Number of Pages:10
Date Created:August 20, 2014
Date Uploaded to the Library:August 29, 2014
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Consumer Relief Eligibility: The Consumer Relief eligibility criteria shall reflect only the terms set forth below and the following principles and conditions: (1) Consumer Relief will not implemented through any policy that violates the Fair Housing Act the Equal Credit Opportunity Act; (2) Consumer Relief will not conditioned waiver release borrower, provided that waivers and releases shall permitted the case contested claim where the borrower would not otherwise have received favorable terms consideration; and (3) Eligible modifications may made under the Making Home Affordable Program (including the Home Affordable Modification Program and the Housing Finance Agency Hardest Hit Fund) and any proprietary other modification program. Nothing herein shall preclude the implementation pilot programs particular geographic areas that not violate the Fair Housing Act, the Equal Opportunity Credit Act, any other federal state civil rights law. Menu1 Menu Item2 Credit Towards Settlement Minimum/Cap Modification Forgiveness/Forbearance3,4 First Lien Principal Forgiveness5,6 $1.00 Forgiveness $1.00 Credit Menu Item 1.A Minimum $2.15 Billion Credit Start date crediting July 2014 (based first payment date for completed modifications and other actions under this Menu). Consumer Relief completed later than August 31, 2018. Credit will provided for modification payments are required unless the borrower makes the first three scheduled payments under the modification (including trial period payments). With respect earned forgiveness principal reduction modifications, Credit can immediate, provided the borrower makes the required payments (to include any trial payments) and the earned forgiveness period maximum years. borrower receives more than one form Consumer Relief, Credit shall provided for each form relief, provided that the forms relief must segregated for purposes determining Credit. The Credits for principal forgiveness modifications shall net any state federal funds paid Bank America, such netting calculated basis consistent with the National Mortgage Servicing Settlement Consent Judgment entered into Bank America and various government parties April 2012 and filed the U.S. District Court for the District Columbia (National Mortgage Settlement). Credit can earned for all forms relief the states, the District Columbia, and the U.S. territories. Credit will provided for any Consumer Relief completed any subservicer pursuant this Annex and for loans sold other servicers (including sales servicing rights) where modification completed the deadline set forth footnote for Bank America complete its Consumer Relief obligations, and provided that the agreement providing for such sale servicing allows for the tracking and reporting such subsequent Consumer Relief the satisfaction the Monitor. With respect loans held securitizations, Consumer Relief shall credited accordance with this Annex from July 2014 for all eligible modifications described this Menu, provided that all principal forgiveness modifications performed loans securitizations shall eligible only where Bank America has confirmed that: (1) the modification permitted under the operative documents for the securitization; (2) Bank America has permission from the relevant investors and/or trustees provide the principal reduction under the operative documents for the securitization another agreement with trustees/investors. addition, Credit will provided for Consumer Relief completed pursuant this Annex with respect loans serviced Bank America well loans owned Bank America with servicing rights owned others (SBO) unless otherwise limited under the Menu. For Menu Item 1.A, eligibility limited non-performing loans and loans imminent default (as defined Bank America its written policies with respect its implementation the Home Affordable Modification Program). With respect all other categories, Credit available for Consumer Relief provided all borrowers unless otherwise limited under the Menu. With respect Credits achieved under Menu Items 1.A, 1.B, and 1.C, modifications must for loans with unpaid principal balance prior capitalization below the local GSE conforming loan limit cap July 2014. With respect any principal forgiveness modification performed Bank America held-for-investment loans (including SBO) pursuant Menu Item 1.A, the non-adjustable post-modification interest rate the remaining first lien unpaid principal balance shall greater than and the