Article Guide
The Fannie Mae Form 194, often referred to as the Hardship Affidavit, plays a crucial role in the realm of mortgage assistance and foreclosure prevention. This form allows borrowers facing financial difficulties to outline their situations clearly and concisely. When submitting this affidavit to their mortgage servicer, individuals provide key personal information, including their names, dates of birth, and property details. The form also prompts borrowers to identify specific hardship events that have impacted their ability to make mortgage payments. These events can range from reduced household income due to job loss or underemployment, to excessive monthly debt burdens, increasing living expenses, or insufficient cash reserves. By checking the relevant boxes, borrowers indicate the factors contributing to their financial struggles. Additionally, the affidavit includes a series of acknowledgments and agreements, where borrowers certify the truthfulness of their claims and consent to potential investigations into their financial status. This underscores the seriousness of the affidavit and the responsibility borrowers assume when seeking assistance. Ultimately, Form 194 serves not only as a vital tool for individual homeownership stability but also as a mechanism for servicers to evaluate eligibility for various foreclosure prevention alternatives.
Form Sample
Hardship Affidavit Form
Borrower Information
Borrower Name (first, middle, last):
Date of Birth:
Co‐Borrower Name (first, middle, last):
Date of Birth:
Property/Loan Information
Property Street Address:
Property City, ST, Zip:
Servicer:
Loan Number:
In order to be evaluated for a foreclosure prevention alternative (“Foreclosure Prevention Alternative”) offered by
____________________________ (“Servicer”), I am submitting this form to the Servicer and indicating by my
checkmarks the one or more events that contribute to my difficulty making payments on my mortgage loan.
I am having difficulty making my monthly payment because of financial difficulties created by:
(check all that apply)
My household income has been reduced. For example: unemployment, underemployment, reduced pay or hours, decline in business earnings, death, disability or divorce of a borrower or co‐borrower.
My monthly debt payments are excessive, and I am overextended with my creditors. Debt includes credit cards, home equity or other debt.
My expenses have increased. For example: monthly mortgage payment reset, high medical or health care costs, uninsured losses, increased utilities or property taxes.
My cash reserves, including all liquid assets, are insufficient to maintain my current mortgage payment and cover basic living expenses at the same time.
Other:
Fannie Mae Form 194 |
Page 1 of 2 |
April 2011 |
Hardship Affidavit Form
Borrower/Co‐Borrower Acknowledgement and Agreement
1.I certify that all of the information in this Hardship Affidavit is truthful and the event(s) identified above has/have contributed to my need for a Foreclosure Prevention Alternative relating to my mortgage loan.
2.I understand and acknowledge the Servicer may investigate the accuracy of my statements, may require me to provide supporting documentation, and that knowingly submitting false information may violate Federal law.
3.I understand the Servicer may pull a current credit report on all borrowers obligated on the note relating to my mortgage loan.
4.I understand that if I have intentionally defaulted on my existing mortgage, engaged in fraud or misrepresented any fact(s) in connection with this Hardship Affidavit, or if I do not provide all of the required documentation, the Servicer may cancel a Foreclosure Prevention Alternative and may pursue foreclosure on my home.
5.I certify that I have not received a condemnation notice on my property.
6.I certify that I am willing to provide all requested documents and to respond to all Servicer communication in a timely manner. I understand that time is of the essence.
7.I understand that the Servicer may use this information to evaluate my eligibility for a Foreclosure Prevention Alternative, but the Servicer is not obligated to offer me assistance based solely on the representations in this Hardship Affidavit.
8.I understand that the Servicer may collect and record personal information, including, but not limited to, my name, address, telephone number, social security number, credit score, income, payment history, and information about account balances and activity. I understand and consent to the disclosure of my personal information and the terms of any Foreclosure Prevention Alternative offered by the Servicer to any investor, insurer, guarantor or servicer that owns, insures, guarantees or services my first lien or subordinate lien (if applicable) mortgage loan(s).
