FHA Single Family Housing COVID-19 Q&A

Updated 5/11/20: HUD has enhanced its COVID-19 FAQ resource to include expanded guidance for a variety of categories related to lending/servicing.

FHA Resource Center Bulletin Board

Updated 4/14/20:
HUD updated its COVID-19 frequently asked questions (FAQ) resource for single family housing stakeholders.

Full FAQ

Latest additions:

Page 3-4 (Origination and Processing):

Q. Mortgagees have been unable to obtain tax transcripts during the COVID-19 Emergency, does FHA require tax transcripts directly from the Internal Revenue Service (IRS)?
A. No. The mortgagee must obtain the borrower’s signature on the appropriate IRS form to obtain tax returns directly from the IRS for all credit-qualifying mortgages at the time the final Uniform Residential Loan Application (URLA) is executed. If FHA requires tax returns as required documentation for any type of effective income, in lieu of signed individual or business tax returns from the borrower, the mortgagee may obtain a signed IRS Form 4506, Request for Copy of Tax Return, IRS Form 4506-T, Request for Transcript of Tax Return, or IRS Form 8821, Tax Information Authorization, and tax transcripts directly from the IRS.

Page 6 (Closing and Insuring):

Q. On Title insurance: There are several large counties where recording offices are shut during the COVID-19 Emergency. Will FHA accept title policies with gap insurance?
A. FHA does not mandate title insurance. However, the mortgagee must ensure that all objections to title have been cleared and any discrepancies have been resolved, to ensure that the FHA-insured mortgage is in first lien position. FHA does not object to mortgagees obtaining gap insurance to protect against the potential of not obtaining first lien position.

Q. Does FHA accept loans closed using a remote online notary during the COVID-19 Emergency? If so, which states are allowed under your policy?
A. FHA does not regulate the use or format of the notarization of documents. The mortgagee must ensure that the mortgage and Note comply with all applicable state and local requirements for creating a recordable and enforceable mortgage, and an enforceable Note, including the requirements for notarization of these documents. Generally, the state law governs what requirements are applicable for proper notarization of a document.

Q. Does FHA permit the use of a Power of Attorney (POA) to execute closing documents during the COVID-19 Emergency?
A. FHA permits a borrower to designate an attorney-in-fact to use a POA to sign documents on their behalf at closing, including page 4 of the final Form HUD-92900-A, HUD/VA Addendum to Uniform Residential Loan Application (URLA), and the final Fannie Mae Form 1003/Freddie Mac Form 65, URLA. Detailed requirements on the use of a POA to execute closing documents can be found in the SF Handbook, Section II.A.6.a(xiii). Included in this section are specific requirements for use of a POA, which has a connection to the transaction.

Page 7 (Servicing and Loss Mitigation):

Q. Does the borrower have to email or call their mortgagee to request a COVID-19 Forbearance? What other methods of communication are acceptable?
A. A borrower may request a COVID-19 Forbearance from their mortgagee via any available method of communication. Acceptable methods of communication regarding a forbearance include, but are not limited to, emails, texts, fax, teleconferencing, websites, web-portals, etc. If a mortgagee sends out a general communication advising that forbearance can be granted, the borrower may reply to that communication requesting a forbearance, via e-mail, phone call, or other methods of communication clearly made available to the borrower by the lender.

Page 8 (Servicing and Loss Mitigation):

Q. What are the options for borrowers, impacted by the COVID-19 pandemic, who were more than 30 days delinquent on March 1, 2020?
A. All FHA borrowers impacted by the COVID-19 pandemic, whether directly or indirectly, qualify for the COVID-19 Forbearance. The COVID-19 Standalone Partial Claim is available to owner-occupant borrowers whose mortgages were current or less than 30 days delinquent as of March 1, 2020, the declared date of the COVID-19 pandemic. Borrowers who were more than 30 days past due as of March 1, 2020, and who are in need of loss mitigation assistance, must be reviewed for FHA’s standard loss mitigation options (forbearance, loan modification, and FHA-HAMP).

Page 9 (Servicing and Loss Mitigation):

Q. Can a borrower obtain more than one COVID-19 Standalone Partial Claim?
A. Only one COVID-19 Standalone Partial Claim is available to each borrower. If the borrower requires additional assistance, mortgagees must evaluate the borrower for HUD’s Loss Mitigation Options.

