This is the September Presentation by Making Home Affordable on the HAFA Program.

1. Home Affordable Foreclosure Alternatives
September 2011 Making Home Affordable

2. Home Affordable Foreclosure Alternatives – HAFA
H Aff d bl F l Alt ti
This presentation will cover the following:
1 Welcome
2 Treasury HAFA Overview & Update
3 GSE Overview & Update
p
4 Servicer Overview & Update
5 Discussion/Questions
September 2011 Making Home Affordable 2

3. Home Affordable Foreclosure Alternatives – HAFA
Overview
September 2011 Making Home Affordable 3

4. HAFA Advantages
d
HAFA has key benefits for the homeowner.
Releases homeowner from future liability of mortgage debt
Homeowner receives $3,000 in relocation assistance
Less negative effect on homeowner’s credit score
Homeowner incurs no out‐of‐pocket expenses
Homeowner incurs no out‐of‐pocket expenses
Foreclosure cannot take place while the homeowner is being
considered for HAFA
Servicer will assign a “relationship manager” to work with the
homeowner
September 2011 Making Home Affordable 4

5. HAFA Advantages
d
HAFA has key benefits for the real estate professional.
Ability to market property as pre‐approved short sale
Sales commission cannot be changed once established
Ability to escalate difficult cases
Transparency in the short sale process
Transparency in the short sale process
Foreclosure cannot take place while the homeowner is being
considered for HAFA
Servicer will assign a “relationship manager” to work with the
homeowner
September 2011 Making Home Affordable 5

6. What are the Goals of HAFA?
Wh h G l f HAFA?
Key Components
of the Program
 Release of subordinate liens and
 Release of subordinate liens and
personal liability
l li bili
personal liability.
Provide assistance to homeowners
Provide assistance to homeowners
Goal 1 who need to transition to more
who need to transition to more  Financial incentives for
 Financial incentives for
homeowners, investors and
affordable housing.
affordable housing. homeowners, investors and
servicers
servicers.
 Uniform documents.
 Specified response times and
Standardize & streamline the
Goal 2 short sale process.
timeframes.
 Upfront disclosure of short sale
terms and conditions.
September 2011 Making Home Affordable 6

7. HAFA by the Numbers
HAFA is growing in scope and influence.
g g p
Source: Making Home Affordable Program
Performance Report Through August, 2011
September 2011 Making Home Affordable 7

8. HAFA Resources
Get help with
questions about
HAFA at
ssdil@HMPadmin.com
September 2011 Making Home Affordable 8

9. Trusted Advisors Escalate Tough Cases
d d i l h
HAMP Solution
Center (HSC) helps
trusted advisors
with cases that are
difficult to resolve.
difficult to resolve
September 2011 Making Home Affordable 9

10. MakingHomeAffordable.gov
ki ff d bl
September 2011 Making Home Affordable 10

11. More Help for Struggling
Borrowers
Foreclosure Alternatives
Short sale Deed-in-lieu Deed-for-Lease™
11

12. Leave the home: Short sale
• A short sale, also known as a pre-foreclosure sale, is when a borrower
sells a home for less than the balance remaining on the mortgage. If
the mortgage company agrees to a short sale a borrower can sell the
sale,
home and pay off all (or a portion of) the mortgage balance with the
proceeds. These borrowers may also be eligible for the government’s
Home Affordable Foreclosure Alternatives Program (g (HAFA) which
)
offers short sale and DIL options.
• A short sale is an alternative to foreclosure and may be an option if a
borrower:
– Is ineligible to refinance or modify the mortgage
– Is facing a long-term hardship
– Is behind on mortgage payments
– Owes more on the home than it’s worth
– Has not been able to sell the home at a price that covers what is
still owed on th mortgage
till d the t
– Can no longer afford the home and is ready or needs to leave
12

13. Leave the home: Deed-in-Lieu of
foreclosure
f l
• A Deed-in-Lieu of Foreclosure (DIL) is where a homeowner
( )
voluntarily transfers the ownership of a property (the title
and all property associated with it) to the owner of the
mortgage in exchange for a release from the mortgage
loan and payments.
• A DIL may be an option if a borrower:
– Is ineligible to refinance or modify the mortgage
– Is facing a long-term hardship
– Is behind on mortgage payments
– Owes more on the home than it’s worth
– Doesn’t want to sell the home or hasn’t been able to sell the home
– Can no longer afford the home and is ready to leave
13