_________________________ ___________ |
_________________________ ____________ |
||
Borrower Signature |
Date |
Co‐Borrower Signature |
Date |
Fannie Mae Form 194 |
Page 2 of 2 |
April 2011 |
Document Specifications
| Fact Name | Description |
|---|---|
| Purpose of the Form | The Fannie Mae 194 form is designed to collect information from borrowers facing financial hardships. It assists servicers in evaluating the borrowers' eligibility for foreclosure prevention alternatives. |
| Borrower Information Required | Borrowers must provide their names and dates of birth, along with information about any co-borrowers. This helps the servicer to accurately identify and evaluate each case. |
| Hardship Identification | Borrowers are required to check applicable reasons for their financial difficulties, such as reduced income or excessive debt. This section emphasizes the specific circumstances affecting the borrower’s ability to make payments. |
| Legal Acknowledgments | The form includes legal acknowledgments where borrowers certify the truthfulness of their information, understand potential consequences of false statements, and consent to credit checks. |
| States Governed by Specific Laws | In states like California, the form is governed by the California Civil Code, which outlines the obligations and protections for distressed homeowners in foreclosure situations. |
Steps to Filling Out Fannie Mae 194
Carefully completing the Fannie Mae 194 form is an important step toward addressing mortgage payment difficulties. This document assesses your financial situation and is required for consideration of various foreclosure prevention alternatives. Following the steps outlined will ensure that you provide all necessary information accurately.
- Gather necessary information: Collect all required personal and property information, including names, dates of birth, property address, servicer details, and loan number.
- Fill in Borrower Information: Enter the full name and date of birth for both the borrower and co-borrower in the designated sections.
- Complete Property/Loan Information: Input the property street address, city, state, and zip code. Add the name of the servicer and the loan number.
- Indicate financial difficulties: Check all applicable boxes that describe your financial hardships affecting your ability to make mortgage payments. Be thorough; this may include reduced household income, excessive debt payments, increased expenses, or insufficient cash reserves.
- Acknowledge and agree: Read through the statements regarding the accuracy of your information. Sign and date where indicated, acknowledging your understanding of the terms and conditions as outlined in the form.
- Review the completed form: Check all fields for completeness and accuracy. Ensure that all information is correctly filled out and that all necessary boxes have been checked.
- Submit the form: Send the completed Fannie Mae 194 form to your mortgage servicer. Keep a copy for your records.
More About Fannie Mae 194
What is the purpose of the Fannie Mae 194 form?
The Fannie Mae 194 form, also known as the Hardship Affidavit, is designed for borrowers experiencing difficulties in making their mortgage payments. It allows borrowers to disclose the specific hardships they face, which may qualify them for foreclosure prevention alternatives offered by their loan servicer. Submitting this form is a crucial step in seeking assistance and helps lenders understand the financial circumstances impacting the borrower.
Who should complete the Fannie Mae 194 form?
Both the primary borrower and co-borrower should complete the Fannie Mae 194 form if applicable. This ensures that all parties involved in the mortgage are on the same page regarding their financial hardships. Accurate and full disclosure is essential for the servicer to evaluate the borrower’s situation effectively.
What information is required on the Fannie Mae 194 form?
The form requires information about the borrower's and co-borrower's names and dates of birth, as well as details about the property such as the address, city, state, and loan number. Additionally, borrowers must indicate the specific financial hardships they are facing by checking relevant boxes, such as reduced income or increased expenses.
How does a borrower submit the Fannie Mae 194 form?
To submit the Fannie Mae 194 form, borrowers typically send it directly to their loan servicer. This can often be done via email, mail, or a secure online platform provided by the servicer. It’s essential to follow any specific submission guidelines provided by the servicer to ensure timely processing.
What happens after the Fannie Mae 194 form is submitted?
After submission, the servicer will review the information provided to assess the borrower's eligibility for various foreclosure prevention alternatives. The servicer may contact the borrower for additional documentation or clarification. It’s important for the borrower to respond promptly to any requests for information.
Can falsifying information on the Fannie Mae 194 form lead to legal issues?
Yes, submitting false information on the Fannie Mae 194 form can lead to serious legal ramifications. If a borrower is found to have intentionally misrepresented their circumstances, they could face foreclosure or other legal actions. Servicers have the right to investigate the accuracy of the information provided.
