Applications for exemption and miscellaneous determination requests are assigned to Exempt Organizations specialists for review. If additional information is necessary to make a determination, a specialist will contact the organization for the information. Here’s a list of questions that might be asked on this topic.
1. Explain the processes you follow with respect to mortgage foreclosure counseling and loss mitigation, including the following information:
a. If you limit your services to any particular class of individuals, describe the qualifications you use to determine whether that individual falls within that group; and
b. The financial information you solicit from your clients
2. Provide copies of any application form for assistance, as well as any agreements or contracts given to individuals seeking services from you.
3. Regarding any workshops, classes, seminars on mortgage foreclosure intervention, financial counseling, mortgage loss mitigation, consumer budgeting assistance, or other educational programs, please provide the following information:
a. State whether your educational programs are open to the general public;
b. Provide a list of sessions for the last year at which there were attendees;
c. Provide a representative sample of the syllabi and written materials used for these sessions
d. State whether these sessions were offered with other entities. If so, specify each entity, the terms of the relationship, and any limitations on attendees; and
e. State the percentage of your time and money that is spent on these educational sessions.
4. State whether you now offer, or plan to offer, any additional services or financial products such as loans, credit counseling (other than mortgage counseling), credit repair, negotiating with creditors, bankruptcy counseling, brokerage services, short sales, deeds in lieu of foreclosure, or down payment assistance. If so, describe those services in detail.
5. If you provide credit counseling or other financial counseling services, submit the following information:
a. List the information you collect from clients before or during the initial counseling session.
b. Describe your presentation to clients during the initial counseling session, including topics covered and options discussed;
c. For each counseling topic covered, provide a breakdown of the number of individuals you counseled;
d. List the criteria your employees use to determine which services are appropriate for a client; and
e. Explain whether you also provide a written budget analysis to all clients.
6. If you require counseling participants to engage in ongoing educational programs during the course of their counseling, describe that activity in detail.
7. State the number of times you meet with a client before recommending a particular approach and the average amount of time your counselors spend in speaking with each client during an initial inquiry and during subsequent follow-up inquiries.
8. State whether you receive client referrals through the purchase of notice of default lists, mortgage lists or lead lists, and if so, provide copies of any written agreements or contracts. If there is no written agreement or contract, describe the terms and conditions of each arrangement.
9. Regarding referrals:
a. Describe the types of referrals/leads(e.g., clients, services, goods, etc.) which you provide to others or obtain;
b. Identify all entities (e.g., banks, credit-offering entities, local service agencies, government agencies, or other organizations) or individuals (e.g., mortgage brokers, loan officers, realtors, or attorneys) from whom you receive referrals, or to whom you refer clients
c. State how those entities or individuals were selected;
d. Indicate whether you pay or receive any fees for obtaining or providing leads/referrals;
e. Describe each referral arrangement; and
f. Submit all written documentation relating to any agreements or contracts.
10. State whether you have a business relationship with any mortgage brokers, loan officers, realtors or attorneys. If so, describe in detail your relationship(s) and provide a copy of all agreements or contracts.
11. Have you applied to (or plan to apply to) the Department of Housing and Urban Development (HUD) for certification as an approved housing counseling agency? If so, provide a copy of your application (or draft application if you are in the planning stage) to HUD (e.g., Form HUD-9900A, Form HUD-9900B, Form HUD-9900C).
12. Have you applied for (or will apply for) funding from the National Foreclosure Mitigation Counseling Program as administered by NeighborWorks, or any other similar programs? If you applied, submit a copy of your application. If you have not applied but plan to apply, submit a copy of your draft application. Additionally, describe the courses, services, and counseling activities that you will conduct to qualify for and retain Department of Housing and Urban Development certification.
13. If you made loans to clients, provide a copy of the loan agreement. If there is no written agreement, please specify the terms of the loan (e.g., the current balance, repayment period, interest rate, etc.).
14. If you negotiate formal payment plans, provide the details and conditions of the plans.
15. Submit an explanation of whether the payment plan involves the write down of the existing loan by the mortgage holder, a change in the interest rate of the mortgage or the creation of a new loan. If yes to any, describe the transaction in detail.
