main street capital short sale agreement (v1 8.11.08)

Main Street Capital Housing Corporation9710 South LucePerrinton, MI 48871Tel: 866-9314202 Email: [email protected]

Dear Homeowner:

Thank you for choosing Main Street Capital Housing to assist you with your mortgage trouble. We have helped many others in similar, or even worse, circumstances. Our company specializes in helping people find alternatives to foreclosure and the loss of their home. Our objective is to make sure that you realize no matter how bad your situation has become, it may be possible to avoid foreclosure if you take prompt action. Together, we may be able to resolve your delinquency without a foreclosure sale of your home.

The key to avoiding foreclosure is you! Through open communication with our loss mitigation negotiators, we will try to help you cure your mortgage default without foreclosure. The loss mitigation services provided by Main Street Capital Housing include:

Loan Modification: Lenders may agree to modify the terms of your loan, such as reducing monthly payment amounts, reducing the loan balance, or the interest rate, or fixing an adjustable interest rate.

Short-Sale: An agreement by the lender to reduce the payoff balance and allow you to sell your home to a buyer that you or your real estate agent has found.

Forbearance: A modified repayment agreement that lasts for a period of time. The goal of this plan is to allow you to catch up on any delinquent mortgage payments, while making current payments.

Deed-in-Lieu of Foreclosure: Giving the lender possession and title to your home rather than going through the foreclosure process.

Your fees cover as many of these services as are required, or that you elect to pursue.

Please complete the appropriate financial package and send by mail, email or fax. Your eligibility for one of these solutions will depend on our satisfactory analysis and the compliance with your mortgage servicer’s internal guidelines. Once the initial authorization is sent to us a $300 processing fee will be due and payable.

Please remember the amount of effort it took to finance your property and consider this process also depends on your cooperation with our staff in receiving all the necessary documents the loan servicer requires which are similar to applying for a new loan. After we receive your complete financial package, the standard processing time for each of the above alternatives is 30-45 days from the time a completed loss mitigation package is received. While this matter is being reviewed, collection and/or foreclosure activities are not placed on hold. Therefore, it is important that you act immediately.

Our process involves your lender/lenders in every step of the way and provides them with a detailed submission and the necessary information to make a quick informed decision. Depending on the financial institution there are usually three solutions to your mortgage crisis that can be achieved. After we receive your complete financial package we can advise you as to the best option available to you. Our fees are based on which course of action your financial institution and you agree upon.

Main Street Capital Housing Corporation 9710 South Luce Perrinton, MI 48871Tel: 866-931-4202 Email: [email protected] Web: www.mainstreetcapital.org

mailto:[email protected]

Documents to be signed by client and returned to Main Street

A completed & signed copy Intake Form.

A completed & signed copy of this package.

A completed & signed copy of the Authorization to Release Information for each mortgage.

A completed & signed Financial Statement & Authorization. (including the Hardship Letter)

Personal Documents to be provided by Client to Main Street

A signed copy of the listing agreement with all addenda and attachments.

A signed copy of the Sales Contract with all addenda and attachments. (signed by seller and buyer)

List and estimates of all known repairs.

Homeowners/Condo Association Information.

Borrower’s last two bank statements, checking and savings all pages.

Borrower’s last two paycheck stubs.

If self-employed, provide a copy of your YTD profit and loss statement.

A commitment letter from the investor/buyer’s lender or proof of funds for purchase.

A payoff demand statement or Lis Penders from the first mortgage lender, if applicable.

Borrower’s two most recent federal tax returns with all schedules. If this is a rental property. Include

your schedule E.

Borrower’s most recent summary statements for any 401k, retirement, or investment accounts.

Other:

If the above listed items are not collected in a prompt manner it will slow and/or jeopardize the processing of your file. Main Street Capital Housing and the Loan Servicer(s) reserve the right to terminate review of the loss mitigation request if Borrower fails to provide all requested documentation.


