Contract - IHCDA - Mortgage Foreclosure Prevention Counseling

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debt. A credit report is not sufficient to calculate the DTI ratio, as income must also be validated. 8. 4a Action Plan. Contractor will create an Action Plan which includes a timeline to eliminate unnecessary debt, minimize expenses, increase income, and increase savings. In addition, the Action Plan should include a plan for staying current on the trial or permanent loan modification as well as any applicable referrals. Different from a Level One Action Plan, the 4a Action Plan is focused on how the client can maintain the trial modification and manage his/her budget. If these items are part of the counselor's notes, NFMC requires that the information be transferred to a form titled 4a Action Plan so that the assessment and course of action are clearly defined for the client and for compliance testing. 9. Counsel on Stavine Current. Contractor must discuss terms of mortgage and how to stay current -- even if/when rate resets, explain the incentive component and that if the client redefaults s/he will be terminated from the program. A loan will be considered to have redefaulted when the borrower reaches a 90-day delinquency status under the Mortgage Banker Association delinquency calculation. Note: in order to successfully complete the initial trial period (at minimum three payments at modified terms), a borrower must be current by the third payment. 10. Referrals. Refer to job training or referral programs if applicable. 11. Date of Follow -Up Meeting_ Establish follow-up schedule with borrower, with at least one additional appointment, as required by the Action Plan. It is expected that a client will notify their counselor if they have a significant change in circumstances. During the follow-up meeting, the Contractor must discuss terms of mortgage and how to stay current- even if/when the interest rate resets, explain the incentive component and explain that if the client re -defaults s/he will be terminated from the program. A loan will be considered to have re - defaulted when the borrower reaches a 90-day delinquency status under the MBA delinquency calculation. Documentation to validate this requirement can include, but is not limited to, a letter to the client scheduling the appointment or detailed counselor notes that indicate the date of the next appointment and the requirements of the client for the next appointment. In order to report a client as having received Level 4a counseling, the following documents must be in the client's file: verification of client loan source, trial or permanent loan modification verification, authorization, disclosure, privacy policy, budget verification, documentation of back end DTI, Action Plan that would include applicable referrals, and date of follow-up meeting. The Contractor must certify that all NFMC clients are owner -occupants of their homes at the time they receive counseling. By existing statute, NFMC clients must be owner -occupants of single-family (one- to four -unit) properties with mortgages in default or in danger of default. The Contractor is responsible for ensuring proper documentation exists in client files. The Contractor cannot receive payment for a client until after all the required actions for the level have occurred and have been documented accordingly. Level 4b Counseling: (Counseling) Level 4b ($150.00) can only be reported when a Level 4a client has completed one follow-up session and the following documents are in the file: {00028595-1} Page 30 of 39