Q. For the purpose of servicing, when are exceptions to the appraisal inspection protocols for the use of exterior-only and desktop-only scope of work, due to the COVID-19 National Emergency, permitted?
A. Appraisals completed in connection with the servicing of FHA’s forward or HECM portfolios may accept either an exterior-only or desktop appraisal.

Page 11 (HECM):

Q: Are HECM property charge repayment plans, as described in ML 2015-11, considered unsuccessful if the borrower’s payment is more than 60 days delinquent during the Presidentially-Declared COVID-19 National Emergency?
A. Yes. A property charge repayment plan is unsuccessful if a borrower does not make a full monthly payment within 60 days of the due date. HUD has issued a temporary waiver to remove the $5,000 total arrearage limit from ML 2015-11 to allow mortgagees to offer new repayment plans to borrowers regardless of the total remaining amount of their outstanding property charge arrearage.

Q. Are all HECM foreclosure and claim deadlines included in the COVID-19 HECM extensions announced in ML 2020-06, such as notifying HUD that a HECM is due and payable, sending notification to the borrowers or their heirs that a loan is due and payable, obtaining a due and payable appraisal, and the six-month marketing period?
A. Yes, all foreclosure and claim deadlines may be extended for a period not to exceed six months, with an additional extension period, not to exceed six months, available with HUD approval for all HECMs that have become automatically due and payable, entered into a deferral period or became due and payable with HUD approval.

Page 12 (HECM):

Q. What evidence does the mortgagee need to retain to support the borrower’s request to delay submission of a Due and Payable request in accordance with ML 2020-06 for the COVID-19 National Emergency?
A. There are no documentation requirements for this extension, but FHA encourages mortgagees to maintain complete servicing notes including information regarding the borrowers’ request.

Q. Should a mortgagee still perform monthly occupancy inspections during the COVID-19 National Emergency, as described in 24 CFR 206.140, when a borrower has requested, or the mortgagee has opted to utilize a six-month extension?
A. Yes, the requirements of 24 CFR §206.140 remain in effect. If a HECM is in a due and payable status and the property is vacant or abandoned, the mortgagee must conduct the monthly visual inspections of the property as required by 24 CFR §206.140 including during an extension period. These inspections are exterior-only and no physical contact with the borrower and/or occupants is required since the property is either vacant or abandoned.

Q. Must servicers give HECM borrowers a forbearance, upon the request of a borrower, during the COVID-19 National Emergency if the loan has already been called due and payable with HUD approval?
A. Yes. HECM servicers must follow the provisions of the CARES Act requiring a forbearance upon request of the borrower for all federally insured mortgages. FHA has provided servicers with an extension to all foreclosure and claim deadlines for loans that have become due and payable with HUD approval during the COVID-19 National Emergency. This extension would cover any required CARES Act forbearance time period and provides servicers with additional time to take certain actions to meet FHA guidelines.


Investor Update

April 8, 2020 

Source: HUD

Important Information Regarding Continuation of Business Operations Related to COVID-19

As it relates to COVID-19 (Coronavirus), the Federal Housing Administration (FHA) wants to assure its mortgagees and other interested stakeholders of its continued business operations in this evolving environment, should some or all its offices be required to close. This Question and Answer (Q&A) document has been prepared to address and provide answers to stakeholder questions regarding the continuity of FHA’s business operations and any possible impacts. This Q&A will be revised as needed. Stakeholders are advised to regularly access this document for updates.

Latest Additions (4/3/20):

Q38: Will interest on my HECM be waived during the COVID-19 Presidentially Declared National Emergency?

A38: Interest will continue to accrue on all HECM loans. However, any borrower in an extension period relating to the COVID-19 Presidentially- Declared National Emergency will not be charged any late fees or penalties during this time.

x

CHIEF EXECUTIVE OFFICER

Alan Jaffa

Alan Jaffa is the chief executive officer for Safeguard, 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® finalist in 2013.

x

Chief Operating Officer

Michael Greenbaum

Michael Greenbaum is the chief operating officer for Safeguard. Mike has been instrumental in aligning operations to become more efficient, effective, and compliant with our ever-changing industry requirements. Mike has a proven track record of excellence, partnership and collaboration at Safeguard. Under Mike’s leadership, all operational departments of Safeguard have reviewed, updated and enhanced their business processes to maximize efficiency and improve quality control.