16. Provide copies of all materials used in the work-out process.
17. Provide the following information regarding your clients receiving mortgage mitigation assistance:
a. The total number of clients you service each month;
b. The number of clients you assisted in bringing the mortgage current during the last year;
c. The number of clients you assisted in refinancing or otherwise modifying their mortgage during the last year;
d. The number of clients you assisted in receiving a second mortgage during the last year;
e. The number of clients you assisted in initiating a forbearance agreement or repayment plan during the last year;
f. The number of clients you assisted in executing a deed-in-lieu during the last year;
g. The number of clients you assisted in finding an alternative housing solution during the last year;
h. The number of clients you referred to another social service or emergency assistance agency during the last year; and
i. Describe the methods you use to follow up with clients (e.g., status updates to ensure all agreements are in good standing), the mortgage holder, or the loan servicing agent.
18. Describe the methods you use, if any, to track the success rate of your mortgage loan renegotiation efforts in comparison to your failures.
19. Provide the following information regarding your fees:
a. Explain whether you charge fees for your programs. If yes, provide a copy of your fee schedule;
b. Describe in detail the factors you use in establishing your fee schedule, including how you ensure your fees are reasonable;
c. Explain whether the fee is refundable under any circumstance. If so, describe in detail when the fee is refundable;
d. Explain whether you provide services to individuals who are unable to pay your fee. If so, provide both the number of clients and the percentage of clients who received your
services without being charged a fee because of their inability to pay. Additionally, list the
factors you rely upon to make the determination that a client is unable to pay;
e. If you have a policy regarding fee waivers, submit a copy of that policy; and
f. State whether any portion of fees are paid for or reimbursed by Department of Housing and Urban Development.
20. State whether any of your services will be funded (in whole or in part) by fee-for-service agreements with lenders, creditors, or debtors. If yes, explain these agreements in detail and attach copies of the agreements.
21. Explain whether you charge a separate fee to improve a person’s credit record, credit history, or credit rating. If so, describe that activity in detail.
22. Explain whether you solicit contributions from consumers during the initial counseling process or at any other time during which they are receiving services from you.
23. For each grant you received:
a. State the source, the amount, and the purpose of the grant;
b. Identify any grants that come from lenders who participate in your programs; and
c. Attach copies of all grant requests and applications.
24. Submit the following information relating to your past and present directors:
a. The total number of directors currently on your board;
b. The number of directors with voting rights who are employed by you in a capacity other than director;
c. The number of directors with voting rights who receive a financial benefit, either directly or indirectly through your activities (excluding reasonable directors’ fees). For each director identified, provide a description of the type of benefit they may receive;
d. Whether any of your directors are persons having special knowledge or expertise in credit or financial education, are public officials who are acting in their capacities as such, or are community leaders; and
e. Whether any directors are acting in their official capacity as a public official, such as from the federal, state, or city government.
25. List each past or present board member, officer, or key employee who has served on the board of any organization with whom you do business, has an ownership interest in any for-profit entity that does business with you, or who would otherwise be treated as a disqualified person by virtue of some other relationship with either of the above. For each, explain the nature of the relationship to your organization.
26. Provide the following information about your employees:
a. List all categories of employees (i.e., counselors, administrative, staff, etc.); and
b. Indicate the number of employees in each category.
27. Describe your employee compensation system, including how you determine base compensation for all employees, all bonus or incentive arrangements you offer, and the circumstances under which employees can qualify for bonuses or incentives. If this system has changed since you began operations, please explain.
28. Describe the training or experience your counselors have and what training they receive before and during their employ with you.
29. Submit copies of the following advertising materials:
a. Flyers and letters distributed (or to be distributed) through mass media (including the yellow pages, newspapers, magazines, local circulars, etc.), social media, and Internet advertising; and
b. Current or prospective radio, television, and phone call scripts.
30. Provide a print-out of each of your website’s pages or proposed website’s pages, including any pages with restricted access.
31. Submit a list of all Internet sites on which you advertise or plan to advertise, or that you link to or that link to you for advertising purposes.
32. Excluding any ownership interests in Internal Revenue Code Section 501(c)(3) organizations, explain whether you have a 35 percent or more interest in any corporation, partnership, or trust or estate that is in the trade or business of lending money, repairing credit, or providing debt management plan services, payment processing, or similar services. If so, please explain. Provide the name of the person, the name of the for-profit entity, and any relationship that may still exist with the for-profit entity.
33. State whether you ever have been the subject of an investigation, complaint, or lawsuit by any of the following entities: State Attorney General; State Office of Consumer Protection; Better Business Bureau; Federal Trade Commission; Department of Housing and Urban Development; or any other local, state, or federal agency. If so, describe the issue, state where and when it was initiated, and indicate the result.
See the complete list of Applying for Exemption/Miscellaneous Determination Sample Questions by topic.