post-modification LTV must equal less than 75% LTV. With respect any principal forgiveness modification performed loans serviced Bank America (excluding loans subservicing) pursuant Menu Item 1.A, the post-modification LTV must reduced equal less than 100% principal must reduced order achieve post-modification debt-to-income ratio 25%. used this Menu, LTV shall refer loan-to-value ratio. Subject any applicable investor contractual requirements, the property value used calculate the LTV under this Menu shall based upon property valuation meeting the standards acceptable under the Making Home Affordable programs received within three months the transaction. With respect any borrower who eligible for the Home Affordable Modification Program any its component programs (HAMP) and, with the written consent the borrower (it being understood that, long the borrower states she consents evaluated for principal modification consistent with that Menu Item 1.A this Annex lieu HAMP and such statement reflected Bank America its servicing system mortgage file, such written consent will obtained only from borrowers who enter into final modification agreement), Bank America may, lieu any evaluation such borrower under HAMP, evaluate such borrower for principal modification under Menu Item 1.A this Annex should Bank America obtain the appropriate HAMP Waiver from the Department the Treasury (Treasury). Such waiver will not contained within this Settlement Agreement. $1.00 Forgiveness FHA-insured Loans7 VA-guaranteed Loans8 $1.75 Credit 150% Enhanced Early Incentive Credit9 115% Early Incentive Credit10 115% Credit for incremental LTV reduction between 90% and 100% 120% Credit for incremental LTV reduction between 76% and 90% post-modification LTV equal less than 75%, 125% Credit for entire amount principal forgiven. 115% Credit for incremental relief Hardest Hit Areas (HHA) beyond the minimum deriving 50% Menu Item Credit from HHA11 $1.00 Forgiveness loans serviced Bank America but owned other Credit the $1.75 level may not earned for any indemnified loan for any loan listed the schedule attached hereto Exhibit Credit may given for Title HECM loans. With respect FHA-insured loans, Credit may only earned where the following conditions are met: the loan Bank America held for investment loan, the premodification LTV equal greater than 90%, Bank America not compensated for the actions taken (i.e., where loss mitigation claim filed with the Federal Housing Administration (FHA)), and where Bank America receives loss mitigation incentives from FHA connection with these actions. With respect VA-guaranteed loans, Credit can only earned where the following conditions are met: the loan Bank America held-for-investment loan; principal reductions are completed accordance with C.F.R. 36.4311; and Bank America executes indemnification agreement set forth Exhibit Subject the foregoing conditions, the Department Veterans Affairs (VA) grants prior approval, pursuant C.F.R. 36.4315, for modification the VA-guaranteed loans that meet these conditions. earn Credit under this Menu Item, modifications VA-guaranteed loans must reported accordance with C.F.R. 36.4317. Bank America only agrees execute indemnification agreement with respect loans for which modification has been completed. Bank America agrees provide notice within days any solicitation concerning VA-guaranteed loan. That notice will include the Loan Number, Servicer Loan Number, Borrower Name and Property Address for each loan. Enhanced Early Incentive Credit applies all Consumer Relief activity under Menu Item 1.A completed May 31, 2015 (based upon the first payment date, excluding trial payments, for modifications requiring payment), provided that Enhanced Early Incentive Credit will provided for modification payments are required unless the borrower makes the first three scheduled payments under the modification (including trial period payments). Enhanced Early Incentive Credit and other Credits are cumulative (e.g., $1.00 principal forgiveness part modification resulting LTV 75% completed prior May 31, 2015 would receive $1.875 Credit), except that Early Incentive Credit applies consumer relief activity receiving Enhanced Early Incentive Credit. Early Incentive Credit applies all Consumer Relief activity offered completed August 31, 2015. Early Incentive Credit and other Credits are cumulative (e.g., $1.00 principal forgiveness part modification resulting LTV 75% completed prior August 31, 2015 Participating State (as described below under State-Specific Consumer Relief) where Bank America has already met its state-specific minimum