14. More Help for Struggling Borrowers
p gg g
Outreach
• Fannie Mae Mortgage • Thousands attend • KnowYourOptions.com™
Help Centers open in 11 foreclosure provides interactive help
markets prevention events
14

15. 15

16. Freddie Mac Short Sale
Overview
Mark Johnson
Loss Mitigation Manager
October 12, 2011

17. Everyone Benefits From A Short Sale
Homeowner Investor
 Prevents foreclosure  Reduces potential losses
 Avoids REO and associated
 Avoids deficiency judgment
expenses
 S ti fi the debt for less than
Satisfies th d bt f l th MI Company
full amount
 Reduces claim losses
 Avoids stigma of foreclosure
g
 A id REO and associated
Avoids d i t d
Servicer expenses
 Reduces NPL servicing costs
 Receives potential incentives
17
© Freddie Mac

18. Freddie Mac Short Sale Options
HAFA Programs Classic Short Sale & DIL
Eligibility Criteria • Delinquent more than 60 days Borrowers who are delinquent or in
• Meet HAMP eligibility criteria danger of imminent default
• E l t d f other home retention
Evaluated for th h t ti
options No need to be HAMP eligible
Borrower Not required to make any contribution Maximum possible contribution toward
Contribution any deficiency from the sale in cash
and/or promissory note
Documentation Uniform documents: SAI Uniform documentation
 Short sale agreement Form 710
 Request for short sale
 Approval and denial letters
 Deed-in-lieu agreement
Property Servicer orders a property valuation Same as HAFA
Valuation
V l ti using th 90 d “ i ” marketing value
i the 90-day “as is” k ti l
Price is based on a market sales
comparison using the as-is value
Incentives
Servicer $2,200 $2,200
Borrower $3,000
18
© Freddie Mac

19. Challenge: Many Real Estate Agents Are New
To The Short Sale Experience
Most common challenges:
 MI and junior liens are part of
the negotiation process
 completed short sale
package
 Postponements and pending
foreclosure sale
 Deficiency Judgments, Tax
g
implications, Arms Length
Affidavit
19
© Freddie Mac

20. Challenge: Getting Agreement Among
Multiple Parties
Parties in a Typical Short Sale Transaction
These have up to three times more parties involved
than a typical real estate transaction
Agents
Loan Mortgage Mortgage
Seller Buyer
Servicer Investor Insurer
Housing
Counselor
C l
Primary Pool
Junior
Lienholders
HOA Buyer’s
Liens Lender
20
© Freddie Mac Source – “Effective Short Sale Workouts, Genworth Financial ,
Inc

21. Freddie Mac Is Improving Short Sale
Processes & Increasing Awareness
 Streamlined document requirements
 Paying agents full commission
 Providing quicker decisions
 Implemented training programs for real estate
agents
 Debuted an online learning center
 Participating in borrower workshops
nationwide
21
© Freddie Mac

22. Real Estate Professional
Presentation on HAFA Short Sales
Date: October 12, 2011
22

23. Chase Foreclosure Alternatives
Chase Foreclosure Alternatives Map
Short Sale High Level Process Flow
Short Sale Consideration
Short Sale Document Requirements
HAFA Program Overview
Approval of a HAFA Short Sale
HAFA SSA Timeline
HAFA Short Sale Benefits
HAFA Short Sale Buyer
HAFA Program Comparison
Chase List Assist
Short Sale Webpage
How Can You Help Us?
Short Sale Resources
23

24. Chase Foreclosure Alternatives Map
24

25. Sh t S l P Fl
Short Sale Process Flow
Liquidation Process Overview
Entry Points
Live
Transfers
Document Quality
List Assist Negotiation Closing
Customer Intake/Setup Reviews
Care
Strategic Theme
St t i Th
Collections
Pre-Qualification Underwriting System Maintenance
Denial
Modification
• Denials
 D
Document Review
R i
 Inbound Triage
 HAFA/BAU Review  R l Time
Real Ti
 Cash Posting &
 HAFA Pre-Qual Reviews
 Customer Contact  Offer & HUD Instructions
CHOC’s  SSA Production  HAFA Compliance
 Missing Document Negotiation  CBR Coding
Letters  List Price  GSE Compliance
 NRV Calculation  HAFA
Validation
Borrower  File Setup  Investor Policy Maintenance
 Approval/Denial
Outreach  Document
 Loan Assignment Communication  Internal Policy  Loss Recognition
Perfection
Customer
Correspondence Offer Listed
25

