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Ocwen Financial Corporation Version 3.0 Page 285 Corporate Training

Chapter 12: Short Sale

Home Retention Department Loss Mitigation Manual Short Sale


A Short Sale is specifically designed to help borrowers who are unable to afford their mortgage and want to sell their home to avoid foreclosure, even if the sale price may not pay off the entire amount owed on their mortgage. A short sale requires a number of parties (the homeowner, the buyer, the real estate broker, and sometimes mortgage insurance companies and other lenders) to work together to make this option successful.

Once we receive the complete documentation from the customer along with the package, it will take approximately 30 days for processing, and if approved, the customer will receive an approval offer letter that has to be signed and returned with the payoff funds.

If the customer has more than one lien on the property, both liens will have to be paid through the short sale.

The following are the types of short sale:

1. Home Affordable Foreclosure Alternatives (HAFA) Short Sale

2. In-house Short Sale (aka Non-HAFA Short Sale)

12.1 HAFA Short Sale

For homeowners looking for help selling their home and avoiding foreclosure, the federal government has introduced the HAFA Program. As a mortgage servicer, we are offering the customer the opportunity to participate in this program by utilizing HAFA short sale option if the loan qualifies. If the loan does not qualify, we may still be able to assist with an Ocwen short sale program.

If the homeowner qualifies for the HAFA program, they will receive $3,000 to help pay some of the moving expenses (this is referred to as Cash for Keys – CFK). The check will be paid to the homeowner by the settlement agent as a part of the closing, and this amount will be included in the short sale offer and the HUD-1 Settlement Statement. In the event there is any money left over from the sale after paying the entire amount owed on the mortgage plus the approved sale costs, the homeowner will not be eligible to receive the $3,000.

Effective June 1st 2012, customers are eligible for HAFA incentive only if the property was Owner Occupied and the customer has to relocate as a result of the HAFA resolution, provided the resolution is completed on or before 09/30/2012.

12.1.1 HAFA Eligibility Criteria First Lien

Closing on or before January 1, 2009

Property up to 4 units

Loan is in default or default is reasonably foreseeable

UPB

a. 1 Unit (Single Family): $729,750.00

b. 2 Units: $934,200.00

c. 3 Units: $1,129,150.00


Page 288 Version 3.0 Ocwen Financial Corporation Corporate Training

d. 4 Units: $1,403,400.00

e. Multi Family: Not eligible

Customers who meet the HAFA eligibility criteria should go for HAFA if trying for the short sale of the property, but can choose to apply for an in-house short sale, as long as they send a letter stating they withdraw their application to HAFA. Once that letter is received, the account will reflect HAFADW code (HAFA application withdrawn by customer). You are not allowed to enter this code if the customer verbally states he/she does not want to apply for HAFA and has to ask the borrowers to send a letter.

Changes/Updates to HAFA

MHA issued Supplemental Directive 13-04 on June 13, ’13 which announced the extension for MHA’s HAFA December 31, 2015.

Thus, the HAFA transaction must be completed on or before September 30, 2016.

Simply put, the HAFA Short Sale or Deed-in-Lieu must have a transaction closing date on or before September 30, 2016.

If Ocwen has had contact with a borrower in connection with any of the above MHA programs, but is not in receipt of the minimum program participation documentation described above on or before December 31, 2015, or has determined it will be unable to complete (as described above) the HAFA transaction on or before September 30, 2016, Ocwen will must notify the borrower in writing that he or she cannot be considered for the applicable MHA program and provide information about other loss mitigation alternatives.

Investors who do not allow HAFA

The following Investors do not participate in the HAFA program: 2489, 2563, 2635, 2636, 2638, 2645, 2648, 2649, 2650, 2651, 2663, 2665, 2666, and 2667.

Short Sale Checklist

When you have spoken directly with the borrower (specially required when the borrower is represented by an authorized third party – that is, a broker) and have determined that the borrower cannot qualify for a modification, attempt to work with the borrower towards a Short Sale.

The initial contact with the borrower will determine what kind of resolution will be offered.

12.1.2 Short Sale Requirements The following are the short sale requirements:

Authorizations from the borrower for a third party, if the third party will be negotiating on the borrower’s behalf

A completed copy of Ocwen’s Short Sale Package



o You can send the borrower or their authorized representative a completed copy of Ocwen’s Short Sale Package by entering the SSPK code into REALServicing® and under the comments supply the name of the person to whom the package should be sent and the delivery method-fax #, email, and/or mailing address

Written or updated verbal financials, not older than 60 days (the package will include a financial form anyways)

Borrowers Hardship Letter

Updated copy of Signed Sales Contract/Sale agreement

A copy of the listing agreement (listing history also if required)

The copies of last 2 years W-2 statements

The copies of last 2 years Federal Tax Returns

The copies of 2 most recent pay stubs (if the borrower is salaried)

The copies of last 2 months bank statement (both savings and checking accounts)

HUD 1 (preliminary) or estimated Net Sheet

o However, we will need a copy of the final HUD 1 when the borrower closes

o Realtor’s commission (including both realtors) fees can be up to 6%

o Six thousand dollars maximum to all junior liens not serviced by Ocwen in a case of an in-house short sale

o Eight thousand fife hundred dollars will be the maximum to all junior liens not serviced by Ocwen in a case of an in-house short sale

o Closing cost must not exceed 2% (exception is when the property value is very low we may allow up to 4%)

o If 1st and 2nd liens are serviced by Ocwen and belong to the same Investor, then the full net to Ocwen (for both liens) should be in line 504 (net to 1st Lien) and line 505 (net to 2nd lien) should reflect $1.00

12.1.3 Short Sale Approval Criteria The following are short sale approval criteria:

Check Investor Rule to see if the Investor allows Short Sale and the requirement

The Mid Market Value should be updated in the last 6 months unless the investor requires a more recent value

The closing cost cannot be more than 2% (exception is when the property value is very low we may allow up to 4%)

The broker’s commission should not be more than 6%



It is imperative that Ocwen receives all the required documents in order to conclude the discounted payoff resolution and Ocwen’s Discounted Payoff Letter will NOT be issued to the borrower or their authorized representative until Ocwen has received the documents for a thorough review by the short sale team

When Ocwen has received all of the required aforementioned documents, a CSRVD Alias Code will be placed in REALServicing® by the HRC processors once they have processed the documents

o Once this code is entered, an acknowledgment letter will be sent out to the customer

o This letter is only sent out once, and it is reflected under SRVD code

If the documents received are incomplete, the HRC processors will enter an INSRVD Alias Code indicating the SS Package was returned incomplete

o Further the HRC processors will send out a missing documents letter indicating what is missing and will close the workflow on the loan

You use the UPD to view process to look up these codes to see the status of the short sale offer

12.1.4 Short Sale Offer Review Process The following is the short sale offer review process:

If the negotiated offer losses in LRM and the borrower and/or authorized third party are unwilling to negotiate a different net to Ocwen, then an SSOR code (short sale offer rejected) is entered into REALServicing® which causes a short sale denial letter to be issued to the borrower/authorized third party

o Finally the workflow on the loan is closed

If you can find a counter offer in the system (for example, the investor requested a minimum of $100,000.00 to accept the short sale), you can provide that amount to the customer

o In the case where the offer is rejected for being too low, but no counter offer in the system, you should not provide any amounts to the customer and just advise to try to get a higher offer and send it to us

If the negotiated offer wins in LRM, which means the required SS criteria is met, LRM will place the following codes in REALServicing®:

o SSRA = Short Sale Review Approved

o CMAP = Generates the workflow for underwriters to approve and send out the discounted payoff letter, indicates to whom and how the letter is to be delivered – This is also the HRC’s pending code

The underwriting team reviews the CMAP and sends a Discount Payoff Agreement and Release of Claims upon approval under the code DISC.

o The Discounted Payoff Letter will have a date by when it must be returned signed by all appropriate parties along with a final HUD-1 and funds due to Ocwen



o The final HUD-1 must be signed by seller, buyer, and both parties’ realtors

Funds received must be in the form of a certified check or a bank wire transfer. If the underwriters deny the CMAP, they cancel the workflow for DISC and enter DLWC, and you need to review and re-enter CMAP if applicable

When the negotiated offer requires upper management and/or Investor review for further processing the short sale, the codes to use include:

o SSSR – Management approval)

o MIIV – Investor and/or Mortgage Insurance team approval

All approvals will lead to CMAP and all denials need to be countered for better offers.

Note: When you enter a CMAP and there is a need for investor and/or mortgage insurance approval, underwrites will have to wait until the approvals are granted before being able to enter the DIC code. Hence, they will enter a DLWC code 13 (DISC Letter Workflow Cancelled code 13). This is not that the offer is being rejected, is just that the underwriters will have to continue the review only after the approvals are obtained. You do not have to re-submit the CMAP.

o SSSR is for submission of the short sale for review by management (for 2nd liens as CMAP has to be entered manually as they cannot be run through LRM – Review Discounted Payoff Procedures section). Upon review of the offer, they will note REALServicing® with either a SSRA (approved) or a SSRD (denied). SSRD will happen in cases where the loss is more than $300,000 and also when the net to 2nd lien is more than $6,000 or if any other requirement is not met

o MIIV is entered if an Investor or Mortgage Insurance (MI) Company approval is required to further process the short sale. Code IRAR is for investor review and INVAPD for approval code while IRRC/INVINF is for a denial. Code MIAR is entered for MI review and MIAPP is for an approval while MIRC is for a denial

To complete the resolution, Ocwen should receive the signed discounted payoff letter, a signed final HUD-1 (SDLR), and the certified funds owed to Ocwen (SFPA). If the signed documents are not received, code ISDLR is entered

12.1.5 Foreclosure and Short Sale As a company’s procedure, Ocwen will not postpone FC sale dates due to short sale offers being received. Hence, if a customer wants to process a short sale and has a confirmed sale date, he/she will need to close before the sale date.

Usually, when there is a confirmed FC sale date within 30 days and the application has missing documents, the file will show an SSOR9 (unable to close before the confirmed foreclosure sale date). If the customer wants the review to continue, then the SOSA code must be entered.

The SOSA code is for the short sale review to continue, however you must advise the customer that the sale date will not be postponed and the closing will have to occur before the sale date.

The following information is required in the SOSA:

Confirmed FC sale date



GTD for the short sale

Has the Borrower/Authorized third party been advised about the No Postponement policy?

o You need to enter Yes or No

Cash Deal?


Is escrow Open?


Borrower/Authorized third party acknowledged the CSD?


Borrower/Authorized third party acknowledged that they will close before the sale date and will not call back for postponement if unable to close?


Additional Comments: Not mandatory

12.1.6 HAFA Review Process SSPK – Short Sale Package Requested

You will be able to place a request for the package to be sent out via fax, email, or mailing address.

SSNT – Short Sale Package Sent



HSRVD – Home Affordable Foreclosure Alternative - Short Sale package received

Once the customer sends the package, the documents will be uploaded in CIS, should You have any question.

HAQSS – HAFA Eligibility Review in Process



HAFACO – HAFA Review in Progress – Additional Information Required

This code indicates if there are any missing, incomplete, or incorrect documents.

HAFACO1 – HAFA Review in Progress: Incomplete Documents Received



The agent may also see this code instead of HAFACO showing the missing, incorrect, or incomplete documents.

HSSMDLS – HAFA Short Sale Missing Documents Letter Sent.

This code indicates that the letter showing the missing documents was sent to the customer. It also indicates the delivery method used.

HRASSR – Alternate to RASS Package Requested



This code is seen when the approval letter is requested as the short sale offer is approved.

HRASSS – HAFA Short Sale Pre-Approval Letter Sent

When the approval letter is actually mailed to the customer, this code will be entered in REALServicing®.

HARASSA – HAFA short sale offer accepted



Once the customer sends the signed approval letter and it is received and accepted by Ocwen, this code is entered to indicate the same. The customer just needs to send the funds by the specified date for the short sale to be completed.