amount beyond that state-specific minimum would receive $1.653125 Credit). Hardest Hit Areas HHA are defined the hardest hit census tracts the Distressed Census Tracts only.csv file provided the Department Justice Bank America August 11, 2014. investors $0.50 Credit $1.00 Investor incentive payments (when paid) consistent with those paid HAMP (if applicable) $1.00 Credit12 Principal Forgiveness $1.00 Forgiveness $1.00 Credit Forbearance 115% Early Incentive Credit 115% Credit for incremental LTV reduction below 100% 115% Credit for incremental relief HHA beyond the minimum deriving 50% Menu Item Credit from HHA $1.00 Forgiveness loans serviced Bank America but owned other investors $0.50 Credit $1.00 Investor incentive payments (when paid) consistent with those paid HAMP for principal reduction first liens (if applicable) $1.00 Credit Credit limited principal reduction that reduces LTV equal less than 100% LTV First Lien Forbearance $Forgiveness Pre Mod Rate (Payment Forgiveness) Forborne UPB Avg Life13 115% Early Incentive Credit 115% Credit for incremental relief HHA beyond the minimum deriving 50% Menu Item Credit from HHA $1.00 Forgiveness loans serviced Bank America but owned other investors $0.50 Credit $1.00 Investor incentive payments (when paid) consistent with those paid HAMP (if applicable) $1.00 Credit Second Lien Performing (90 days less past due Menu Items 1.D 1.E Cap Extinguishments14,15 the related Second Lien)16: $2.5 Billion Credit With respect investor incentive payments under Menu Item Bank America can apply for servicer and investor incentive payments under HAMP, but Credit cannot earned for these incentives. Based average life years. Bank America may not earn Credit under Menu Items 1.D and 1.E for extinguishment second lien, junior lien, unsecured mortgage debt where Bank America owns services the first lien and Bank America initiates Junior Liens (Liens less than Second Lien position) Outstanding Unsecured Mortgage Debt Principal Forgiveness/ Extinguishment Credit Towards Settlement $1.00 Forgiveness $1.00 Credit 115% Early Incentive Credit 115% Credit for incremental relief HHA beyond the minimum deriving 50% Menu Item Credit from HHA $1.00 Forgiveness loans serviced Bank America but owned other investors $0.50 Credit $1.00 Investor incentive payments (when paid) consistent with those paid HAMP (if applicable) $1.00 Credit Seriously Delinquent Non-Performing days past due the related Second Lien): $1.00 Forgiveness $0.40 Credit 115% Early Incentive Credit 115% Credit for incremental relief HHA beyond the minimum deriving 50% Menu Item Credit from HHA $1.00 Investor incentive payments (when paid) consistent with those paid HAMP (if applicable) $1.00 Credit $1.00 Forgiveness $0.40 Credit 115% Early Incentive Credit 115% Credit for incremental relief HHA beyond the minimum deriving 50% Menu Item Credit from HHA Minimum/Cap Menu Items 1.D 1.E 3.A Cap $3.0 Billion Credit prosecutes foreclosure with respect the first lien within months the extinguishment the second lien. Bank America may not earn Credit under Menu Items 1.D and 1.E for debt that has become unenforceable operation state law (e.g., California Code Civil Procedure sections 580b and 580d). the extent that any form relief under Menu Items 1.D 1.E offered opt-out basis, the opt-out period must least days length. Eligibility under Menu Items 1.D and 1.E limited borrowers with second lien UPBs below $208,500 nationwide with the exception Alaska, Guam, Hawaii and Virgin Islands, where eligibility limited borrowers with second lien UPBs below $312,750. Credit can only earned under Menu Items 1.D and 1.E for extinguishment second liens, junior liens, unsecured mortgage debt. used this Menu, delinquency will determined using either the MBA OTS definition delinquency depending upon the method reflected Bank Americas applicable system record. MBA refers the Mortgage Bankers Association definition delinquency. OTS refers the Office Thrift Supervision definition delinquency. With respect Menu Item 50% the Credit must from HHA. Low Moderate Income and Other Lending Low Moderate Income and Other Lending $10,000 Credit for purchase money loans credit worthy borrowers: (1) HHA; (2) who lost primary residence foreclosure short sale; (3) who are first time LMI homebuyers17 115% Early Incentive Credit Community Reinvestment and Neighborhood Stabilization Forgiveness principal associated with property where foreclosure not pursued and liens are released18 $1.00 Forgiveness $1.00 Credit Menu Item 3.A Cap $2.5 Billion Credit Menu Items 1.D 1.E 3.A Cap Billion Credit Cash costs paid