26. Short Sale Consideration
Sh t S l C id ti
When is a short sale considered?
When is a short sale considered?
When the value of the property is less than the outstanding balance of the loan.
When the customer is unable to make their mortgage payments due to a hardship and all
g g p y p
other retention options have failed.
How does a customer qualify for a short sale?
Provide hardship information and proof of hardship.
Financial difficulties (loss of employment, reduction in income, etc.)
Fi i l diffi lti (l f l t d ti i i t )
The loan is delinquent or will be an Imminent Default loan.
26

27. Short Sale Document Requirements
Borrower Real Estate Professional
R lE t t P f i l
– Hardship Affidavit/RMA – Listing agreement (If property is
– Dodd Frank Certification (HAFA) already on the market)
– Letter from any junior lien – Proof of MLS
holder(s) agreeing to accept a – Sales/Purchase Contract with all
settlement to release their applicable addenda
lien(s)
– 3 Comparable Active Listings
– Authorization to provide and
Authorization to provide and
– HUD (Estimated Closing
( i d Cl i
release information – allows
Statement)
agent or designee to discuss the
account with Chase
– Financial information if required
Financial information if required
by the investor or mortgage
insurer (MI):
• Proof of Income
• Two most recent bank
Two most recent bank
statements
• Last two years’ tax returns
27

28. HAFA Program Overview
HAFA P O i
The Home Affordable Foreclosure Alternatives (HAFA) Program provides additional options to
avoid foreclosure and offers incentives to borrowers, servicers and investors who employ
avoid foreclosure and offers incentives to borrowers, servicers and investors who employ
liquidation strategies (short sale and deed‐in‐lieu) instead of pursuing foreclosure.
The borrower will receive the Short Sale Agreement (SSA) with related
documentation. It will contain the acceptable list price and the expiration date of the
documentation It will contain the acceptable list price and the expiration date of the
Pre Sale (SSA)
SSA. The borrower must list the property with a real estate agent at a price that will
support the minimum net proceeds.
When an offer is received, the borrower will submit a Request for Approval of Short
Sale (RASS), along with the required documentation to be approved within 3
Offer (RASS) business days. The servicer will approve the sale, provided it will generate the
minimum required net proceeds and will comply with the terms given in the Short
g
Sale Terms and Conditions Agreement.
Alternative Rass If an offer to purchase a property is made before the servicer provides an SSA, the
(ARASS) borrower will submit an Alternative RASS for the servicer s consideration.
borrower will submit an Alternative RASS for the servicer’s consideration.
28

29. HAFA Short Sale Approval Process
Alternative Request for Approval of Short Sale (Alt RASS)
– Negotiator compiles all of the required documentation.
– Negotiator will evaluate offer presented and determine if any negotiation is required for the
price, closing costs, etc.
– Negotiator completes a gain & loss analysis once all negotiations are complete
Negotiator completes a gain & loss analysis once all negotiations are complete.
– The gain loss analysis is presented for short sale approval and may require investor
and/or mortgage insurance (MI) carrier approval(s) prior to final Chase internal
approval.
Short Sale Approval (SSA)
– Pre‐Contract Specialist compiles all of the required documentation.
– Pre‐Contract Specialist evaluates for HAFA eligibility.
– Pre‐Contract Specialist completes a gain & loss analysis once they have values and the
HAFA documents.
– The gain & loss analysis is presented for SSA and may require investor and/or mortgage
insurance (MI) carrier approval(s) prior to final Chase internal approval.
29

30. HAFA Short Sale Agreement Timing
After Borrower responds
to HAFA solicitation, Borrower submits
Chase must complete and
Chase must complete and offer to Chase along
offer to Chase along
send SSA to borrower with the completed
Borrower must RASS
contact Chase & Chase must
accept HAFA SSA Marketing Period* approve/deny
offer
Trigger – 14 days 45days 120 days 3 days 10 days
Solicitation
*Chase will not permit an extension after the 120 day SSA marketing period expires
*Chase will not permit an extension after the 120 day SSA marketing period expires
30

31. HAFA Short Sale Benefits
 HAFA uses borrower financial and hardship information previously collected for
consideration of a HAMP loan modification.
 Allows borrowers to receive pre‐approved short sales terms before listing the
p pp g
property.
 Requires borrowers to be fully released from future liability for all mortgage debt
(no cash contribution, promissory note, or deficiency judgment is allowed).
 Provides $3,000 for borrower relocation assistance.
 Provides a $6,000 aggregate cap for subordinate mortgage lien holders.
$ , gg g p g g
31