What types of hardships can be reported on the Fannie Mae 194 form?
Borrowers can report various hardships on the form, including reduced household income, excessive monthly debt, increased expenses such as medical bills, and insufficient cash reserves. There is also an option for borrowers to describe any other hardships that may not be specifically listed.
Is there a deadline for submitting the Fannie Mae 194 form?
While there may not be a formal deadline for submitting the Fannie Mae 194 form, borrowers are encouraged to act quickly. Timely submission is crucial because it can affect the options available to the borrower regarding foreclosure prevention. It’s beneficial to submit the form as soon as difficulties in making payments arise.
What should borrowers do if they have questions while completing the Fannie Mae 194 form?
If borrowers have questions while filling out the Fannie Mae 194 form, they should reach out to their loan servicer. Most servicers have customer service representatives who can provide guidance. Understanding the form is vital, and servicers are there to assist throughout the process.
Common mistakes
Incomplete Personal Information: Borrowers often neglect to fill in all sections, such as both the borrower and co-borrower's names and dates of birth. This omission can delay processing.
Failure to Specify Hardship: Many individuals either do not check any boxes or select too many options without providing specific details. Clear identification of the reason for financial difficulty is essential.
Inaccurate Information: Misrepresentation of facts, whether intentional or accidental, can lead to severe consequences. All statements must reflect the true circumstances of the borrower's situation.
Neglecting Documentation Requests: Borrowers sometimes forget to submit supporting documents as requested by the Servicer. This can thwart the evaluation process for Foreclosure Prevention Alternatives.
Ignoring Timeliness: Time-sensitive responses are critical. Many borrowers underestimate the importance of responding promptly to communications from the Servicer.
Signature Errors: Failing to sign the affidavit correctly, or overlooking the date of signature, can render the form invalid. Always ensure that all required signatures are present.
Assuming Eligibility Guarantees: Some borrowers mistakenly believe that completing the form guarantees a Foreclosure Prevention Alternative. It is crucial to understand that submission does not ensure assistance.
Documents used along the form
The Fannie Mae 194 form, also known as the Hardship Affidavit, is commonly used by borrowers facing financial difficulties to communicate their situation to their mortgage servicer. Along with this form, several other documents are typically required to assist in processing requests for foreclosure prevention alternatives. Below is a list of relevant forms and documents that borrowers may encounter during this process.
- Loan Modification Request Form: This document is submitted by borrowers who wish to modify the terms of their current loan to make payments more manageable. It outlines the new desired loan terms and details the borrower's financial situation.
- Financial Statement: Often required by lenders, this document provides an overview of the borrower’s income, expenses, assets, and liabilities. It helps lenders understand the borrower’s financial standing.
- Tax Returns: Past tax returns may be requested to verify income and assess the borrower’s financial situation. These documents provide a comprehensive view of the borrower’s earnings and financial obligations.
- Authorization to Release Information: This form allows the borrower to grant permission for their servicer or lender to obtain necessary financial information from third parties, such as banks or employers, to expedite the review process.
Each of these documents plays a crucial role in the evaluation of foreclosure prevention alternatives. By presenting accurate and complete information, borrowers can better communicate their needs and explore potential solutions with their servicer.
Similar forms
The Fannie Mae 194 form, known as the Hardship Affidavit, is designed to help borrowers communicate their financial difficulties to servicers. A similar document is the HUD-92070, often referred to as the Request for a Mortgage Assistance. Like the Fannie Mae 194, this form serves as a way for borrowers to disclose their financial hardships. It specifically facilitates the process of applying for assistance under various government programs. The HUD-92070 also emphasizes the importance of honesty and transparency, requiring borrowers to list specific financial difficulties that impact their ability to make mortgage payments. Both documents function as critical tools in the foreclosure prevention landscape, aiming to aid homeowners in distress by enabling them to explore available alternatives.
Another similar document is the FNMA 1040, which is typically used in conjunction with loan applications. This document is focused on disclosing relevant financial information, like income and debt obligations, to establish a borrower’s financial situation. While both the FNMA 1040 and the Fannie Mae 194 require borrowers to provide detailed accounts of their financial circumstances, the 1040 is driven more by the initial qualification process for new loans. Nevertheless, both documents underscore the necessity of accurate financial reporting to ensure that borrowers receive appropriate assistance based on their unique situations.