Mike joined Safeguard in July 2010 as vice president of REO and has continued to take on additional duties and responsibilities within the organization, including the role of vice president of operations in 2013 and then COO in 2015.

Mike built his business career in supply-chain management, operations, finance and marketing. He has held senior management and executive positions with Erico, a manufacturing company in Solon, Ohio; Accel, Inc., a packaging company in Lewis Center, Ohio; and McMaster-Carr, an industrial supply company in Aurora, Ohio.

Before entering the business world, Mike served in the U.S. Army, Ordinance Branch, and specialized in supply chain management. He is a distinguished graduate of West Point (U.S. Military Academy), where he majored in quantitative economics.

x

CHIEF INFORMATION OFFICER

George Mehok

George Mehok is the chief information officer for Safeguard. He is responsible for all strategic technology decisions, new systems deployments and data center operations supporting a national network of more than 10,000 mobile workers.

George has more than 20 years of leadership experience dedicated to high-growth companies in the mobile telecommunications and financial services industries, spanning startups to global industry leaders.

George played a senior role in the formation of Verizon Wireless, leading the IT product development and strategic planning team. He led the integration planning for the Verizon merger including: GTE, Vodafone-AirTouch, Bell Atlantic Mobile and PrimeCo.

As chief information officer at Revol Wireless, a VC-backed CDMA wireless communications network operator, George’s team implemented an integrated technology infrastructure and award-winning business intelligence platform.

George holds a bachelor’s degree in political science and economics from Eastern Michigan University and an M.B.A. from The Ohio State University. He is a board member of Akron University’s School of Business Center for Information Technology, in addition to an advisory board member for OHTec.

In 2013, George won the Crain’s Cleveland Business CIO of the Year award for his team’s work in completing a major acquisition and technology transformation at Safeguard. In 2015, George’s team was recognized by InformationWeek’s annual Elite 100 ranking of the most innovative U.S.-based users of business technology. The mobile inspection technology developed at Safeguard was selected as InformationWeek’s “One of the top 20 ideas to steal in 2015”.

x

General Counsel and Executive Vice President

Linda Erkkila, Esq.

Linda Erkkila is the general counsel and executive vice president for Safeguard, with oversight responsibilities for the legal, human resources, training, compliance and audit departments. Linda’s broad scope of oversight covers regulatory issues that impact Safeguard’s operations, pro-active risk mitigation, enterprise strategic planning, human capital and training initiatives, compliance and audit services, litigation and claims management, and counsel related to mergers, acquisition and joint ventures.

Linda’s oversight of the legal department along with multiple compliance and human capital focused departments assures that Safeguard’s strategic initiatives align with its resources, leverage opportunities across the company, and contemplate compliance mandates. Her practice spans almost 20 years, and Linda’s experience, both as outside and in-house counsel, covers a wide range of corporate matters, including regulatory disclosure, corporate governance compliance, risk assessment, executive compensation, litigation management, and merger and acquisition activity. Her experience at a former Fortune 500 financial institution during the subprime crisis helped develop Linda’s pro-active approach to change management during periods of heightened regulatory scrutiny.

Linda previously served as vice president and attorney for National City Corporation, as securities and corporate governance counsel for Agilysys Inc., and as an associate at Thompson Hine LLP. She earned her JD at Cleveland-Marshall College of Law. Linda holds a degree in economics from Miami University and an MBA. In 2017, Linda was named as both a “Woman of Influence” by HousingWire and as a “Leading Lady” by MReport.

x

Chief Financial Officer

Joe Iafigliola

Joe Iafigliola is the Chief Financial Officer for Safeguard. Joe is responsible for the Control, Quality Assurance, Business Development, Accounting & Information Security departments, and is a Managing Director of SCG Partners, a middle-market private equity fund focused on diversifying and expanding Safeguard Properties’ business model into complimentary markets.

Joe has been in a wide variety of roles in finance, supply chain management, information systems development, and sales and marketing. His career includes senior positions with McMaster-Carr Supply Company, Newell/Rubbermaid, and Procter and Gamble.