32. HAFA Short Sale Buyer
 Sales contract must be executed with all appropriate addenda.
 Buyer(s) must have pre‐approval or commitment letter on letterhead from a
lender.
 Short Sale must be an “Arm’s Length” transaction.*
Short Sale must be an “Arm’s Length” transaction *
 No agreements permitted between the Seller and the Buyer that the Seller
will remain in the property as a tenant or later obtain title or ownership of
the property.
 Purchaser may not sell the property within 90 days of closing.
* Servicers have the discretion to approve sales to non‐profit organizations with the stated purpose that
Servicers have the discretion to approve sales to non‐profit organizations with the stated purpose that
the property will be rented or resold to the borrower, so long as all other HAFA program requirements
are met.
32

33. HAFA Program Comparison
Treasury HAFA Fannie Mae HAFA Freddie Mac HAFA
Effective date April 5, 2010 – December 31, 2012 August 1, 2010 – December 31, 2012 August 1, 2010
HAFA short  HAMP eligible (delinquent or  All Treasury eligibility criteria,
All Treasury eligibility criteria  All Treasury eligibility criteria,
All Treasury eligibility criteria
sale eligibility imminent default) plus: plus:
 Evaluated for HAMP and other  Not considered strategic default  Borrower must be 60 days
retention options (able but unwilling to make delinquent
 Not in an active HAMP Trial Plan payments)  Unencumbered assets and cash
 Chapter 7 & 13 active  Unencumbered assets and cash reserves less than the greater of
p
bankruptcies reserves less than the greater of
g $5,000 or three times the
5,
 Disqualified for HAMP or $5,000 or three times the monthly mortgage payment
requested short sale prior to monthly mortgage payment
evaluation for HAMP  Low surplus income
 Vacant no more than 12 months  No foreclosure sale scheduled or
prior to Short Sale Agreement, reasonably able to be scheduled
Alternative Rass or DIL within 60 days
Agreement.
Ag t  properties where no pending
ti h di g
judgment, judgment, hearing or
summary judgment is scheduled
within 60 days
HAFA deed in  At servicer discretion, according  Property listed for at least 120  Property listed for at least 120
lieu eligibility to investor requirements days at market price, except in days at market price under short‐
specific circumstances sale agreement
 DIL must accelerate acquisition  HAFA DIL approved by Freddie
of property by Fannie Mae, Mac
versus foreclosure
 No foreclosure sale scheduled
within 30 days, unless approved
by Fannie Mae
 Borrower has been evaluated for f
deed‐for‐lease, if they want to
lease the property
Property value  Must assess value in accordance  BPO or appraisal (if required),  Interior BPO required, within 30
with investor guidelines within 90 days days 33

34. HAFA Program Comparison
34

35. List Assist Department
Chase List Assist program was designed to proactively reach out to customers who
have properties listed for sale to assist through the marketing process and collect all
have properties listed for sale to assist through the marketing process and collect all
required documentation prior to the offer in an effort to expedite approval.
Through our List Assist team, we have enhanced our short sale efforts and
streamlined the process by:
 Proactively reaching out to homeowners who have listed their property.
 Working to gather the documents, provide guidance on property value and actively
market the home.
k t th h
 Establishing a dedicated team working closely with real estate agents on offers and
valuations.
 List Assist agents will also take incoming calls from agents and Borrowers to provide
information and instant contact with a Liquidation agent.
 The List Assist agents will explain to the borrower their options, review the short sale
process and request the needed documentation to move forward.
35

36. Short Sale Webpage
• The Short Sale website is easily accessed from the Chase Home page and provides the short sale
information packet and FAQ information about the Chase Short Sale process . The site can be
accessed through www.Chase.com/shortsale.
36

37. How Can You Help Us?
 Submit all required documentation as soon as possible:
 If an offer is not received on the property, provide an executed listing agreement and MLS
listing history.
 If offer has been received, provide all information discussed previously.
 Help the homeowners in negotiations with subordinate lien holders.
 Make sure all required signatures are on the relevant documents.
 Set reasonable expectations on timelines and valuations.
 Ensure that the proposed transaction is at “Arm’s Length.”
 Make every effort to ensure title and escrow are scheduled to close within the
approved timeframe.
37

38. Short Sale Resources
•Chase Borrowers can be referred to the following:
Chase Borrowers can be referred to the following:
•Toll‐free number: 1‐866‐233‐5320
•Or
•Access the Chase Short Sale website
•Access the Chase Short Sale website
•On line at https://www.chase.com/shortsale
•Or
Locate a Chase Homeownership Center
Locate a Chase Homeownership Center
•On line at chase.com/HomeownershipCenter
Short Sale Fax Line: 1‐866‐220‐4130
38

