We are pleased to announce that we now offer fully integrated Loan modification and Subordinate Mortgage Documentation that flows directly from the systems calculations. We partnered with MRG Document Technologies to provide fully compliant and recordable documents for all HAMP options.*
Also in response to FHA’s Mortgagee Letter 2016-14, WaterfallCalc.com (WFC) was upgraded to include the changes to the loss mitigation waterfall as described therein. The changes are as follows:
1) Special Forbearance Plan – FHA has removed the requirement that a plan must last a minimum of 12 months. Previously WFC would calculate the lowest payment possible that allowed for a minimum of 12 payments, and would not allow the loan to exceed more than 12 months delinquent. Often this would result in a payment that was not affordable.
WFC will now calculate a payment that will be affordable to the borrower, or a minimum of $10 per month. The plan will last only until the loan becomes 12 months delinquent before terminating and requiring the borrower to submit updated financial information to be considered for a more permanent loss mitigation option.
2) Formal Forbearance Plan (WFC refers to as the Repayment Plan) – FHA now requires that any borrower with a front end debt to income (DTI) ratio of 31% or more, should be reviewed for the HAMP option, prior to the repayment plan option.
It is incumbent on our clients to perform a more thorough review of the borrower’s financial budget for any loan with a front end DTI of 31% or less, by requiring the receipt and review of actual bills to accurately reflect the true budget.
3) Standard Loan Modification – FHA has removed this option from the waterfall. Instead all loans should be reviewed to ensure that the new proposed mortgage payment is affordable. The HAMP – Loan modification only, HAMP – Partial Claim only and combination HAMP are all still available.
What you can expect:
• The system should be accessed via our website – www.waterfallcalc.com . It will now be split into Version 2.0 – loans entered prior to December 1, 2016 and Version 3.0 which will be for loans entered on December 1, 2016. You can find both links on the Client Portal/Servicers page.
• The loans you entered prior to December 1, 2016 will be found on version 2.0 or what we are referring to as the Legacy system. Access to Version 2.0 is gained through the “Client Portal”, “Servicer” and then select “Version 2.0”. You still will be able to enter new loans, edit previously entered loans and order Loan modification/partial claim documents, however anything run on the legacy system will be calculated based on the waterfall criteria that was in effect prior to Dec 1, 2016. This system will remain live for six months after which time it will be opened only at the request of a client seeking to perform due diligence or quality control reviews on seasoned portfolios.
• Version 3.0 will house the new live system which will base all calculations on Mortgagee Letter 2016-14. You will be able to retrieve PDF reports (Waterfall and Option Reports) from the PDF Reports selection available in the tool box (gear icon – top right on the dashboard) for any loan run on any previous version of WFC.
When you first enter the Version 3.0 – you will see a blank dashboard – a fresh start.
If you entered a loan on the legacy system, but now want the data to be analyzed and calculated based on the new criteria, it must be re-entered into the new live system.
• The Waterfall, special forbearance and HAMP reports were re-organized to reflect the required changes.
• We strongly recommend that before you enter any new information into WFC Version 3.0, you first clear the internet cache by clicking on the Ctrl + F5 keys.
1) Fully integrated escrow analysis – to ensure that you are properly including the appropriate amount of escrow shortage in the partial claim or capitalization.
2) Ability to efficiently order title reports on loans that qualify for the HAMP option, to comply with the FHA requirement to protect the first lien position of the modified loan.
3) Adding Veterans Administration and the Rural Housing Services loss mitigation waterfall options to the program.
*The loan modification/partial claim document option is available for an additional $75 per loan. An updated contract must be executed in order to activate this option. Please contact WaterfallCalc.com for more information.