for demolition and property remediation abandoned and uninhabitable $1.00 Payment $1.00 Credit $1.00 Reasonable Remediation Costs residential properties part comprehensive local strategy stabilize neighborhoods $1.00 Credit Mortgages REO properties donated accepting municipalities, land banks, non-profits servicemembers with $1.00 Property Value19 $1.00 Credit $1.00 Reasonable Rehabilitation Costs $1.00 Credit disabilities relatives deceased servicemembers Any LMI loan must made borrowers with income below 100% the area median income (AMI) and originated after July 2014. AMI shall calculated accordance with the parameters used the U.S. Department Housing and Urban Development (HUD). Credit can only earned for extinguishment occupied properties. the extent that any relief provided under Menu Item 3.A offered opt-out basis, the opt-out period must least days length. Subject any applicable investor contractual requirements, any property value used calculate Credits for this provision shall have property valuation meeting the standards acceptable under the Making Home Affordable programs received within three months the transaction. Donations non-profits $1.00 Payment $2.00 Credit facilitate reduction, rehabilitation, maintenance abandoned and uninhabitable residential properties donated under Menu Item Donations capitalize certified $1.00 Payment $2.00 Credit Menu Item 3.E Minimum Community Development $50 Million Payment Financial Institutions (CDFIs)20, land banks subject state local regulation, community development funds administered non-profits local governments Donations state-based $1.00 Payment $2.00 Credit Menu Item 3.F Minimum Interest Lawyers Trust $30 Million Payment Account (IOLTA) organizations (or other statewide bar-association affiliated intermediaries) that provide funds legal aid organizations, used for foreclosure prevention legal assistance and community redevelopment legal assistance21 Donations HUD-approved $1.00 Payment $2.00 Credit Menu Item 3.G Minimum housing counseling agencies $20 Million Payment provide foreclosure prevention assistance and other housing counseling activities22 115% Early Incentive Credit for Menu Items 3.A-G The list Community Development Institutions certified the CDFI Fund the U.S. Treasury available the Treasury Department website http://www.cdfifund.gov/what_we_do/programs_id.asp?programID=9. For purposes Menu Item 3.F, the extent practicable, state-based IOLTA organizations includes those the states, the District Columbia, and all U.S. territories possessions. minimum amount $200,000 will provided the IOLTA other eligible organization each jurisdiction, with all remaining donation funds under this Menu Item 3.F distributed pro rata among all jurisdictions based poverty population data, the manner employed for funding distribution the Legal Services Corporation based data collected the U.S. Census Bureau. The list HUD-approved housing counseling agencies available the HUD website http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm. Affordable Rental Housing For Critical Need Family Housing23 developments: $1.00 Loss24 $3.75 Credit For other developments: $1.00 Loss $3.25 Credit 115% Early Incentive Credit Credits for Critical Need Family Housing developments and for other developments will given for developments that are equivalent affordable housing developed through LIHTC. For example, developments eligible for Credits (i) must have least 20% the residential units affordable 50% AMI least 40% the units affordable 60% AMI, (ii) must have Land Use Restriction Agreement for least years, and (iii) must agree accept Housing Choice vouchers. Other features also must equivalent affordable housing developed through LIHTC. Menu Item Minimum $100 Million Loss With respect Menu Item least 50% units generating Credit must Critical Family Need Housing developments. Each year, least 40% all units generating credit Critical Need Family Housing developments must have more bedrooms. Each year, least 10% all units generating Credit Critical Need Family Housing developments must have more bedrooms. earn Credit, developments must meet the same affirmative marketing standards are set forth C.F.R. 200.620. Total Credit Minimum (Menu Items 1+2+3+4) Billion Credit Critical Need Family Housing defined affordable low-income rental housing developments selected Bank America that (i) are located within Small Area DDAs State-Defined High Opportunity/Low Poverty Areas, and (ii) none the units have age restrictions for any the occupants. For these purposes, Small Area DDAs are Small Area Difficult Development Areas