HSFPA – HAFA Short Fall Payoff via Pre-Approved Sale

This code is entered once the funds are received, showing the date when the funds were received and the amount.



12.2 In-house (Non-HAFA) Short Sale Process

In the eventuality of the loan not qualifying for HAFA, the account will be reviewed for a Non-HAFA Short Sale

SSPK – Short Sale Package Requested

You use this to place a request for the package to be sent out via fax, email, or mailing address.

SSNT – Short Sale Package Sent

CSRVD – Short Sale Correspondence Received



Once the customer sends the package, the documents will be uploaded in CIS, should you have any question.

INSRVD – Incomplete Short Sale Package Received

This code indicates what is missing or it just give a code (for example, “incomplete Short Sake Received: 9”. Please refer to the following tables for the INSRVD codes)

If there are missing documents in the application, the processing team will review whether there is a confirmed FC sale date within 30 days. If there is, then the offer will be rejected under SSOR9.

If the customer wants to continue the review of the file, then the agent must enter code SOSA with the pertinent details.

SSDM – Short Sale Missing Documents Letter Sent



Whenever there are missing documents a letter will go out to the customer informing of the same. Once the missing documents are received, the system will show a new CSRVD code.

SSRA – Short Sale Resolution Approved

After you run LRM, if the short sale scenario wins, the system will enter an SSRA. Please note that this is not a final approval, but only the systems approval. The short sale still needs to be reviewed by underwriting to determine if it can be finally approved and the approval letter can be sent to the customer.

CMAP – Collateral Resolution Approved Pending Execution



This is the pending code for you and will also get entered through LRM. This code triggers the workflow for underwriters to review the offer and send the approval letter.

DLWC – DISC Letter Workflow Cancelled

If there is anything incorrect in the CMAP submission or in the documents, the underwriting team will enter this code to cancel the processing of the DISC. You will need to solve the issue and re-submit the resolution if applicable.

SSOR – Short Sale Offer Rejected

You may also find this code if there is anything incorrect in the application documents.

This example shows code as the reason for rejection. The code used to mean that the Net to Ocwen was not clearly mentioned in the HUD-1.

Same as with the DLWC, the agent needs to solve the issue and re-submit the resolution.

DISC – Discounted Payoff Agreement and Release of Claims



This code is the final approval for the short sale. It also means that the approval letter (agreement) was sent out. The borrowers will need to sign this agreement and send it back to Ocwen (via mail, email, or fax) along with a copy of the signed final HUD-1 and the funds.

The DISC has a GTD by when all of these need to be received by Ocwen.

SFPA – Short Sale Payment Accepted

12.2.1 Final HUD Approval Requests If a customer is requesting final HUD approval before closing, please advise the customer to send a copy of the HUD to the below-mentioned email address or fax number. Please ensure to remind the customer to mention the loan account number in the subject line of the email or cover sheet of the fax and to mention a return fax number or return email address along with the account number in the cover page in case its being faxed.

After the final HUD approval is sent, the account will be coded with the alias code FHAS.

This code is entered by the person who reviews and approves the final HUD submitted by the customer. This mailbox will be monitored and reviewed by the short sale team supervisors.

Please be advised that this email address is only to be used when the caller is asking for a final HUD approval on an account where an active approval letter (DISC, HRASSS, or HRASSE) has already been released. Freddie Mac and Fannie Mae accounts will follow the same procedure. This process does not include GS, VA, FHA, Litigated, CU, HCU, ADVC, or any other specialized accounts.

The turnaround time to process this request is 24 to 48 business hours.

Do not give this email address or fax to request for an approval letter or for an extension. Any inappropriate request should not be processed.

Please advise the customer that the final HUD approval is not mandatory with Ocwen. The DISC or HRASSS we send is already an approval to the preliminary HUD they have sent. If there are any changes to the HUD, they have to send it prior to the approval. After the approval, we do not need to review the file again unless there is a change to the Net to Ocwen or Net to second lien which is not with Ocwen. If they state that the buyer has changed, they can send the final HUD with those changes and an addendum along with it. Email address: [email protected]

Fax Number: 561-682-8010



In-house Short Sale Flowchart



HAFA Short Sale Flowchart



Complete Short Sale Review Flowchart



12.3 Requesting Valuations

When the customer is attempting to work on a resolution, Ocwen may need to conduct a valuation of the property to determine the type of resolution that can be offered to the customer and whether a certain resolution can be approved.

Valuations are required when working on a short sale to ensure the value at which the property is being sold matches the actual market value of the property.

There are different types of valuations that can be done:

BPO – Broker’s Price Opinion: The estimated value of a property as determined by a real estate broker or other qualified individual or firm

A broker price opinion is based on the characteristics of the property being considered. Some of the factors that a broker may consider when pricing a property include: The value of similar surrounding properties, sales trends in the neighborhood, an estimate of any of the costs associated with getting the property ready for sale, and/or the cost of any needed repairs. It is important to note that a BPO is not the same as an appraisal.

A BPO can be exterior or interior, depending on whether the property is analyzed from the outside only (exterior) or from the outside and inside (interior). An interior BPO provides a far more accurate result.

Appraisal – The valuation of the property by the estimate of an authorized person

For a valid appraisal, the authorized person will have a designation from a regulatory body governing the jurisdiction the appraiser operates within.

Appraisals are typically used either for taxation purposes or to determine a possible selling price of a property in question. The appraiser can use a number of valuation methods in order to determine the appropriate value to assign, including the current market value of similar properties, the quality of property, and valuation models.

CMA – Comparative Market Analysis: A CMA is usually done when trying to sell a property. It compares the property to be sold with similar properties in the area to ensure the value at which the property is being listed is fair in comparison.