39. Default Liquidations
Short Sales
Abel Fregoso, Jr
g
Vice President
National Field Short Sales
October 2011

40. Potential for Acceleration – Short Sale Activity
From a rate of 7.8% (Q1 2009), residential delinquency rates continued to rise to a
high of 11.3% (Q2 2010). During the last 6 months of 2010 rates declined to a low
10.0% (Q4 2010). Q1 2011 reflected an upward trend to 10.2% - Q2 2011 pending.
Revisions to the 2010 and Q1/Q2 2011 GDP numbers show less economic activity
than previously reported, and no material improvement in new jobs or the current
level of unemployment – the factors will remain a strong influence on the residential
housing market. 40

41. Wells Fargo’s Loan Servicing by
yp
Investor Type
Wells Fargo is primarily a Lender and a Servicer, with 81% of the loans serviced by Wells Fargo, owned by outside investors.
Wells Fargo Loan Servicing
By Investor Ownership
(as of 2nd Quarter 2011)1
19% of the loans serviced by Wells Fargo
69% of the loans serviced by are also owned by Wells Fargo:
Wells Fargo are owned/
• Roughly 26% of this is Wachovia Pick-a-
guaranteed by Fannie Mae*, Freddie
19% Pay, which came to Wells Fargo as part
Mac ,
Mac*, and Ginnie Mae:
of the Wachovia acquisition.
f
• FNMA and FHLMC buy
• A portion is also Wells Fargo Home
loans up to a “conventional
Equity and Wells Fargo Financial.
loan limit” now $417,000 in
most markets. 69% 12%
• GNMA buys FHA and VA- 12% of th l
f the loans serviced by
i db
insured loans, which Wells Fargo are owned by private
provide mortgage funding for investors.
homeowners with little cash to • Private investors include pension
put down or U.S. Veterans. funds, investment houses, banks,
and insurance companies.
* Fannie Mae = FNMA, Freddie Mac = FHLMC, Ginnie Mae = GNMA
• Includes “America’s Servicing
Company,” or ASC loans, which are
loans that Wells Fargo did not originate
or underwrite, and which were serviced
under the ASC name. We only maintain
the servicing rights to these loans, we
are not the end investor.
1 Includes all residential mortgage loans serviced within Wells Fargo (WFHM, WFF, HE) and Wachovia (including PaP)
Confidential. For review only in Wells Fargo approved meetings. Not to be copied, shared or distributed beyond members of the approved meeting.

42. Strategic Partnership – Wells Fargo and Our
REALTOR® Partners
Wells Fargo’s primary concern and obligation is to our customers and investors. Our
goal is to exhaust all efforts to help customers remain in their homes through various
workout options.
Once home retention efforts are no longer an option, Wells Fargo continues to work
diligently to provide alternatives to foreclosure through short sales or deeds-in-lieu of
foreclosure. Our last resort is to foreclose.
Our partnership with experienced real estate brokers and their agents, familiar with
the management of distressed real estate, is key to our success and commitment to
quality service. Our REALTOR® Partners’ expertise helps us to deliver timely solutions
to assist customers, minimize losses to investors, and help to rebuild and stabilize our
communities.
These are unprecedented times in our industry, and now more than ever it is critical
that we partner together as leaders in driving solutions and results to help in the
p g g p
recovery of a strong housing market.
Our REALTOR® Partners help us by providing their:
- Familiarity with local market trends and community goals
y yg
- Established relationships with the real estate community
- Expert knowledge in short sale and REO liquidations
- Strong customer service and communication skills 42

43. Short Sales: Excellent Alternative to Foreclosure
A Short Sale Benefits Everyone
Everyone…
Customer Benefits
Alternative to foreclosure with planned & graceful exit, Wells Fargo or Investor
exit
pays closing costs and incentives in certain cases, credit report reflects
“Settled for Less than Owed.”
Buyer Benefits
Usually home is in better condition than buying a foreclosed property. Wells
Fargo or Investor pays some closing costs.
Investor Benefits
Savings over REO, reduced losses and corporate advances, eliminates non-
performing asset.
Junior Lien Holder B
J i Li H ld Benefits
fit
Higher debt payment resulting from short sale versus foreclosure transaction.
Community Benefits
Occupied and maintained properties, stabilizing neighborhoods, preventing
vandalism and other crime.
43