The Mortgage Assistance Application, often utilized by state and local agencies, bears similarities to the Fannie Mae 194 form as well. This application provides a comprehensive overview of a borrower's financial position. By outlining hardships and providing supporting documentation, borrowers can advocate for assistance from local and state programs. Just as the Fannie Mae 194 is intended to facilitate communication of financial distress, so does this document help in applying for localized support. Both documents serve as vital resources, aiming to prevent foreclosure and help families sustain homeownership.
Lastly, the Form 4506-T, which is used to request a tax transcript, also shares some connection to the Fannie Mae 194. Inability to provide adequate financial documentation can severely hinder the chances of securing assistance. While the Fannie Mae 194 aims to capture immediate hardships and necessary disclosures, the 4506-T serves as a verification tool. It allows servicers to cross-check income details against IRS records, ensuring the accuracy of the information submitted. Both forms highlight the critical role of documentation in the process of obtaining mortgage relief and draw attention to the necessity for honesty when communicating financial realities.
Dos and Don'ts
Things to Do When Filling Out the Fannie Mae 194 Form:
- Provide complete and accurate personal information, including names and birth dates of all borrowers.
- Clearly check all relevant boxes that apply to your financial difficulties.
- Certify that all information provided is truthful and acknowledge the possibility of verification by the Servicer.
- Respond promptly to any communication requests from the Servicer to ensure timely processing of your application.
Things to Avoid When Filling Out the Fannie Mae 194 Form:
- Do not leave any sections blank; incomplete forms can delay your request.
- Avoid providing false or misleading information, as this may violate federal laws.
- Do not assume that the Servicer will automatically offer assistance based on your submission.
- Refrain from ignoring requests for additional documentation or information from the Servicer.
Misconceptions
Understanding the Fannie Mae 194 form can be complicated. Here are six common misconceptions regarding this form:
- It is only for individuals facing foreclosure. Many believe this form is solely for those on the brink of foreclosure. In reality, it is intended for anyone experiencing financial hardship and seeking assistance with their mortgage payments.
- Submitting the form guarantees assistance. Some individuals think that once they submit the Fannie Mae 194 form, support will automatically follow. However, the servicer reviews each case, and completing the form does not ensure approval for a Foreclosure Prevention Alternative.
- You must be behind on payments to qualify. Another misconception is that only those who are overdue on their mortgage can complete this form. People experiencing temporary financial issues but current on their payments can also submit the form for assistance.
- All hardships must be documented. Many assume that every hardship listed requires extensive documentation to support it. While some evidence may be requested, the form itself allows individuals to express their circumstances generally, and not all events need to be substantiated initially.
- This form is confidential and won't affect credit scores. Individuals might believe that their information is fully protected and won't impact their credit ratings. It is crucial to understand that the servicer may review a credit report, and any actions taken afterward could affect credit standing.
- The servicer can’t share your information. There is a belief that the information provided on the Fannie Mae 194 form remains entirely private. In reality, consent is given for the servicer to share relevant personal information with investors or others involved in the mortgage process.
Educating yourself about these misconceptions can help in making informed decisions regarding mortgage assistance.
Key takeaways
Here are key takeaways for correctly filling out and using the Fannie Mae 194 form:
- Accurate Personal Information: Ensure all borrower and co-borrower details, including names and dates of birth, are filled out correctly.
- Complete Property Information: Provide the full property address and the loan number without omissions to avoid processing delays.
- Identify Hardship Reasons: Clearly check all applicable hardship reasons that contribute to your financial difficulties. Details matter.
- Certification of Truthfulness: Understand that all information provided on the form must be truthful. Inaccuracies can lead to severe consequences.
- Documentation Requirement: Be ready to supply any supporting documents requested by the servicer, as they may verify your claims.
- Understand Consequences: Know that misrepresentation or lack of required documentation may lead to foreclosure actions by the servicer.
- Timely Communication: Respond promptly to all communication from the servicer. Time is crucial in the foreclosure prevention process.