LOSS MITIGATION - Short Sales Guidelines and Pre-Negotiation Agreement - Page 1

Borrower(s) Name:

Property Address:

First Mortgage Servicer:

Account #: Second Mortgage Servicer:

Account #:

This document contains General Multi-Servicer Short Sale Guidelines and, when signed by all borrowers who are named on the account collectively, serves as a Pre-Negotiation Agreement and written consent for Servicer to commence review of a short sale request.

DEFININTIONS:

Short sale. A short sale is the sale of a property whereby the net proceeds (sales price less the closing costs) are insufficient to pay off the outstanding mortgage or lien balance(s) at the time of closing. Borrower is obligated to pay any shortfall in full in order to release the lien to the secured property, unless the parties have agreed otherwise by written of agreement signed by Servicer.

Hardship. A hardship is an event or series of events that are generally beyond the Borrower’s control and that resulted in a reduction in income and/or increase in expenses.

PROPERTY MARKETING:

The secured property should be formally listed with a licensed real estate agent/attorney as evidenced by a signed listing agreement and hold a valid state license.

The listing real estate agent/attorney should list the secured property with the local M.L.S. (Multiple Listing Service) to ensure that the secured property has fair exposure to all potential buyers/investors.

Any sales contract/purchase agreement entered into should state the purchase price may be contingent upon servicer’s written approval of a short sale if there will not be sufficient fund to pay the lien on the secured property in full.

Any sales contract entered into should allow for a minimum of thirty (30) days from the date of sales contract acceptance by all parties (investors/buyers and sellers) to closing date.

Servicer is not a part to the Sales Contract or the seller in the transaction.



PROCESSING:

If the above referenced account is in default, any and all collection activities, including foreclosure proceedings will continue until an approved short sale has closed, the account has been pain in full, or the default has otherwise be resolved.

A delay in the foreclosure process, up to thirty (30) days, will be considered by Servicer and approval must be documented in writing and signed by Borrower and Servicer. In no case will a delay greater than thirty (30) days be approved.

The processing time for a short sale review is thirty (30) to sixty (60) calendar days from the date of receipt of the completed financial package.

Servicer may require a valuation of the property based on an interior and exterior inspection. Servicer reserves the right to terminate review of the short sale request if the Borrower fails to provide Servicer’s appraiser or realtor with such access to the property as deemed necessary by Servicer, or the designated appraiser or realtor. The cost of the valuation will be the sole responsibility of the Borrower.

Your Servicer reserves the right to request additional documentation as may be necessary to verify a change in Borrower’s financial situation and/or hardship or the status of property prior to close of the short sale. Such documentation may include re-verification of Borrower’s financial status at the time of loan origination.

Borrower’s execution of a quitclaim deed will not automatically release him/her of liability under the referenced loan. A quitclaim deed only releases an ownership interest in the property. Likewise, the attempt to execute a short sale without Servicer’s consent will not automatically release Borrower from liability.

Servicer expressly reserves the right to not accept the transfer of title to any secured property unless it has entered into a prior written agreement to accept the transfer of title.

Borrower must contract all subordinate lien holders prior to closing to secure a written release of each lien in recordable form.

COMMUNICATIONS:

Servicer’s communications regarding activities and the decision status of a short sale request is limited to Borrower and/or Borrower’s representative (MAINSTREET CAPITAL HOUSING).

Servicer’s communications regarding account status, payment history, Borrower’s financial status, or ability to contribute to a shortfall is restricted to Borrower and/or Borrower’s representative.

Servicer’s communication with the listing real estate agent/attorney is limited to marketing activities for the subject property and the terms and conditions of the Sales Contract, unless prior written authorization has been received from the Borrower.


Servicer’s communication with any third party other than Borrower, Borrower’s representative or the listing real estate agent/attorney is not permitted. The listing real estate agent/attorney is responsible for informing the selling real estate agent/attorney and investor/buyer of Servicer’s processing status and decision.



