SONYMA AKeep the Dream@ Mortgage Refinance Program
Counseling agencies are invited to participate in the State of New York Mortgage Agency’s (“SONYMA”) exciting new refinancing product, Keep the Dream, which began in September, 2007. This mortgage product is designed to provide a stable fixedrate refinancing alternative for borrowers in inappropriate mortgages who are up to 60 days delinquent on their current loans. SONYMA has teamed with Fannie Mae, mortgage lenders, mortgage insurance companies, our Mortgage Insurance Fund (“MIF”), and the State Division of Housing and Community Renewal (“DHCR”) to create the Keep the Dream mortgage refinancing program. An important part of the Keep the Dream program has been the creation of a statewide network of housing counseling organizations. That’s because homeowner counseling is a required component of the Keep the Dream program and we are partnering with organizations like yours to advise families on sustainable homeownership. If you are interested in participating, please complete the attached form and return it to Wanda Graham, Vice President for Community Relations, at Wanda@nyhomes.org. You will also need to take our web-based training program that is available on our web site, www.nyhomes.org. For details about our training program, or if you have any other questions, please contact Ms. Graham at (212) 688-4000 ext. 393. A description of the “Keep the Dream” program and procedures is also attached. A term sheet on the loan product is available on SONYMA’s website at http://www.nyhomes.org/docs/keep_the_dream_term_sheet__corresp__9-10-07.pdf. Frequently asked questions about the program is also available on SONYMA’s website at http://209.247.187.54/home/index.asp?page=11&select_faq_by_faq_cat=19&record_pag e=1.
SONYMA AKeep the Dream@ Mortgage Refinance Program
Counseling Agency Name: _______________________________________________ Contact Name: _________________________________________________________ Telephone # _____________________________________ E-mail Address: __________________________________ Please provide any comments that you might have below:
Send all responses to: Wanda Graham Fax: 212-872-0393 E-mail: wanda@nyhomes.org
KEEP THE DREAM MANDATORY HOMEOWNERSHIP COUNSELING State of New York Mortgage Agency
As an integral part of its Keep the Dream refinancing program aimed at helping persons who are negatively affected by subprime loans, the State of New York Mortgage Agency (SONYMA) shall require all those homeowners who receive refinancing loans to receive mandatory Homeownership Counseling from a participating Counseling Agency which has either been certified by HUD or by DHCR as a participating Neighborhood Preservation Corporation (NPC) or a Rural Preservation Corporation (RPC). A list of the participating Counseling Agencies will be provided to all Participating Lenders and posted on SONYMA’s website. SONYMA expects that all participating Counseling Agencies will be adopting and adhering to the National Industry Standards for Homeownership and Counseling at some point in the coming year. The purpose of this counseling is enable homeowners who are assisted by the Keep the Dream refinancing program to sustain homeownership into the future. All participating Counseling
Agencies will receive training from SONYMA on the Keep the Dream program.
KEEP THE DREAM Counseling Process Initial Eligibility Assessment for Keep the Dream To the extent that the Homeowner has not been pre-screened by one of the originating lenders participating in the Keep the Dream program (Participating Lender), the Counseling Agency shall conduct a basic interview to verify if the Homeowner appears eligible for the Keep the Dream program. Only if this initial determination is made (by either the Participating Lender or the Counseling Agency), shall the Homeowner move on to the stages described below. This initial determination shall not, of course be binding on the Participating Lender and/or SONYMA. Pre-Closing Counseling 1. Stage One-face to face counseling
a. In Person, at Counselor’s Office
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b. Review of Homeowner’s Financial Situation and Credit Report (if available) c. Identification of Credit Challenges d. Confirmation of Mortgage Hardship e. Development of Homeowner’s Budget and Savings Plan f. Written Action Plan and Post Closing Appointment Schedule Given to Homeowner g. Session Length Depends on Homeowner Situation but anticipated to last approximately 2 hours h. Issuance of Counseling Completion Certificate to Homeowner These sessions are designed for Counselors to meet with Homeowner one-on-one, focusing on the evaluation of their credit reports, savings, mortgage payment history and spending habits, in order for homeownership to continue. The Homeowner must bring: • • • • •
Mortgage Statement or Coupon Book Copy of current Note and Mortgage Monthly bank statements Credit Card statements Savings and Investment Statement
After a presentation by the Counselor as to the costs and obligations of homeownership (taxes, insurance, maintenance, etc), the Homeowner and the Counselor shall review the Homeowner’s monthly expenses and develop a realistic spending budget. After all of the bills have been added and deducted from the monthly net income, a new savings plan should be established. If the Homeowner has not yet established a reserve account in the event of an emergency, Counselor must advise Homeowner to establish one in an appropriate financial vehicle (i.e. CD’s, Bank savings and revolving savings programs). The Counselor shall present a basic primer on other loan options (home equity, home improvement) and the potential dangers with such loans. The Counselor shall prepare a summary Written Action Plan identifying the key steps the Homeowner needs to take. A part of the Written Action Plan shall be the mandatory post-closing counseling schedule, which shall also be discussed verbally with the Homeowner. The Counselor shall emphasize that the Homeowner must contact their (new) Participating Lender immediately if there are any problems in making a mortgage payment. At the completion
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of the counseling session, the counselor shall issue the Homeowner a certificate in the form attached hereto as Exhibit A (the “Pre-Closing Counseling Completion Certificate”) confirming that the Homeowner completed the pre-closing counseling, as well as a bill for $500. The Homeowner must provide the Pre-Closing Counseling Completion Certificate and bill to the Participating Lender as a condition of closing on the Keep the Dream refinancing loan. The Counseling Agency shall only receive the $500 fee if the Homeowner actually closes on the refinancing loan through the Keep the Dream Program.