This is usually done by the real estate agent or broker. Some investor-servicers may require this procedure to be done and the results sent when working on Short Sale resolutions (Ocwen is not requesting CMA anymore)

Ordering a Valuation in REALServicing®

Anyone needing to request a valuation to be done on a property will have to select first the type of valuation needed. Once the valuation type is selected, you must follow the following steps:

Appraisal: To request for an appraisal to be done on the property, you can enter code AVMRQ, which will create a workflow for the appraisal to be done in the property



BPO: To request for a BPO to be done on the property, the code BPOO needs to be entered in the account, specifying any details needed. It is important to remember that this code does not trigger a workflow, so it is mandatory to go to the Order Valuations tab in the scrolling buttons of REALServicing® and place the request through there as well

o Interior BPO: In the Order Valuations tab, you must select the order type B – BPO. If an interior BPO needs to be done, then we will need to contact the person living at the property in order to notify them of the need of this valuation and ensure we will be able to access the property. So, in the section for Special Instructions, you should enter the contact details (contact name, phone number, email address)

o Exterior BPO: To request an exterior BPO, you must select the order type E – Exterior. Since we do not access the property, there is no need to contact the customer, but any clarifications needed can be entered in the Special instructions field, as well as in the BPOO comment

CMA: To request for a CMA, you must go to the Order valuations tab in the scrolling buttons of REALServicing® and select the order type as Comparative market Analysis

State Restrictions

The type of valuation conducted depends on what it is needed for, the program’s requirements, and the investor requirements, as well as, State Laws.

Certain States do not allow some type of valuations to be done by a servicer while evaluating a Short Sale offer. Whenever State Laws do not allow a certain type of valuation to be conducted, REALServicing® will show the following message.

To replace B-type valuation, the system will prompt you to request E-type valuation

To replace M-type valuation, the system will prompt you to request for A-type valuation

Trigger the request as per the requirement and notate comments on REALServicing® accordingly.

The comment codes used are SSIMA (for interior valuation) and BPOO (for exterior valuations). Mention the type of request placed and the contact information to access property.



The following is a list of the States in which valuations type B (drive-by) and type M (interior BPO) are not allowed:

Alabama Connecticut Delaware New Mexico North Carolina Pennsylvania West Virginia

Note: request the valuations as stated above.

Closing Costs

The following is a list of possible Closing Costs involved in a Short Sale transaction:

Items Included in closing cost

2009/2010 Tax No Abstract Yes Admin & Process services to solicited LLC Yes Affidavit Yes All costs under Government section - County/Sales Tax Yes Appraisal Fee Yes Assessments No Association Dues No Association Fees Outstanding No Association Fees/Past Due Association Fee No Attorney fees Yes Bankruptcy Carve Out Yes Bankruptcy Search yes Carpet Replacement Yes Certificate of Redemption Yes City of Allentown – Rental Inspection Yes City of Palm Beach Lien Letter No City of Plantation(1st page) No City Violations No Closing Fee(COST)/Settlement Fee Yes Code Violation No Condo Association No Condo Dues(condo maintenance owed) No Condo Estoppel Fees No Condo Lien No Conveyance Fee Yes County Transfer Tax/Estate Yes




County Transfer Tax Deed Yes Credit for Buyer Closing Cost Yes Credit owners Policy Yes Credit to Buyer for County No Deed Yes Deed Draft Yes Deed Tax No Delinquent Taxes No Delinquent Utility Lien to City/Country No Delinquent Escrow Party No Dept. of Building and Safety 9A Yes Dept. of Housing Prevention and Development Yes Discharge Tracking Yes Discount fee to IRES yes Doc Sales/Preparation Yes Document Fee Yes Document Fee to HOA No Document Preparation Yes Driveway Lien No Dues No ECB’s & Open Sanitation Fines No Emergency Repairs Yes Endorsements (Infinity Title) Yes Environment Control Broad (ECB) Violation. (not a Judgment Lien) No Equity Law Office Yes Error & Omissions to Risk Mgmt Yes Escrow Fees No Escrow Payments No Estimate Fee to HOA No estimate NHD Yes Estimated Estoppel Fees/Letter Yes Estoppel Request Reimbursement No Estoppel Letter to Lien Write Solution Yes Estoppel PD in Advance No Excess Deposit yes Fedex & C.Chk For 3 Mtg Payoff yes FHA Credit to Buyer from Seller yes Final Lienable Utilities No For Work Performed No




Foreclosure Prevention yes FTHB State Transfer Tax Yes Ftitle No Gap Risk Update Yes Gas Bill No Georgia Mitigation Loss Mitigation Yes Govt Recording Charges. Yes Grantors Tax No Gross Receipts Tax on Commission Yes Hazard/Flood/H/O Ins No Hazard Report Yes HOA Dues (also TBD) No HOA Fees (also TBD) No HOA Lien No HOA Transfer Fee No Home Owners Warranty Yes Home Warranty Yes Home Warranty Policy Estimated Yes Home Warranty to be Determined Yes Homeowners Association (HOA) No Homeowners Policy No Kingham Law Group Yes Lien No Lien Search Yes Lien City Examination & Negotiation Yes Lien Letter No Loss Mitigation/Short Sale Admins to Olga Mena P.A. Yes Mobile Notary Fees Yes Mortgage Search Yes Mortgage Policy Premium Yes Municipal Line Search Yes Municipal Fees yes Natural Hazard Policy Yes Natural Hazard Disclosure Yes Natural Hazard Report Yes NHD Report Yes Notary Fees Yes NRCC & RCC (nonrecurring & recurring closing cost) Yes NY State Nondisclosure Credit Yes NYC Dept. of finance No




NYC Finance Tax Lien No NYC PCDS No Obtain Mortgage Discharged Yes Oil Tank Yes Open Permits Yes Open Violation No Open Water No Outstanding Homeowner Fees No Owners Association Charges No Owners Coverage Yes Owners Title Insurance Yes Owners Title Policy Yes Painting Yes Past Due Condo Fees No patriot Act Search Yes Pay Prb, Pay Draper and Kramer No Payoff of Judgment No Payoff of Judgment No PCDA Yes PDCA Credit Yes PDCS/PCDC Yes pension of Owners Policy Paid by Seller yes Pest Control Yes Pest inspection Yes pest Treatment Yes Pine Key Past Due Maintenance No PMG LLC to PMG LLC Yes Processing Fee Yes Property Condition Disclosure Report Yes Property Disclosure Report Yes Property Tax No Public Nuisance Violation No Reconveyance tracking Yes Recording Fee Yes Reimburse Chris Handy Yes Reimbursement Yes Relocation Fees or Expenses /HAFA Incentive No relocation($3000.000) No Repairs Yes Required Services that you can Shop for Yes