44. Our HAFA Strategy
• Filter incoming workload using
Regular
Short consistent metrics to control
HAMP Sales
Fallout and direct the inventory
HAMP
Eligible
Determine Path
• Consider HAFA first;
p p
proprietary Short Sales /
y
Proprietar DIL second
HAFA y
Short • HAFA inventory and the
Inventory
Sale Proprietary inventory are
Inventory going to remain distinctly
separate. 44

45. Primary Concerns or Myths Surrounding
Short Sales
Top concerns provided through external surveys and our own internal escalated complaints.
Primary Concerns and Myths
 Difficulty of obtaining mortgage financing – appraisals a special sore
spot.
 Fall-off in First Time Homebuyers affects overall demand.
 Banks are holding shadow inventory in the hopes values will increase.
 Lost documentation, multiple submissions.
 Short sale process takes too long and I lose potential buyers
buyers.
There are a number of decision makers involved in a short sale – the
more parties involved, the more complex th process becomes. All
ti i l d th l the b
parties must be aligned before the home can be sold, i.e., investors,
second lien holders, and mortgage insurance.
Most importantly, this is not a typical buy-sell transaction.
45

46. Partnering to Improve the Short Sale Process
We have worked to improve our processes and communications regarding short sale transactions. We hear
your concerns and are working diligently to reduce the completion timeline and improve communication.
Internal Improvements to Short Sale Process
 Staff resources have been increased by 57% over the last 12 months to ensure forecasted volumes can be
managed.
managed
 Proactive marketing efforts to provide information and education on short sale workout alternatives to customers.
 Wells Fargo is leveraging new technology (Equator) to provide a rules-based work flow system with direct portal
access for agents and customers.
 Process Re-Engineering project for all operation sites will allow for alignment between sites and investors and best
p
practices.
 Our field negotiator team and branch offices are expanding to support more difficult markets for customer face-to-
face assistance, and for seminars and training for agents.
 Integrating ServiceLink and Stewart Lender Services as 3rd party providers for Short Sales overflow.
 Automated Valuation requests for Short Sales Marketing campaigns.
 Short Sales Fraud monitoring through CoreLogic.
Wells Fargo is Persistent and Continuously Focused on Third Parties to Improve the Short Sale
Process
 Wells Fargo has led discussions with Fannie Mae and Freddie Mac, resulting in increased delegation authority,
foreclosure prevention, and streamlining processes. These efforts have resulted in industry wide solutions.
 We have partnered with Treasury to provide guidance on rules for the HAFA program.
 Expanding our REALTOR® Finder Tool to leverage experienced agents in all markets for referring our customers.
 Participation in Congressional Hearings and other government meetings to further educate and inform on existing
processes and concerns.
Communication and Education
 Multiple communication materials have been prepared for HMC’s, Agents, Customers and Real Estate Consultants
 Cine-meetings were conducted to provide consistent information across the country to address concerns and
provide detailed steps necessary to complete a successful short sale. 46

47. Challenges in the Short Sale Process
 Portfolio is serviced for other investors, and may require
obtaining investor approval from Freddie Mac, Fannie Mae,
etc.
 Mortgage Insurers & Junior Lien Holders take longer to
respond and may want cash contributions or promissory
notes from the customer
customer.
 Not all customers have a valid hardship, however many seek
to dispose of their property via a short sale transaction.
 Not all buyers can be qualified to purchase – bad credit
and/or limited cash for closing.
 High HAFA fallout rates; HAFA p g
g ; program limits q
qualified
properties, however, can review for proprietary programs.
 Technology in market place for short sale processing is in
the early stage of adoption industry wide and still needs
improvement.
 Some jurisdictions and investors are not allowing 47
f l l t t

48. Understanding Short Sales
Information to Help You and Your Clients
p
in the Short Sale Process

49. Short Sale Overview
How the Process Works
• Bank of America is the negotiator between the seller and the investor.
• M
Many l
loans h
have multiple i
lti l investors who must b satisfied.
t h t be ti fi d
• We have 500+ investors, and each can set different policies.
Communication
Investors Real Estate Agent
(Own the Loans) (Selling the Property)
 1st lien investors  Represents the
R h
(Mortgage Servicer) distressed homeowner
 Mortgage insurer
 Services the distressed  Identifies and obtains
 2nd lien investors
homeowner the releases of all
 Home equity loans non-Bank of America
 Has an obligation to
liens
uphold investor
requirements
Communication
49 Not intended nor authorized for consumer distribution. Bank of America: Proprietary. © 2011 Bank of America Corporation

