOS gives the homeowner a certain number of days before the house will be sold, which varies by state.
How many days before the sale date in a Non-Judicial Foreclosure does a homeowner typically have to cure delinquency?
5-10 days
What is the Loss Mitigation Submission Process?
1: Determine reason client is behind on mortgage payments.
2: Determine if homeowner wants to remain in the home or transfer out of the home.
3: Determine the type of mortgage
4: Gather required financial documentation and determine affordability
5: Complete the necessary forms to request the loss mitigation option.
6: Submit the request to the servicer
7: Respond to additional requests for information.
8: If request is approved, discuss if it is affordable. If it is denied, determine why.
What is Imminent Default?
Describes a borrower who is not yet in default but is currently delinquent with a high risk of defaulting.
What is a possible indicator that a client won’t be able to remain in the home?
Temporary or permanent disability of the homeowner, which prevents them from working.
True or False: Illness or disability of a family member, which requires the homeowner to stop working is not a sign that your client won’t be able to remain in the home.
False
True or False: Death of an income-earning borrower is an indicator that your client won’t be able to remain in their home
True
What is the purpose of the Home Affordable Modification Program?
To assist homeowners who are struggling to make mortgage payments.
What is the benefit of the Home Affordable Modification Program?
Lowered mortgage payments to make them more affordable and sustainable in the long-term.
What is the purpose of Fannie Mae and Freddie Mac?
To provide an easier, flexible way of helping more borrowers qualify for a loan modification in a changing housing environment.
How can a borrower qualify for Fannie Mae and Freddie Mac?
- Borrower must be 60+ days delinquent and occupy the property as a primary residence.
OR - Be current or less than 60 days delinquent, occupy property as a primary residence, and be in imminent default.
What does a Borrower Response Package include?
- Completed and signed Form 710, Uniform Buyer Assistance Form
- Eligible hardship document
- Documents to verify stable income to support monthly payment
- Imminent default hardship documentation for borrowers less than 60 days delinquent