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.

x

AVP, Operations

Jennifer Jozity

Jennifer Jozity is the assistant vice president of operations, overseeing inspections, REO and property preservation for Safeguard. Jen ensures quality work is performed in the field and internally, to meet and exceed our clients’ expectations. Jen has demonstrated the ability to deliver consistent results in order audit and order management.  She will build upon these strengths in order to deliver this level of excellence in both REO and property preservation operations.

Jen joined Safeguard in 1997 and was promoted to director of inspections operations in 2009 and assistant vice president of inspections operations in 2012.

She graduated from Cleveland State University with a degree in business.

x

AVP, Finance

Jennifer Anspach

Jennifer Anspach is the assistant vice president of finance for Safeguard. She is responsible for the company’s national workforce of approximately 1,000 employees. She manages recruitment strategies, employee relations, training, personnel policies, retention, payroll and benefits programs. Additionally, Jennifer has oversight of the accounts receivable and loss functions formerly within the accounting department.

Jennifer joined the company in April 2009 as a manager of accounting and finance and a year later was promoted to director. She was named AVP of human capital in 2014. Prior to joining Safeguard, she held several management positions at OfficeMax and InkStop in both operations and finance.

Jennifer is a graduate of Youngstown State University. She was named a Crain’s Cleveland Business Archer Award finalist for HR Executive of the Year in 2017.

x

AVP, Application Architecture

Rick Moran

Rick Moran is the assistant vice president of application architecture for Safeguard. Rick is responsible for evolving the Safeguard IT systems. He leads the design of Safeguard’s enterprise application architecture. This includes Safeguard’s real-time integration with other systems, vendors and clients; the future upgrade roadmap for systems; and standards designed to meet availability, security, performance and goals.

Rick has been with Safeguard since 2011. During that time, he has led the system upgrades necessary to support Safeguard’s growth. In addition, Rick’s team has designed and implemented several innovative systems.

Prior to joining Safeguard, Rick was director of enterprise architecture at Revol Wireless, a privately held CDMA Wireless provider in Ohio and Indiana, and operated his own consulting firm providing services to the manufacturing, telecommunications, and energy sectors.

x

AVP, Technology Infrastructure and Cloud Services

Steve Machovina

Steve Machovina is the assistant vice president of technology infrastructure and cloud services for Safeguard. He is responsible for the overall management and design of Safeguard’s hybrid cloud infrastructure. He manages all technology engineering staff who support data centers, telecommunications, network, servers, storage, service monitoring, and disaster recovery.

Steve joined Safeguard in November 2013 as director of information technology operations.

Prior to joining Safeguard, Steve was vice president of information technology at Revol Wireless, a privately held wireless provider in Ohio and Indiana. He also held management positions with Northcoast PCS and Corecomm Communications, and spent nine years as a Coast Guard officer and pilot.

Steve holds a BBA in management information systems from Kent State University in Ohio and an MBA from Wayne State University in Michigan.

x

AVP, Business Development

Tim Rath

Tim Rath is the AVP of business development for Safeguard. He is responsible for developing innovative growth strategies for Safeguard and developing and overseeing potential partnerships, mergers and acquisitions.

Tim joined Safeguard in 2011 as project director and has filled numerous roles within Vendor Management, most recently serving as director of vendor management, a role he assumed in 2011.

Prior to Safeguard, Tim worked as director of supply chain at PartsSource Inc. in Aurora, Ohio, a provider of medical replacement parts, procurement solutions and healthcare supply chain management technology services. He also has held sales positions with Rexel, ComDoc, and Pier Associates, all based in Ohio.

Tim holds a degree in marketing and sales from The University of Akron in Akron, Ohio. He also earned his FAA Certified Commercial UAS (Drone) Pilot license in 2017.

x

Assistant Vice president of Application Development

Steve Goberish

Steve Goberish, is the assistant vice president of application development for Safeguard. He is responsible for the maintenance and evolution of Safeguard’s vendor systems ensuring high-availability, security and scalability while advancing the vendor products’ capabilities and enhancing the vendor experience.

Prior to joining Safeguard, Steve was a senior technical architect and development manager at First American Title Insurance, a publicly held title insurance provider based in southern California, in addition to managing and developing applications in multiple sectors from insurance to VOIP.

Steve has a bachelor’s degree from Kent State University in Ohio.