50. Short Sale Overview
Two Paths
Homeowners have two paths to successfully complete a short sale.
I do not
have an
offer to
purchase
my home
Homeowner
Wanting to
Short Sell I have an
offer t
ff to
purchase
my home
50 Not intended nor authorized for consumer distribution. Bank of America: Proprietary. © 2011 Bank of America Corporation

51. I do not
have an
offer to
Short Sale Overview purchase
my home
Homeowner
Wanting to
Short Sell
Initiating a Short Sale Before There’s an Offer
Provides numerous benefits if the homeowner is eligible and qualifies
for a pre-offer program.
Homeowner Benefits Process Benefits
• $ - Relocation assistance. • Foreclosure hold, if applicable (subject to
• Deficiency may be waived. specific conditions).
– The mortgage debt may be • Faster decisions – within 10 business days
settled through the program
program. once an offer is submitted
submitted.
• Cash contributions or
promissory notes may not be Agent Benefits
required.
• Suggested list p
gg price is p
provided p
prior to
Note: When the homeowner initiates a marketing the home.
short sale before there’s an offer, all • Most elements of the short sale process are
program options are explored: HAFA, addressed upfront (including commission)
cooperative, traditional, etc. rather than at the end.
51 Not intended nor authorized for consumer distribution. Bank of America: Proprietary. © 2011 Bank of America Corporation

52. The Short Sale Process – a Detailed Look
Path No. 1: Initiating Without an Offer
The steps involved when you initiate a short sale before you have an offer.
Initiation 1. Initiate short sale and begin negotiating any 2nd liens not serviced by Bank of America.
Borrower Outreach 2. Upload the 3rd Party Authorization. Complete the Borrower Contact Information task.
If the homeowner qua es for HAFA, continue to
t e o eo e qualifies o , co t ue to…
Document Collection 3. Upload required documents to the Equator Library within 14 calendar days.
4. The short sale and the homeowner’s financial situation receive a deeper review.
Underwriting
No agent action required.
5. Coordinate access to the property, if needed. Notify the short sale specialist when you
Valuations
have mailed and uploaded the signed Short Sale Agreement.
Marketing 6. List and promote the property to potential buyers for up to 120 calendar days.
Offer Submission 7. Submit the short sale offer and supporting documentation.
Offer Analysis 8. Come to an agreement with the investor on terms of offer and determine closing date.
Closing
g 9. Complete the short sale by the date noted in the approval letter.
p y pp
52 Not intended nor authorized for consumer distribution. Bank of America: Proprietary. © 2011 Bank of America Corporation

53. The Short Sale Process – a Detailed Look
Path No. 2: Initiating Without an Offer
The steps involved when you initiate a short sale before you have an offer.
Initiation 1. Initiate short sale and begin negotiating any 2nd liens not serviced by Bank of America.
Borrower Outreach 2. Upload the 3rd Party Authorization. Complete the Borrower Contact Information task.
IfWhatoif t e homeowner does not qualify?
theat the e qua eseo HAFA, continue to
o eo
t e homeowner qualifies for
eo , co qua to…
ot t ue y
Document Collection 3. Upload required documents to the Equator Library within 14 calendar days.
• Homeowner and agent will be notified.
4. The short sale and the homeowner’s financial situation receive a deeper review.
Underwriting • Equator record will be closed.
No agent action required.
• 5. Coordinate access to the property, shouldNotify the short sale specialist when you
Agent and homeowner if needed. market the
Valuations
property. and uploaded the signed Short Sale Agreement.
have mailed
Marketing • 6. List and promote theinitiate a new buyers forsale 120 calendar days.
Agent should property to potential short up to in
Equator once there is an offer on the property. property
Offer Submission 7. Submit the short sale offer and supporting documentation.
Offer Analysis 8. Come to an agreement with the investor on terms of offer and determine closing date.
Closing
g 9. Complete the short sale by the date noted in the approval letter.
p y pp
53 Not intended nor authorized for consumer distribution. Bank of America: Proprietary. © 2011 Bank of America Corporation

