Bad stuff can happen to good people. If that is you and you have not been able to make your house payments due to illness etc then PMI, the company that invented Mortgage Insurance (if you have one loan that is over 80% of the value of your home, you have MI) has a solution. Here goes:
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In the event that capitalization or a repayment program
is not feasible to reinstate the Default, PMI's SAVING HOMEOWNERSHIP AND REPAYMENT
PROGRAM (SHARP) pays an Advance Claim to
cover delinquent interest on the defaulted loan.
SHARP is a special workout program designed for
the delinquent Borrower(s) who clearly has the ability
to maintain future payments, but unfortunate
circumstances have forced them into Default.
SHARP gives the Borrower(s) the opportunity and
the motivation to maintain their loan obligation and,
most importantly, keep their home.
How Does SHARP Work?
After careful assessment of the situation by both
you and your PMI Loss Mitigation Specialist,
qualified Borrowers may be approved for a SHARP
advance to cover the outstanding accrued interest
on their mortgage and thus bring them current and
no longer in default. Note: late charges and other nonclaimable
advances are not covered.
PMI requires the Borrower to participate fully in the
SHARP program. As such, the Borrower needs to
provide full financial documentation to you as the
Servicer who would present it to PMI for review.
The Borrower would further agree to an interest-free
Note endorsed and transferred by the Servicer or
Investor to PMI to repay the funds advanced by PMI.
SHARP is a stand-alone Loss Mitigation option
presented by PMI. Yet SHARP can also be used
along with a Loan Modification or Loan Assumption.
Please see our “Delinquency and Claims Reference
Manual” on our website for more details on these
two Loss Mitigation approaches.
Which Borrowers Are Eligible?
There are three main factors in determining
Borrower eligibility.
1. First, the Borrower(s) must be a homeowner,
residing in the property that is in Default.
2. Second, although any defaulted loan can be
considered for SHARP, if any advance on the
current insurance policy is required to modify
the defaulted loan, title must still be vested in
the Borrower(s)/ Occupant(s).
3. Third, and most importantly, the defaulting
Borrower(s) must have a history of job stability
and the willingness and ability to maintain future
payments on their mortgage and the interestfree
Promissory Note with PMI.
What Types of Defaults Qualify for SHARP?
Defaults by Borrowers who have suffered from
a temporary loss of income, but who have the
ability to make future payments.
What Are the Steps in the Qualification Process?
A PMI Loss Mitigation Specialist is available to
work closely with you in determining which workout
program best fits the profile of the defaulting
Borrower(s). A decision will be made based on the
Borrower(s) qualifications, reason for Default, ability
to maintain future payments, and other pertinent
considerations.
Once approved, the PMI Loss Mitigation Specialist
will assist you in coordinating the details of the
SHARP Advance and the payment of funds to bring
the loan current.
What Documentation Is the Servicer
Required to Collect?
For a Borrower(s) to be considered for participation
in SHARP, you will be asked to present complete
financial package on the borrower(s), which would
typically include the following items:
Borrower(s)’ hardship letter,
Borrower(s)’ current financial statement,
Where applicable, documentation from the
Borrower(s) and all Creditors on any repayment
plan the Borrower(s) may have entered with
those Creditors,
Borrower(s)’ current pay stubs,
Borrower(s)’ Federal tax returns for the past two
(2) years,
Current Broker’s Price Opinion (BPO) or
Appraisal of the Property
What Are the Special Requirements?
To establish the Borrower’s full ability to maintain
payments, PMI may require successful completion
of a forbearance plan lasting no longer than four
months. When the Borrower(s) have demonstrated
that they can maintain their regular monthly mortgage
payments for this time period, PMI will process the
approved SHARP advance with the Service to cover
the past due interest payments.
The Borrower must agree to an interest-free Promissory
Note made payable to PMI for the amount of
the SHARP advance. PMI will provide you with the
Note to be executed by the Borrower. The terms of
this Note are very flexible, including start date, term
and monthly payment amount. PMI’s Loss Mitigation
Specialist will work with you to establish terms that
work for the Borrower(s) and allow for them to
cover both their mortgage and PMI note obligation.
In the event the Borrower goes back into default
and a Claim is filed, PMI would deduct the outstanding
balance of the SHARP Settlement from
the Claim Settlement amount.
Frequently Asked Questions about PMI’s
Saving Homeownership and Repayment Program (SHARP).
Now you can help your borrowers suffering temporary income loss keep their homes.
Simply contact your PMI Loss Mitigation Specialist or our Loss Mitigation team at:
loss.mitigation@pmigroup.com.
Or call 1.800.795.4764, Option #2.
Temporary
Solution.
Long-Term
Reward.