Retained by Realtor Yes Roofing bill Yes Sales Tax Yes Sales Tax Yes sandy City Est Yes sandy Suburban Est Yes Seller Title Services Yes Seller's Paid Closing Cost Yes

Sellers Subsidy(same as sellers concession)/Credit/Contribution /Closing Cost Yes Septic Certification Yes Service Fee – (Line 704) Yes Service Fees given below Broker Commission Yes Sewer Fee/Est to Clark County Water Reclamation No Sewer/Garbage/Drainage No Short Sale Services to Sea2Sky Capital LLC Yes Short Sale Processing Fees Yes Smoke/CO Certification Yes southwestern University Yes State Tax Stamps Yes Stamp/Tax Yes State Recordation Tax Deed Yes State Transfer Tax Deed Yes Subescrow Fees Yes Summer/Winter taxes No Supplementary Summary No Survey Yes Survey to Preferred Surveyors Yes Tax Bill No Tax Certification No Tax Defaults No Tax Payments No Tax service Yes Termite Estimated Yes Termite inspection Yes Termite Report Yes

The citations are like liens they fall into the lien bucket of the max $6000 payout they are not closing cost. No Title Examination Yes Title Insurance (any)/Fee Yes




Title Search Yes Town Violation Fees No Transfer Fee Yes Transfer Tax Yes Transfer/Disclosure to Estimate Yes Trash Fee No trustee Fee Yes Underwriting Fee Yes Unifund CCR Partners To Unifund CCR Partners Yes Unpaid Maintenance Yes Unrecorded Lien Search Yes Utility Companies/Lienable Utilities No Warranty Deed Yes Water & Power Fees No Water Bills No water Certification No Water Hold – NYC Dept. No WDO Inspection Yes Well to TBD No Wire Fees Yes Yard Work Yes Zone Disclosure Report Yes Home Protection Plan Yes Delinquent Association Dues No Retrofitting to be Determined Yes Cash for Keys No Payoff Demand Statement No

Short Sale – Important Codes

SSPK – Request for a Short Sale Package

INSRVD – Incomplete Short Sale Package Received

CSRVD – Complete Short Sale Package Received

SRVD – Short Sale Acknowledgment Letter Sent to Customer

SSSR – Short Sale offer Submitted for Management Approval

SSRA – Short Sale Offer Approved by FC Manager

SSRD – Short Sale Offer Denied

CMAP – (Pending Code) Requesting Discount Letter for Short Sale Offer

DISC – Discount Letter Sent to Customer



DLWC – Discount Letter Workflow Cancelled

SSOR – Short Sale Offer Rejected

This list is not exhaustive; however the above list is to help understand the very basic codes used in the Short Sale process.

12.4 Short Sale Extensions

There are 2 scenarios pertaining to request for extension on short sale offer, they are:

Scenario 1

- Loans where the GTD on DISC comment has expired

- Requirement – We require a request of extension letter or an Addendum to the sale contract with an extended closing date and HUD with the future closing date

Scenario 2

- If the GTD on the DISC comment is active and borrower needs an extension

- Requirement – We require a HUD settlement statement with an updated closing date (i.e. the date the realtors wanted to close the sale) and Addendum for extension of the purchase contract

The following is a screenshot of settlement date/closing date and addendum for extension.



On the receipt of the above-mentioned requirements, the short sale processing group will either enter SSREX or CSRVD comments for the review of extension of short sale request and necessary approval/denial comments will be posted.

12.5 Accelerated Short Sale Program

In an effort to increase short sale offers, generate the highest offer and minimize fraud, Ocwen and Altisource have partnered to develop a new short sale submission process.

Key changes:

Offer Submission: When the borrower presents a short sale offer to Ocwen, the borrower(s) and their listing agent will be required to list the property on Hubzu.com. Hubzu.com is Altisource’s online auction and offer management website. Ocwen will send property information to Altisource/Hubzu in order to auction the property.

Listing/Auction Process: Altisource will work with the borrower’s listing agent; manage the auction process and transaction closing. Altisource will attempt to negotiate all junior liens associated with the property..

Winning Bid: Once a winning bid has been identified as the highest and best net offer, Altisource will send the offer to Ocwen for review. Ocwen will continue to coordinate with the investor, insurer and communicate the decision of approval or denial of the offer to the borrower/authorized third party.

Note:

This program is applicable only for Non-HAFA short sales

The following loans do not qualify for this program:

GSE portfolio loans

Loans in active bankruptcy

Loans with FDD flags

Loans with Mortgage Insurance

Loans with confirmed sale date within 30 days



This program will initially be rolled out for properties in the following states:

Arizona

Florida

Colorado

Michigan

Ohio

Texas

Nevada

More states will be added as the program progresses. Eventually all short sale offers received by Ocwen will be sent to Altisource / Hubzu to participate in the program.

Altisource will provide a dedicated Customer Support Team to answer questions from borrowers, buyers and agents regarding the marketing and sales support services of the property. Ocwen will continue to answer all loan-servicing related questions.

Starting May 7, 2013, a comment code SSOR20 will be placed on all loans with incoming short sale offers in the states of Arizona, Florida, Colorado, Michigan, Ohio, Texas and Nevada (where new program is being piloted) and sent to Altisource to list the property on Hubzu.com.

All short sale calls regarding the program should be transferred to the short sale call queue (SSATP team)

12.6 Relationship between Ocwen, RHSS, Hubzu, and Altisource?

Real Home Services and Solutions (RHSS) and Hubzu are part of Altisource. Altisource is an authorized vendor for Ocwen.