PAYMENT HISTORY REPORTING:

Servicer will not change the historical payment record to reflect a payment history other than the actual payment history. You are hereby notified that a negative credit report reflecting on your credit record may be submitted to credit reporting agencies. This information may include the historical actual payment history and account status.

Short SALE TERMS AND CONDITIONS:

Servicer not obligated to accept or approve a short sale.

Servicer’s short sale terms and conditions are based on the requirements of Servicer, investor, private mortgage insurance company and/or lien holder, if applicable.

Servicer’s communication and negotiations do not constitute a short sale approval.

Short sale approval must be in the form of a written short sale agreement signed by Servicer.

If Borrower requests any changes to Servicer’s terms and conditions, such changes must be requested in writing with supporting reasons and, likewise, must be approved in writing by Servicer.

If the written short sales agreement is not accepted by all parties within the designated time frame, the written approval becomes null and void.

Must be an ARMS length transaction.

Borrower must complete and return all items listed on Borrower’s Documents Needed section of this document (see next page - page 4). All documents gathered must be scanned & emailed to [email protected] or Faxed to (xxx) xxx-xxxx.

DISCLOSURE AND UNDERSTANDING:

I HEREBY ACKNOWLEDGE that I have read the following disclosure and understand and agree to each statement:

1. That my mortgage holder, even after agreeing to a short sale, may require that the difference between the original balance and the negotiated balance (short sale) be paid by me and hold me personally liable for such payment. I understand my lender will be requested to waive its right to seek a deficiency judgment as a condition of acceptance of an offer. If my lender won’t waive its right to seek a deficiency judgment as part of the settlement, I will have an opportunity to reject the settlement offered and allow the property to progress through foreclosure. Note: Although, it is not likely your lender will pursue a deficiency unless you have other significant assets. If your lender accepts a short sale offer, it is because it believes accepting the offer will represent a smaller loss than what it expects to incur when it sells the property after foreclosure.

2. Should the mortgage holder not require payment of the difference, such act may constitute a taxable event and I have been advised to contact a Certified Public Accountant, tax adviser or attorney. Note: You may have some tax consequences that you should discuss with your tax


3. advisor if your lender is forgiving a portion of your debt, whether a deficiency is created through a short sale prior to foreclosure or when your lender sells it after foreclosure. If your lender sends you a 1099C Forgiveness of Debt form, the IRS will expect you to pay taxes on the money you borrowed but never paid back, since the unpaid debt is treated as income. You may avoid paying the tax if you lived in the property as a primary residence for at least 2 of the last 5 years.

4. That my mortgage holder may refuse to accept a short sale and continue with foreclosure.

5. That I hereby hold MAINSTREET CAPITAL HOUSING, and their, assigns, companies and corporations, including members, partners and officers, harmless and fully indemnify same (including but not limited to attorney’s fees and costs, whether suite be brought or not, and at trial and all appellate levels, court costs and all other litigation expenses), with respect to the matters set forth herein.

6. MAINSTREET CAPITAL HOUSING is not a debt relief agency and we do not help people file for bankruptcy relief under the bankruptcy code.

7. We do not provide bankruptcy information, advice, counseling, documentation preparation, bankruptcy filing, or legal representation related to an existing or prospective bankruptcy.

8. If you want bankruptcy advice, please consult an attorney.

9. Any and all written or oral statements we give you about bankruptcy are our opinions only.

10.We are not lawyers, do not help people with bankruptcy filings and cannot give you competent legal advice about bankruptcy.

1. Client shall indemnify, defend and hold harmless the Main Street Capital Housing Corporation., its officers, directors, employees and agents for, from and against any and all claims, lawsuits, losses, damages, costs and liabilities of any kind arising from any default of you on any loan or the foreclosure of any deed of trust, except claims arising from the gross negligence or intentional misconduct of this office.

By signing below, I/WE HEREBY ACKNOWLEDGE that I have read this DISCLOSURES AND ACKNOWLEDGEMENT and understand and agree to each statement.