defined HUD set forth Fed. Reg. 69,113 (Nov. 18, 2013), and State-Defined High Opportunity/Low Poverty Areas refers high opportunity low poverty areas defined State Qualified Allocation Plans (for those states that use such designations). The list Small Area DDAs for 2014 for purposes this agreement shall the list Hypothetical Small Area DDAs for 2014 that was transmitted Bank America the Department Justice August 2014. The list Small Area DDAs for subsequent years will available HUDs website. Loss measured the difference between the fair value and par value, reflected the books and records Bank America, the origination date the subordinated loan made facilitate the construction, rehabilitation, preservation affordable low-income rental housing. Credit will only given $100,000 per affordable housing unit. Origination date defined the date the commitment lend issued. For crediting purposes, origination date the determinative date for crediting described above. Bank Americas Loss substantially reversed due circumstances such cancellation the project during the term this Annex Bank Americas Credit shall calculated the actual Loss incurred. The Credit shall reduced $3.25 for $1.00 Loss the location the project moved outside Small Area DDA State-Defined High Opportunity/Poverty Area. State-Specific Consumer Relief Minimum Credit, which can derived from any Menu Item (1-4 above), must earned the following Participating States and denominations (which shall known the Participating State Minimum Amounts): $500 million for California25, $500 million for New York26, $100 million for Illinois, and $150 million for Delaware, Maryland, and Kentucky combined. 115% Additional Credit (which shall known Participating State Additional Credit) for Credit Amounts Menu Items and 3.A-C excess the Participating State Minimum Amounts for each Participating State. Required Outreach Bank America agrees hold eight events each year until Bank America has achieved the Total Credit Minimum. These events will carried out rotational basis provide geographically dispersed borrower access, with priority given the Hardest Hit Areas and Participating States. preparation for each event, Bank America will conduct targeted borrower outreach through personalized invitational letters, emails and/or outbound phone calls with eligible customers. The multi-lingual event team will conduct this outreach English and Spanish, and, best efforts basis, other languages encourage customers make appointments advance. part this preparation, Bank America will notify the State Attorneys General, State Housing Finance Authorities, and local not-for-profits the schedule events build further awareness and encourage increased participation. Specialists both loss mitigation and refinancing programs will on-site each event provide setting where customer can guided across the full range consumer relief alternatives. addition, specialists new mortgage origination will available assist any borrowers Hardest Hit Areas, borrowers who lost homes foreclosure short sales, and first time low-to-moderate income homebuyers who may interested purchasing new home. Multilingual translation and interpretation services for Spanish and, best efforts basis, other languages will offered and available customers requesting such support. addition Bank America-sponsored events, Bank America will continue provide qualified staff agents participate and support additional events annually across the nation sponsored national intermediaries and local not-for-profits throughout the term the agreement, invited. Finally, within days execution this Settlement Agreement, Bank America will prepare short, plain-language document (translated into Spanish, Chinese, Tagalog, Vietnamese, and Korean), available online, that can distributed third parties explain customers the forms relief available under this agreement. Bank America shall translate this document into other languages appropriate best efforts basis. The Monitor will evaluate and certify Bank Americas compliance with the Required Outreach set forth above using methodology similar the methodology employed determine Bank Americas compliance with the remainder this Annex Within California, the following minimums also apply (which shall referred the California-Specific Minimum Amount): Menu Items 1.A 1.B Credit Minimum $380 Million. Participating State Additional Credit can only earned California once the California-Specific Minimum Amount has been achieved. Within New York, the following minimums also apply (which shall referred the New York-Specific Minimum Amounts): Menu Item 1.A Credit