Two components of Accelerated Short Sale:

1. Reactive Short Sale:

Borrower comes to Ocwen with their property already listed with a realtor and the property may or may not be under contract with a buyer

Ocwen will require the borrower and realtor to agree to list the property on Hubzu.com. Ocwen will only consider the highest and best offer as submitted through Hubzu.com

Ocwen will refer the loan to Altisource Solutions (Altisource), who will arrange for REALHome Services and Solutions, Inc. (RHSS) to list on Hubzu.com, and will appoint a Residential Sales Coordinator (RSC) to each transaction as a Point of Contact (POC) to assist with all real estate-related questions



If borrower and realtor refuse to list property on Hubzu.com, the property will not be eligible for short sale. Ocwen will then offer Deed-in-Lieu (DIL) resolution to borrower

Our Accelerated Short Sale Program provides assistance in junior lien negotiation by PTS (arranged through Altisource), and therefore relieves the listing agent of this task

2. Proactive Short Sale:

Ocwen arranges with borrower to list their property directly with REALHome Services and Solutions, Inc. (RHSS) for exposure on Hubzu.com

RHSS will assign a listing agent from their network to work directly with the homeowner, as well as appoint an RSC to answer questions regarding the real estate transaction

This will save the homeowner the time and effort of interviewing and securing their own listing agent, and fits nicely with the Cooperative Short Sale Program, as Ocwen will refer the borrower directly to RHSS upon issuing the pre-approval letter

Our Accelerated Short Sale Program provides assistance in junior lien negotiation by PTS (arranged through Altisource), and therefore relieves the listing agent of this task

What is different about Assisted Short Sale?

Eligible properties requesting short sale approval will be listed for auction on the website www.Hubzu.com, in an effort to obtain the highest and best offer

Ocwen will refer qualifying properties to Altisource

Altisource will manage the auction process, offer acceptance and transaction closing

Ocwen will approve or deny all offers submitted by Altisource

Altisource will provide a dedicated Residential Sales Coordinator (RSC) to answer borrowers, buyer’s, and agent’s questions regarding the property as it relates to marketing and sales support services

Premium Title Services (PTS), an Altisource affiliate, will attempt to negotiate all junior liens associated with the subject property (with signed authorization for borrower)

All loan servicing related questions will remain Ocwen’s responsibility. The Relationship Manager (RM) will still play a key role in helping the homeowner achieve loan resolution

Listing the property for auction provides several advantages:

For the Borrower:

Transparent and predictable approval process

Time saving auction bidding to decrease the delinquency period and achieve faster loan resolution

Open market listing to increase the likelihood of higher sales value



For the Existing Listing Agent:

Ability to maintain the short sale listing

Increased likelihood of an approved sale and earning a commission

Increased buyer traffic and marketing reach on Hubzu.com and syndicated listings

Predictable closing process with junior liens searched and negotiated by PTS prior to marketing

Parties Involved in Accelerated Short Sale Process and their responsibilities:

Altisource

Accept referral from Ocwen and update their servicing tool “RESWARE” with accurate information

Arrange Short Sale Referral Agreement to be signed by the borrower and the Listing Agent

Determine listing price based on Ocwen’s valuation report

Order preliminary title report and junior lien negotiation (if applicable) with PTS

Monitor auction activities and provide feedback to Ocwen

Review all submitted offers and submit highest and best offer to Ocwen

Obtain a fully executed Purchase and Sales Agreement (PSA) for the winning bid

Submit PSA and preliminary HUD to Ocwen for review and approval

Coordinate communication between Ocwen, buyer, borrower, listing and selling agents, and settlement agent

RSC will be the primary contact for listing agent, buyer’s agent and settlement agent

Coordinate successful closing and settlement of the short sale

Hubzu.com

Post all pertinent property information to the website

Activate the auction period

Monitor all auction activities

Send timely notifications to the involved parties

Start and stop auction cycles as required

Premium Title Services (PTS)

Order title report to identify junior liens

With authorization from the borrower, will negotiate and arrange for payoff of junior liens

If selected by the buyer as their settlement agent:



o PTS will prepare the preliminary and final HUD statements o Schedule closing of the transaction o Execute closing documents and disburse funds to close the short sale

Ocwen’s Responsibilities:

SS Processing Team SS ATP Team

Check loan eligibility criteria (Non-HAFA, Non-Agency, Non-MI)

Send out missing document letter and order updated valuation report, if required

Enter “SSOR20” code to send referral to Altisource

Accept / Reject the offer received from Altisource within 15 days of receipt of the complete documents

Short Sale Processing Team will ensure all communication to the customer/ ATP will also be copied to Altisource

Follow normal short sale process, underwrite the loan and update the required codes on REALServicing®

SS ATP Team will handle general

questions and inquiries and refer to Altisource RSC as needed

Establish a small SWAT Team to triage issues such as title issues with Altisource

Maintain contact with Listing Agent (ATP) as provided by the borrower or RSC as assigned by Altisource

Continue call outs to the ATP in regards to missing documents

Altisource to transfer calls to SS ATP Team when necessary (for loan related questions)

SS ATP Team to pursue DIL option with homeowner if short sale fails

Exclusion Criteria for Assisted Short Sale (as of March 2013)

HAFA eligible loans (see HAQSS code)

Mortgage Insured loans

Agency and Government Loans (i.e. Freddie Mac, Fannie Mae, Ginnie Mae, FHA, VA)

Standalone Junior Liens

Litigated and Contested Loans

Special Servicing Loans (SPEC Flag Loan) and Goldman Sachs Loans

Loans with a Confirmed Foreclosure Sale Date within 30 days of the request



Following are the new Alias Codes and will be used in the initial part of the process:

Post receipt of the complete short sale package along with Purchase and Sales Agreement (PSA) and the estimated HUD 1 settlement statement, current process codes will be used to notate REALServicing® and the process will flow accordingly.

Codes REALServicing® Code Description Explanation and Purpose

SSOR20

Your short sale offer cannot be considered at this time. Your property must first be listed with

REALHome Solutions and Services, Inc. (RHSS), Ocwen’s business partner for short sale activity.

After sufficient auction exposure, all offers will be reviewed for a final decision. In this way we will ensure that the best price is obtained for your

property.

