Goal of SMP: Help the most at-risk borrowers stay in their homes through a streamlined process to establish an affordable monthly housing payment. The goal is to reach a monthly housing payment (which includes capitalized past due payments, principal, interest, taxes, insurance and HOA/condo fees) that is no more than 38% of the borrower's monthly gross household income.
How SMP Works: Participating servicers work with eligible qualified borrowers to reach a more affordable mortgage payment through extending the term of the loan, lowering the interest rate, and/or forbearing principal. All outstanding late fees are waived.
Eligible Borrowers: 90 days or more past due on mortgage, can be in foreclosure, must not be in bankruptcy, owns and occupies the property, and the property is a single family residence.
90% or Higher LTV: Borrower's current loan-to-value ratio must be 90% or higher. The property value will be determined by the servicer, Fannie Mae or Freddie Mac, depending on ownership of the loan.
Mandatory Escrow: Escrows for real estate taxes and homeowners' insurance must be set up under this program if they are not currently escrowed.
Required Documentation: A hardship statement, verification of monthly gross household income, and a signed modification agreement. The homeowner must make the first payment at the modified terms when he or she submits these documents.
3 Months of Payments: For modification to be complete, borrower must make 3 payments within 90 days at the new modified payment level and be current at day 90.
Counseling Encouraged: Participating servicers and investors encourage borrowers to seek housing counseling at HUD-approved housing counseling agencies. They can receive free counseling by calling the Homeowner's HOPE Hotline, 888-995-HOPE or visit www.hud.gov to find a counselor.
Participating Investors: Fannie Mae, Freddie Mac, and majority of HOPE NOW portfolio lenders/servicers.
Reaching Borrowers: Participating servicers will send letters to eligible borrowers. Borrowers may also call their servicer to see if they qualify.
Reaching Servicers: Servicers are encouraged to dedicate separate toll-free numbers and faxes for borrowers interested in SMP. When established, those numbers will be publicized by HOPE NOW and participating investors and servicers.
Reporting: Participating servicers are required to report on implementation and success of SMP. HOPE NOW will release data on this program on an ongoing basis.