Minimum $60 Million; Menu Item 3.C Credit Minimum $20 Million (provided that creditable for purposes this Menu 3.C Credit Minimum, any donation must accompanied donation under Menu Item 3.D); Menu Item 3.E Payment Minimum $8.1 Million; Menu Item 3.F Payment Minimum payment determined the methodology set forth footnote this Annex Menu Item 3.G Payment Minimum $8.1 Million; and Menu Item Loss Minimum $35.7 Million. Participating State Additional Credit can only earned New York once the New York-Specific Minimum Amount has been achieved. Additional Parameters Bank America shall not responsible for any tax consequences borrowers the Consumer Relief described the Menu beyond that described Annex but Bank America required clearly disclose borrowers the tax consequences any relief offered provided, and recommend that borrowers seek appropriate counsel needed. Credit Minimums, Reporting Requirements, and Liquidated Damages Bank America shall endeavor satisfy the Consumer Relief obligations set forth this Annex August 31, 2017, but shall have until August 31, 2018 complete all Consumer Relief obligations set forth this Annex independent Monitor acceptable the parties and paid for Bank America shall appointed publicly: report progress towards completion Consumer Relief, including reporting overall progress quarterly basis commencing later than 180 days after the date this Agreement; report Credits earned promptly practicable following the date the Monitor has confirmed the methodology for validation Credits under this Menu (including description the distribution Credits the census block level); ultimately determine and certify Bank Americas compliance with the terms this Annex and report the Tax Relief Payments under Annex the Monitor determines that shortfall that obligation remains August 31, 2018, Bank America shall make compensatory payment cash amount equal the shortfall (the Liquidated Damages), 25% which shall Neighborworks America, provide housing counselling, neighborhood stabilization, foreclosure prevention similar programs, and 75% which shall state-based Interest Lawyers Trust Account (IOLTA) organizations (or other statewide bar-association affiliated intermediaries) that provide funds legal aid organizations, used for foreclosure prevention legal assistance and community redevelopment legal assistance.27 The payment Liquidated Damages shall the sole remedy for any failure complete the Consumer Relief. The calculations regarding the Credit Minimums shall performed the Monitor and the Monitor shall determine the end the period whether there are Liquidated Damages and, so, the amount due. the event that Bank America unable satisfy the Credit Minimums set forth this Menu despite using its best efforts (as confirmed the Monitor) solicit every eligible borrower, barring any legal limitations its ability contact given borrower, for the applicable consumer relief program, Bank America may apply any Credits earned excess any the Credit Minimums any Credit earned any Menu Item which neither Credit Minimum nor Credit Cap applies offset any deficiency respect any the other Menu Items which Credit Minimum applies. The Monitor shall provide Bank America with flexibility the evidencing requirements for loans not serviced Bank America where the standard evidence unavailable and Bank America able provide alternative evidence that enables the Monitor satisfactorily carry out his duties under this Annex For example, the Monitor may (but not required to) determine that balance forgiveness may evidenced transaction screenshots, before and after statements and/or 1099C statements. For Menu Items 3.A, 3.B, and 3.C, Bank America required report data the Monitor the census block level. For Menu Items 1.A, 1.B, 1.D, 1.E, and 3.A, Bank America required provide the Monitor with copy the Internal Revenue Service (IRS) Form 1099C issued each individual for each item relief provided. Credit will not given for any item relief provided pursuant this Menu where the Monitor determines that Bank America has failed satisfactorily report data (including census block level data) for that relief required this Annex the event that the Monitor determines that Bank America has failed perform the outreach required this Annex Bank America shall make Liquidated Damages payment the amount $100 million. For purposes the Liquidated Damages, the extent practicable, 75% the Liquidated Damages will distributed pro rata among all jurisdictions based poverty population data, the manner employed for funding distribution the Legal Services Corporation based data collected the U.S. Census Bureau.