Notify the homeowner of Hubzu.com requirement and triggers request for

Altisource team to arrange listing on auction website

To discuss this or other possible loan resolution alternatives that may be available, please contact us at 800-746-2936, Monday through Friday 8:00 am to 9:00 pm, Saturday 8:00 am to 5:00 pm or

Sunday 09:00 am to 9:00 pm ET.

RHLP REALHome Team listed the subject property on the

Hubzu.com website Indicates that the property has been listed

on Hubzu.com website for auction

RHLBF REALHome Team listed the subject property on the

Hubzu.com website, Buyer Found

Indicates that a potential buyer was found for short sale on the listed property through

Hubzu.com website

RHLBN REALHome Team listed the subject property on the

Hubzu.com website, Buyer Not Found

Indicates that no acceptable offer has been received for the listed property through the

auction process on Hubzu.com website.

Pursue DIL resolution on such accounts

RHLOR1 Seller no longer wishes to pursue short sale

resolution Notifies the Altisource team that seller does not want to pursue a Short Sale resolution

RHLOA REALHome Listed Offer Accepted, kindly proceed

further with legal formalities Ocwen accepts the offer presented by

Altisource, please proceed

RHLOR2 REALHome Listed Offer Rejected, Reason Code 2 -

Offer not acceptable as higher offer required Ocwen rejects the offer presented by

Altisource

RHLOR3 REALHome Listed Offer Rejected, Reason Code 3 -

Kindly restart the auction process to find new buyer for the subject property.

Instructs Altisource team to restart the auction process and find a new buyer for the

subject property. (buyer “Fallout”)



12.7 Cooperative Short Sale Program

Ocwen has implemented a Cooperative Short Sale Program as required under the Department of Justice’s (DOJ) Settlement Program. This program will only be available to loans under specific Investor codes. The program will be offered upon request for eligible borrowers who wish to be pre-qualified for a Short Sale prior to listing their property. Ocwen will not solicit homeowners for this program.

The program will be made available to borrowers who request a Short Sale but do not have a confirmed buyer. However, homeowners are required to send the complete Short Sale or RMA package.

The Sales Contract/Purchase Agreement, Listing Agreement and the HUD 1 Settlement Statement are not a requirement for the eligibility review.

Benefits of Cooperative Short Sale Program:

Under this program, eligible borrowers will be given 120 days to market the property and find a suitable buyer, during which time a foreclosure sale date will not be set.

Salient Features of the Program:

1. The Short Sale Team will review a submitted request. If eligible, a HAFA or non-HAFA pre- approval letter with a recommended list price will be issued. NOTE: An Interior BPO will be completed prior to the issuance of a pre-approval letter.

2. The borrower is given 14 days to return the signed pre-approval agreement along with a copy of the Property Listing Agreement, evidencing that the property has now been listed for sale.

3. The borrower now has 120 days (from the issue date of their pre-approval letter) to sell their home, during which time no foreclosure sale date will be set.

4. The borrower must submit a fully executed sales contract, preliminary HUD 1 Settlement Statement and the Program Terms and Conditions page (from the pre-approval letter) with the terms of the sale filled in, before the 120 day expiration date of the pre-approval agreement.

5. Upon receipt of the documents with the terms of the offer, the Short Sale processing team will review the offer and the documents as per our standard Short Sale process. If approved, a final approval letter will be issued with a 45 day expiration date.

6. If the borrower is unable to secure a buyer within the 120 days of the pre-approval letter, they can be reviewed under the existing guidelines for a standard HAFA or non-HAFA short sale once they secure a buyer.

7. Scripting is provided for all alias codes associated with the cooperative short sale program. In addition, scripting is in place that will guide our agents when an eligible borrower inquires about doing a short sale. The scripting will prompt the agent to determine if the property is already listed or sold. If it is not, the agent will be prompted to discuss the pre-approval option.



Exhibit 1.2: HUD 1 or Settlement Statement (Page1.)



HUD 1 or Settlement Statement (Page2).



Sample Discounted Payoff Agreement and Release of Claims Document

November 11, 2013 VIA FAX (888) 555-1212 Mr. ………. Re: Loan Number Property Address: 362 Thompson Street Morrow, OH. 45152 Dear Mr…..: Ocwen Loan Servicing, LLC has approved a discount payoff on the above referenced loan in the amount of $______________. This discount payoff option expires on _______________, that is, if you do not comply with the terms described below by this expiration date, this payoff option offer will no longer be available to you. To accept the discount payoff, you (i.e., any of the borrower(s) shown above) must perform the following prior to the expiration date of this offer: 1. Each l of the above-named borrowers must sign this letter, which includes a Release of Claims, on the

appropriate line under “Acknowledged and Accepted”. 2. You must fax a fully signed copy of this letter to my attention at the below listed fax number by

_______________; and you must send the original signed copy of this letter via regular or overnight mail to my attention to the following address:

Ocwen Loan Servicing, LLC

1661 Worthington Road

Suite 100

West Palm Beach, Florida 33409

Attention: ___________________, Loan Resolution Consultant

3. Ocwen must receive the entire payoff amount, either by bank wire transfer, bank check, money order, or certified funds, by no later than the close of business on --------, to the address listed at the bottom of this agreement.

4. You must fax a copy of the signed HUD-1 Settlement Statement to my attention at the below listed fax number by __________________. The HUD-1 Settlement Statement must be in accordance with the Good Faith Estimate, which Ocwen relied upon to approve this discount payoff. Any surplus funds must be paid directly to Ocwen Loan Servicing, LLC in accordance with the instructions in item 3 above. Under no circumstances shall any funds go the borrower

5. You authorize Ocwen to apply any funds which may be in your impound account, or in your suspense account, to any deficiency balance that you may owe to Ocwen.

6. (Optional) You (i.e., the Borrowers shown above) have/has agreed to sign a promissory note in the amount of $ , the full amount of which shall be applied to reduce any deficiency balance you owe Ocwen on your home loan account. The original of this promissory note must be sent to us along with the payoff funds.