Post Closing Counseling i. Required (1) at any time, if the Homeowner is unable to make mortgage payments, and (2) 90 and 360 days after Closing of the Refinancing Loan, upon advance written notice by Counselor to Homeowner j. In Person, at Counselor’s Office k. Review of Homeowner’s Budget/Financials l. Identification of Credit Challenges m. (As needed) Modification of Homeowner’s Budget and Savings Plan n. (as needed) Written Action Plan Given to Homeowner o. Session Length depends on Homeowner situation, can be as brief as 30 minutes per session p. Post counseling confirmation sent by Counselor to M&T Between 15 and 30 days prior to each of the required meetings, the Counseling Agency shall send a letter to the Homeowner with a notice of the meeting time. Each of these sessions is designed for Homeowners to provide Counselors with an update of their financial situation and anticipate and resolve any potential problems with making mortgage and other mandatory payments. The Homeowner must bring to each session: • • • •
Mortgage Statement or Coupon Book Monthly bank statements Credit Card statements Savings and Investment Statement
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At this session the Homeowner and the Counselor shall go over the monthly expenses and compare to Pre-closing numbers. If needed, changes to the Homeowner’s Budget and Savings Plan shall be agreed. Any concerns of the Counselor or Homeowner shall be reviewed. If necessary, the Counselor shall prepare a summary Written Action Plan identifying the key steps the Homeowner needs to undertake. If the Homeowner is delinquent in the mortgage or other mandatory payments, the Counselor must discuss the Homeowner’s spending habits in correlation to his/her present situation. In the Counselor’s discretion, additional meetings with delinquent Homeowners can be scheduled, to gauge process and assure that the Homeowner does not enter into foreclosure. After completion of each Post-Closing Counseling session, the Counselor shall issue to SONYMA and to M&T Bank a certificate in the form attached hereto as Exhibit B (the “Post-Closing Completion Certificate”).
Counseling Referral and Payment Process
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Participating Lenders shall refer eligible Homeowners to the list of approved Counselors.
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To the extent the Homeowners come first to the Counselors, Counselors may refer eligible Homeowners to Participating Lenders.
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Counselors will issue a Pre-Closing Counseling Completion Certificate and a bill for $500 to the Homeowner, which shall be provided to the Participating Lender.
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The Counseling Agency which issues the Pre- Closing Counseling Completion Certificate shall be compensated in the amount of $500 if the Homeowners actually close on a refinancing loan through the Keep the Dream Program.
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Payment shall be made directly to the Counselor by the Participating Lender at the time of Closing.
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The Counseling Agency will issue a Post-Closing Completion Certificate to SONYMA and to M&T.
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EXHIBIT A PRE-CLOSING COUNSELING COMPLETION CERTIFICATE
To: [name of Participating Lender] and State of New York Mortgage Agency From: Date: Regarding: [Name of Borrower] [Name of Counseling Agency]
We hereby certify that [Name of Borrower] completed the face to face Pre-Closing Counseling required in connection with the SONYMA Keep the Dream program
Very Truly Yours,
[Name of counselor] [Name of Counseling Agency]
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EXHIBIT B POST-CLOSING COUNSELING COMPLETION CERTIFICATE
To: M&T BANK and State of New York Mortgage Agency From: Date: Regarding: [Name of Borrower] [Name of Counseling Agency]
We hereby certify that [Name of Borrower] completed Session # [1 or 2] of the Post Closing Counseling required in connection with the SONYMA Keep the Dream program.
Very Truly Yours,
[Name of counselor] [Name of Counseling Agency]
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