Borrower Signature: Date:

Print Borrower Name:

Borrower Signature: Date:

Print Borrower Name:


MITIGATION AGREEMENT – Page 1/2

The undersigned CLIENT hereby employs MAINSTREET CAPITAL HOUSING, as loss mitigation counselor and for assisting CLIENT with certain problems resulting from mortgage delinquency and/or foreclosure situations. MAINSTREET CAPITAL HOUSING HEREBY AGREES TO ACT AS SUCH TO ASSIST CLIENT IN RESTRUCTURING THE LOAN/LOANS, EFFECTUATING A DEED-IN-LIEU OF FORECLOSURE OR ACCOMPLISHING A SHORT SALE FOR THE CLIENT.

CLIENT NAME(s):

Address:

City, State, Zip Code:

1. APPLICATION: CLIENT REPRESENTS THAT THE INFORMATION GIVEN Main Street Capital Housing relative to the mortgage delinquency and/or foreclosure situation is complete and accurate including reasons for delinquency, mortgagee’s name, account number, the terms and status of the mortgage indebtedness and financials regarding personal household income and expenditures.

2. CHARGES: CLIENT shall pay Main Street Capital Housing the following sums for services rendered for restructuring loan/loans, effectuating a deed-in-lieu of foreclosure or completing a short sale:

a) It is understood that our services will be performed for an initial contract engagement fee of $300.00, which is due at the execution of this agreement. After receiving a signed copy of this agreement, a signed copy of the Authorization to Release Information and the engagement fee Main Street Capital Housing will assign a Workout Specialist and begin negotiating with your lender/lenders. This agreement remains in force until there is a resolution of the mortgage foreclosure by Main Street Capital Housing or the CLIENTS lender/lenders decline the solution(s). Additionally if Main Street Capital Housing performs as hired and information provided by CLIENT is incorrect and thus causes results not satisfactory to the intent of this agreement then Main Street Capital Housing can declare the contract null and void and cease working for client.

b) In the event a workout cannot be accomplished with the client’s lender/lenders the clients contract engagement fee of $300.00 will be credited back to the CLIENT

3. MAIN STREET CAPITAL HOUSING will not be responsible if CLIENT fails to provide MAIN STREET CAPITAL HOUSING with necessary documents (pay stubs, tax returns, hardship letter, bank statements, etc.) or fails to execute the necessary documents to complete agreements with the mortgage company or at a real estate closing.

4. CLIENT understands that Main Street Capital Housing undertakes only to perform services to alleviate the aforementioned loan problem.

5. CLIENT understands that they are not to contact the lender unless instructed by MAIN STREET CAPITAL HOUSING or other outside council or if contacted by lender to explain to them that they have sought assistance of MAINSTREET CAPITAL HOUSING for help and not to compromise or agree to any agreement or they will become responsible for the full fee due under the work agreement.


MITIGATION AGREEMENT – Page 2/2

6. LIABILITY: MAINSTREET CAPITAL HOUSING is limited to the money received from fees in connection with the services rendered and cannot be held responsible for the nonperformance of the CLIENT or the mortgage company.

7. CLIENT hereby authorizes MAIN STREET CAPITAL HOUSING to furnish any and all information including financial statements, contractual debts, bank statements, etc. to any mortgage company, agencies, or individual connected with CLIENT's mortgage to aid MAIN STREET CAPITAL HOUSING in assisting the CLIENT.

8. CLIENT understand that if my account is placed in the hands of an attorney and/or collection agency for collection, I will be obligated to reasonable attorney’s fees and collection fees and court costs incurred in connection with such collection. This agreement is governed under the laws of the State of Michigan.

Agreed and Accepted by Client:

Date Executed:

Client Name:

Client Signature:

Accepted by Main Street Capital Housing

Signature:

Title:


main street capital short sale agreement (v1 8.11.08)

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