Upon our timely receipt of the entire payoff amount and a copy of this letter, properly signed by each of the above-named borrower(s), we will advise our Client, Ocwen, to execute a release and a discharge of the Deed of Trust/Mortgage and, if necessary, to file a withdrawal in connection with any legal action it may already have taken, as of the date of your response to this letter, to collect this obligation.



RELEASE OF CLAIMS

As consideration for this discount payoff offer, which Ocwen is not otherwise obligated to make available to Borrowers, the receipt and sufficiency of which consideration is hereby acknowledged by Borrowers, and as a condition to your (i.e., Borrowers shown above) acceptance of this discount payoff offer, Borrower, for himself or herself and his or her heirs, personal representatives, successors, and assigns, hereby jointly and severally, knowingly and voluntarily releases, discharges, and covenants not to sue, Ocwen and its predecessors, successors and assigns, representatives, agents, affiliates, parents, subsidiaries, officers, employees, directors and shareholders, including this law firm (collectively, the “Released Parties”) from any and all claims, demands, liabilities, defenses, setoffs, counterclaims, actions, and causes of action of whatsoever kind or nature, whether known or unknown, whether legal or equitable, which he or she has, or may assert in the future, against Ocwen and the Released Parties directly or indirectly, or in any manner connected with this offer and with any event, circumstance, notice of default, action, or failure to act, of any sort or type, whether known or unknown, whether legal or equitable, which was related or connected in any manner, directly or indirectly, to the Property or to the servicing of this Loan. Borrower hereby further acknowledges and agrees that, to the extent that any such claims may exist, the value to the Borrower of the discount payoff offer by Ocwen contained in this letter, substantially and materially exceeds any and all value of any kind or nature whatsoever of any such claims. Nothing in this letter shall be construed to prejudice, waive, modify or alter any of Ocwen’s rights or remedies in law or in equity in collecting the entire amounts due and to come due on the Loan or be construed to waive any defense of Ocwen. Ocwen reserves the right to terminate this offer at any time prior to your timely acceptance of the terms set forth above. OCWEN LOAN SERVICING, LLC IS ATTEMPTING TO COLLECT A DEBT AND ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE. Yours truly, Ocwen Loan Servicing, LLC _______________________ Home Retention Consultant Toll Free Phone: Fax: ACKNOWLEDGED AND ACCEPTED: By:______________________ ______________________ (NAME) (NAME) Date: ____________________



PAYMENT REMITTANCE INFORMATION

(Always include Loan number with your payment)

VIA Bank Wire Transfer Ocwen Loan Servicing, LLC Fort Lee, NJ ABA #021000021 Ref: Attn:

VIA Federal Express Ocwen Loan Servicing, LLC 12650 Ingenuity Drive Orlando, FL 32826



The following are a list of codes for short sale denials and the reasons why the code may be documented:

INSRVD

Reasons Codes

Complete signed short sale package with updated financial(exhibit C) 1

Discount payoff requirements page 1 2

Discount payoff requirements page 2 3

Discount payoff requirements page 1 &2 4

Signed Exhibit A(authorization) 5

Signed Exhibit B (Hardship Letter) 6

Signed complete filled exhibit C( Financial Form) 7

Signed Exhibit D( authorization to access property) 8

Signed HUD with correct property address same as in real servicing 9 Signed typed HUD with correct property address same as in REALServicing® (Saxon investor) 10

Listing History( Saxon Investor) 11

Death Certificate(Saxon Investor) 12

DLWC

Reasons Codes

2nd lien amount not mentioned in CMAP/CMAP not entered on 2nd lien 1 BK approval required 2 Book Loss >150K or >300K 3 Charged Off/RE account 4 CMAP not entered via LRM 5 CMAP undone 6 Commission Incorrect/Not mentioned in CMAP 7 Details not entered correctly in LRM 8 GTD incorrect (Non-working day/expired) 9 HUD Missing/Not Clear 10 Interior BPO required 11 Listing History Missing 12 Manager/Investor/MI Approval Required 13 Manager/Investor/MI Denied 14 Market Value not updated 15 MMV < 80% 16 Net to Ocwen – Not mentioned in HUD/Does not match the HUD 17 Scenario does not win 18



DLWC

Discount Letter sent out on 1st Lien (Same Investor) 19 Eligible For HAFA 20 Eligible For HAFA; HAMP review pending 21

SSOR

Reasons Codes

The terms of the sale contract are not acceptable SSOR1

Mortgage Insurer denied the short sale offer. SSOR2

Investor does not allow Ocwen to accept a short sale offer SSOR3

Ocwen denied the short sale offer your loan is ineligible for a discounted payoff. SSOR4

No consent order received from Bankruptcy Counsel for Short Sale Offer. SSOR5

Ocwen is no longer your servicer SSOR6 Ocwen countered the short sale offer. Please call to discuss this offer further SSOR7 Excessive payments to subordinate liens/mortgages. SSOR8 Unable to close before the confirmed foreclosure sale date SSOR9 Tax information missing SSOR10 You have failed to provide the required HAMP documents SSOR11

Previously Used SSOR Codes

Book Gain is not between 15000.00 and (150000.00) SSOR11

Broker commission more than 6% of the sales price SSOR12

Mid market value less than 75% of the market value SSOR13

Net to Ocwen is not mentioned clearly in HUD SSOR14

Interior BPO valuation cancelled/Valuation cannot be ordered due to access issues SSOR15

Additional Information required by Investor / MI company SSOR16

Net to Ocwen is greater than total debt in LRW for 2nd lien SSOR17

SSOD

Reasons Codes

No short sale offer on the property SSOD1

Unable to establish contact after repeated attempts SSOD2

Ocwen is no longer your loan servicer SSOD3

Current offer denied, Requesting for a better offer SSOD4

Offer countered, But no offers for the past 15 days SSOD5

Does not meet investor requirement SSOD6

Short sale Offer withdrawn by the Borrower SSOD7



SSOD

Short sale offer not available currently SSOD8

Unable to access the property for valuation, Please call us SSOD9

Short sale approval has expired SSOD10



12.8 Request for Mortgage Assistance (RMA) Package









































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