54. Short Sale Overview
The Process Steps Are the Same in Both Paths
But you get a huge timeline benefit by completing steps in advance
of your offer.
offer
Path No. 1: Initiating before offer…
$ Offer $
Borrower Document Offer
Initiation Valuation Marketing Closing
Outreach Collection Analysis
Program Collect Determine List Home Submit * HAFA only. For other pre-offer
Eligibility Homeowne Home For Sale Offer programs, the time may vary.
Decision
Review r Value & in 100
Documents Sign Days!*
Program
Agreement
Path No. 2: Initiating after offer…
No offer
$ Offer $
Borrower Document Offer
Initiation Valuation Closing
Outreach Collection Analysis
HAFA Collect Determine Negotiate
Interest? Documents Home Value Offer,
Submit to
Investor,
Renegotiate
54 Not intended nor authorized for consumer distribution. Bank of America: Proprietary. © 2011 Bank of America Corporation

55. Short Sale Overview
Comparison of Paths
Path 1: Before There’s an Offer Path 2: After There’s an Offer
General Qualifications Each customers situation is considered separately Each customers situation is considered separately
by investors. by investors.
For HAFA program features including qualifications
please refer to HAFA Education Guide.
Timeline for Decisions HAFA - within 10 business days. For other
50 days on average.
After Offer Is Received pre-offer programs, the time may vary.
HAFA – none. For other pre-offer programs, the
Cash/Promissory Note The investor/insurer may require.
investor/insurer may require.
HAFA – none For other pre offer programs, the
none. pre-offer programs
Deficiency Pursued The investor may retain the right .
investor/insurer may require.
Auto hold once Short Sale Agreement is executed
Foreclosure Holds Vary by investor; require investor approval.
(subject to specific conditions)
Suggested List Price Provided. Not provided.
Approval/ Closure Rates High after qualification. Low-medium.
HAFA – $3,000. For other pre-offer programs, the
Relocation Assistance None.
amount will vary.
Unrealized Short Sale Optional deed in lieu of foreclosure
foreclosure. Optional deed in lieu of foreclosure
foreclosure.
55 Not intended nor authorized for consumer distribution. Bank of America: Proprietary. © 2011 Bank of America Corporation

56. Short Sale Tips
Three Key Steps for Real Estate Agents
Engage Homeowners Early
• Find out if the homeowner owes more than the home’s fair market value.
1 • Discuss short sale opportunities during initial conversations with the homeowner.
– If the homeowner would like to better understand their options or initiate the short sale themselves,
encourage them to call Customer Care at 1.866.880.1232.
• Explain the short sale process and how it can help avoid foreclosure.
Contact Bank of America Before the Home Is Listed
2 • Initiate the short sale in Equator – even if you don’t yet have an offer
–
don t offer.
The homeowner may be required to contact Customer Care to discuss participation in one of our
pre-offer programs, such as HAFA. If the homeowner isn’t eligible for a pre-offer program, then next
action is to market the home, obtain an offer and initiate new short sale in Equator.
Complete Required Tasks on Time
3
• Make sure all tasks are completed as soon as possible in Equator.
• Provide necessary documents as soon as possible to keep the process moving
forward.
• Communicate with your short sale specialist via Equator to reduce delays.
56 Not intended nor authorized for consumer distribution. Bank of America: Proprietary. © 2011 Bank of America Corporation

57. bankofamerica.com/realestateagent
Bank of America’s Real Estate Agent Resource Center
• Important news and updates about the short sale process and
enhancements
• Online subscriptions
to keep you informed
via email updates
• Free webinar replays
• Education library of
important documents
documents,
including tips to a
successful short sale
• Events
• Important links
• Contact information
57 Not intended nor authorized for consumer distribution. Bank of America: Proprietary. © 2011 Bank of America Corporation

58. Understanding Short Sales
Commitment to Continued Improvement
Bank of America clearly recognizes the need for continued improvement in
the short sale process and is committed to identifying new and different
f ff
ways to make the process transparent and efficient.
New Approaches
To Reduce Processing Times Where to Locate Additional Information
• Ongoing collection of feedback on Real Estate Agent Resource Center
process, people, and technology
bankofamerica.com/realestateagent
• Right-sized staff to meet service level
expectations; dedicated team of short Dedicated Customer Care
sale professionals 1.866.880.1232
Monday – Friday 8 a.m. to 10 p.m.; Saturday 9 a.m. to 5:30 p.m. Eastern.
• Enhanced our technology; monthly
upgrades ongoing For homeowners:
• Resources for short sale education Bank of America Home Loan Assistance
bankofamerica.com/homeloanhelp
58 Not intended nor authorized for consumer distribution. Bank of America: Proprietary. © 2011 Bank of America Corporation

59. Questions?
59 Not intended nor authorized for consumer distribution. Bank of America: Proprietary. © 2011 Bank of America Corporation