LOSS MITIGATION
Short Sale Guidelines and Pre-Negotiation Agreement

This document contains Short Sale Guidelines and, when accompanied by all appropriate signatures (Borrower, and Servicer), is typical of a Pre-Negotiation Agreement and consent to commence review of a short sale request.

DEFINITIONS:

• Short sale. A short sale is the sale of a property whereby the net proceeds (sale 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 on 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 Borrowers 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.
  
• The listing real estate agent/attorney should have territory that includes the area in which the secured property is located.
  
• The listing real estate agent/attorney must hold a valid state license and be a member of the local Board of Realtors.
  
• The listing real estate agent/attorney should list the secured property with the local l\/I.l..S. (Multiple Listing Service) to ensure that the secured property has fair exposure to all potential buyers/investors.
  
• Any sales contract/purchase agreement Sales Contracts entered into should state the purchase price may be contingent upon Servicers written approval of a short sale if there will not be sufficient funds 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 contract acceptance by all parties (investors/buyers and sellers) to closing date.
  Servicer is not a party to the Sales Contract or the seller in the transaction.

PROCESSlNG:

• 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 paid in full, or the default has otherwise been resolved.
  
• A delay in the foreclosure process, up to thirty (30) days, will be considered by Servicer and approved only on an exception basis. Such exception approval must be documented in writing and signed by Borrower and Servicer. Approval of a delay will require evidence that all Sales Contract conditions and contingencies have been met. In no case will a delay greater than thirty (30) days be approved.
  
• The processing time for a short sale review is thirty (30) calendar days from the date of receipt of the completed financial package.
  
• Servicer requires 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 Servicers 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.
  
• A complete financial package includes all documents Servicer has requested from the Borrower and the listing real estate agent/attorney, including, but not limited to:
  
• Complete financial information from Borrower:
  
  
  • A signed copy of the listing agreement with all addenda and attachments.
  • A signed copy of the Sales Contract with all addenda and attachments.
  • A written, signed hardship letter from Borrower outlining his/her financial situation and the events that caused the financial hardship.
  • Borrower's last two bank statements, checking and savings all pages.
  • Borrowers last two paycheck stubs.
  • A commitment letter from the investor/buyers lender.
  • A Settlement Statement (HUD 1 or Sellers Net Sheet) indicating the allocation of all the proceeds of the sale.
  • A payoff demands statement from the senior lienholders, if applicable.
  • Borrower's two most recent state and federal tax returns with all schedules.
  • Borrowers most recent summary statements for any 401 k, retirement, or investment accounts.
  • Servicer reserves the right to request additional documentation as may be necessary to verify change in Borrower's tinancial situation and/or hardship or the status of the secured property prior to close of the short sale. Such documentation may include reveritication of Borrowers financial status at the time of loan origination.
  • Borrowers 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 Servicers 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.
  • Servicer reserves the right to terminate review of a short sale request if Borrower fails to provide all requested documentation.

COMMUNICATIONS:

• Seri/icers communications regarding activities and the decision status of a short sale request is limited to Borrower and/or Borrowers representative (i.e. attorney).
• Servicers communications regarding account status, payment history, Borrower's financial status, or ability to contribute to a shortfall is restricted to Borrower and/or Brrowers 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 communications with any third party other than Borrower, Borrowers 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 Servicers processing status and decision.

LOSS MlTlGATlONS:

• Servicer is not obligated to accept or approve a short sale.
• Servicers short sale terms and conditions are based on the requirements of Servicer, investor, private mortgage insurance company and/or lienholder, if applicable. Servicers communications and negotiations do not constitute short sale approval.
• Short sale approval must be in the form of a written short sale agreement signed by Servicer.
• Servicers short sale terms and conditions must be accepted by Borrower in writing.
• lf 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 Senricer.
• If the written short sale 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.

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 notitied 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.


IRS REPORTING: