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FNMA SVC-2013-18 Streamlined Modification, HAMP, and 2MP Updates

On September 18, Fannie Mae released Servicing Guide Announcement SVC-2013-18, subtitled Streamlined Modification, HAMP, and 2MP Updates.

Servicing Guide Announcement SVC-2013-18

Streamlined Modification, HAMP, and 2MP Updates

This Announcement describes policy updates regarding:

  • Expiration date of Streamlined Modification
  • Expiration date of HAMP and 2MP
  • HAMP eligibility determination based on Net Present Value (NPV) evaluation
  • Annual “pay for success” HAMP and 2MP servicer incentive
  • Repurchase requests

Expiration Date of Streamlined Modification

Servicing Guide, Part VII, Section 602.02: Modifying Conventional Mortgage Loans, and Servicing Guide Announcement SVC-2013-05: Streamlined Modifications, Conventional Mortgage Loan Modifications, and Outbound Communications

Fannie Mae is extending the expiration date for the Streamlined Modification program. All mortgage loans eligible for a Streamlined Modification must have a Trial Period Plan with an effective date that is on or before December 1, 2015.

Expiration Date of HAMP and 2MP

Servicing Guide, Part VII, Section 609.01: HAMP Eligibility; Section 612.01: 2MP Eligibility and Announcement SVC-2012-18: Updates to Delinquency Management and Default Prevention Requirements

Fannie Mae is extending the expiration date for both the HAMP and the Second-Lien Modification Program (2MP) programs. All mortgage loans eligible for HAMP must have a Trial Period Plan with an effective date on or before March 1, 2016. Additionally, a HAMP or 2MP mortgage loan must have a permanent modification effective date that is on or before September 1, 2016.

Fannie Mae is updating its requirements such that servicers may reasonably conclude that when a first-lien mortgage loan appears on the Lender Processing Services (LPS) match file as permanently modified, it satisfies the deadline eligibility criteria described herein.

Fannie Mae is reminding servicers when a borrower’s first-lien mortgage loan is modified under HAMP, the servicer of a Fannie Mae second-lien mortgage loan must offer the borrower a 2MP Trial Period Plan.

HAMP Eligibility Determination Based on Net Present Value (NPV) Evaluation

Servicing Guide, Part VII, Section 609.01: HAMP Eligibility; Section 609.02.04: NPV Test; and Section
609.02.06: Standard Mortgage Loan Modification Waterfall

Fannie Mae is modifying its HAMP eligibility requirements with respect to the NPV model results used to
evaluate mortgage loans for HAMP. Mortgage loans evaluated for HAMP and processed through the NPV
model on or after January 1, 2014, are eligible only if the value of the “modification” scenario equals or
exceeds the value of the “no-modification” scenario. A mortgage loan with a negative NPV result will no longer
be eligible for a HAMP mortgage loan modification, if the value of the “modification” scenario is below the value
of the “no-modification” scenario.

When the value of the “modification” scenario is below the value of the “no-modification” scenario, the servicer
must not perform the mortgage loan modification and must explore other foreclosure prevention alternatives
pursuant to Fannie Mae guidelines prior to initiating or resuming foreclosure proceedings.

Annual “Pay for Success” HAMP and 2MP Servicer Incentive

Servicing Guide, Part VII, Section 609.08.04: Incentive Compensation and Section 612.07.01: Servicer
Incentive Compensation

Fannie Mae is eliminating the annual “pay for success” servicer incentive fee for HAMP and 2MP mortgage
loan modifications that have a modification effective date that is on or after April 1, 2014.

Repurchase Requests

Servicing Guide, Part I, Section 207: Repurchase or Mortgage Substitution Requirements; Part I,
Section 207.01: Mortgage Loan Repurchases Requested by Fannie Mae; Part VII, Section 609.07.02:
Reporting to Treasury, and Part VII, Section 612.04.04: Reporting to Treasury

With this Announcement, Fannie Mae is updating the Servicing Guide reporting requirements for repurchased
mortgage loans subject to a HAMP permanent mortgage loan modification or a HAMP Trial Period Plan. The
responsible party (as defined in Announcement SVC-2013-12: Servicer and Responsible Party Obligations for
Bifurcated Mortgage Loans) is now required to cancel the related record accessible through the HAMP
Reporting Tool on HMPadmin.com, in compliance with the Making Home Affordable Program Administrator’s
instructions. The responsible party that is subject to a Servicer Participation Agreement (SPA) should follow
the Program Administrator’s instructions in reporting on repurchased mortgage loans cancelled pursuant to this
paragraph. The responsible party is also reminded that in connection with the cancellation of the record of the
HAMP permanent mortgage loan modification, Fannie Mae has the right to recover all previously paid
incentives

Fannie Mae is also reminding the responsible party that following the repurchase of any mortgage loan, losses
are the responsibility and legal obligation of the responsible party and not Fannie Mae. Furthermore, in
connection with any repurchase, the responsible party must comply with all legal obligations in connection with
the mortgage loan, as modified, including any legal obligation to pay a borrower any earned “pay for
performance” incentives.

*****

Servicers should contact their Servicing Consultant, Portfolio Manager, Investor Reporting Business Analyst, or Fannie Mae’s National Servicing Organization’s Servicing Solutions Center at 1-888-FANNIE5 (1-888-326-6435) with any questions regarding this Announcement.

Gwen Muse-Evans
Senior Vice President
Chief Risk Officer for Credit Portfolio Management

To view the online announcement, please click here.

About Safeguard 
Safeguard Properties is the largest mortgage field services company in the U.S. Founded in 1990 by Robert Klein and based in Valley View, Ohio, the company inspects and maintains defaulted and foreclosed properties for mortgage servicers, lenders,  and other financial institutions. Safeguard employs approximately 1,700 people, in addition to a network of thousands of contractors nationally. Website: www.safeguardproperties.com.

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CEO

Alan Jaffa

Alan Jaffa is the Chief Executive Officer for Safeguard Properties, steering the company as the mortgage field services industry leader. He also serves on the board of advisors for SCG Partners, a middle-market private equity fund focused on diversifying and expanding Safeguard Properties’ business model into complimentary markets.

Alan joined Safeguard in 1995, learning the business from the ground up. He was promoted to Chief Operating Officer in 2002, and was named CEO in May 2010. His hands-on experience has given him unique insights as a leader to innovate, improve and strengthen Safeguard’s processes to assure that the company adheres to the highest standards of quality and customer service.

Under Alan’s leadership, Safeguard has grown significantly with strategies that have included new and expanded services, technology investments that deliver higher quality and greater efficiency to clients, and strategic acquisitions. He takes a team approach to process improvement, involving staff at all levels of the organization to address issues, brainstorm solutions, and identify new and better ways to serve clients.

In 2008, Alan was recognized by Crain’s Cleveland Business in its annual “40-Under-40” profile of young leaders. He also was named a NEO Ernst & Young Entrepreneur Of The Year® Award finalist in 2013.

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Esq., General Counsel and EVP

Linda Erkkila

Linda Erkkila is the General Counsel and Executive Vice President for Safeguard Properties, with oversight of legal, human resources, training, and compliance. Linda’s broad scope of oversight covers regulatory issues that impact Safeguard’s operations, risk mitigation, strategic planning, human resources and training initiatives, compliance, insurance, litigation and claims management, and counsel related to mergers, acquisition and joint ventures.

Linda assures that Safeguard’s strategic initiatives align with its resources, leverage opportunities across the company, and contemplate compliance mandates. She has practiced law for 25 years and her experience, both as outside and in-house counsel, covers a wide range of corporate matters, including regulatory disclosure, corporate governance compliance, risk assessment, compensation and benefits, litigation management, and mergers and acquisitions.

Linda earned her JD at Cleveland-Marshall College of Law. She holds a degree in economics from Miami University and an MBA. Linda was previously named as both a “Woman of Influence” by HousingWire and as a “Leading Lady” by MReport.

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COO

Michael Greenbaum

Michael Greenbaum is the Chief Operating Officer of Safeguard Properties, where he has played a pivotal role since joining the company in July 2010. Initially brought on as Vice President of REO, Mike’s exceptional leadership and strategic vision quickly propelled him to Vice President of Operations in 2013, and ultimately to COO in 2015. Over his 14-year tenure at Safeguard, Mike has been instrumental in driving change and fostering innovation within the Property Preservation sector, consistently delivering excellence and becoming a trusted partner to clients and investors.

A distinguished graduate of the United States Military Academy at West Point, Mike earned a degree in Quantitative Economics. Following his graduation, he served in the U.S. Army’s Ordnance Branch, where he specialized in supply chain management. Before his tenure at Safeguard, Mike honed his expertise by managing global supply chains for 13 years, leveraging his military and civilian experience to lead with precision and efficacy.

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CFO

Joe Iafigliola

Joe Iafigliola is the Chief Financial Officer for Safeguard Properties. Joe is responsible for the Control, Quality Assurance, Business Development, Marketing, Accounting, and Information Security departments. At the core of his responsibilities is the drive to ensure that Safeguard’s focus remains rooted in Customer Service = Resolution. Through his executive leadership role, he actively supports SGPNOW.com, an on-demand service geared towards real estate and property management professionals as well as individual home owners in need of inspection and property preservation services. Joe is also an integral force behind Compliance Connections, a branch of Safeguard Properties that allows code enforcement professionals to report violations at properties that can then be addressed by the Safeguard vendor network. Compliance Connections also researches and shares vacant property ordinance information with Safeguard clients.

Joe has an MBA from The Weatherhead School of Management at Case Western Reserve University, is a Certified Management Accountant (CMA), and holds a bachelor’s degree from The Ohio State University’s Honors Accounting program.

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Business Development

Carrie Tackett

Business Development Safeguard Properties