Safeguard Properties

HUD: FHA INFO #21-66: Waivers for COVID-19 Recovery Options

Posted on by Safeguard

Investor Update
August 5, 2021

Source: HUD (FHA INFO #21-66 PDF)

In this Announcement:

• FHA Announces Waivers to the Review Requirements for Its COVID-19 Advance Loan Modification and COVID-19 Recovery Options

• Reminder of Upcoming COVID-19 Recovery Options Industry Webinar

See below for details.

Today, the Federal Housing Administration (FHA) issued the following partial waivers to its policies pertaining to COVID-19 Advance Loan Modification (COVID-19 ALM) and COVID-19 Recovery Loss Mitigation Options (COVID-19 Recovery Options):

• Partial Waiver of the Borrower Review Requirements for the COVID-19 Advance Loan Modification in Handbook 4000.1 and Mortgagee Letter 2021-18

• Partial Waiver of the Re-Review of Borrower Requirements for the COVID-19 Recovery Loss Mitigation Options in Mortgagee Letter 2021-18.

These waivers address the mortgagee’s timeframes and borrower eligibility for a required review or re-review for the COVID-19 ALM and the COVID-19 Recovery Options.

Mortgagees are encouraged to thoroughly review the two waivers that posted today as well as the COVID-19 ALM and COVID-19 Recovery Options policies outlined in ML 2021-15 and ML 2021-18, respectively.

To view full announcement, please click the source link above.

Newly Ignited River Fire Raging in Two Northern California Counties

Posted on by Safeguard

Disaster Alert
August 5, 2021

Source: CNN

Additional Resource:

CBS 13 Sacramento (River Fire Grows To 2,400 Acres; Zero Containment Reported)

Approximate impacted areas:

California

– Colfax (Placer County, 95713)
– Grass Valley (Nevada County, 95945)

NOTE: This has NOT yet been declared a FEMA Major Disaster.

(CNN)A newly ignited fire in Northern California has forced thousands of residents to evacuate their homes as the US fights 96 large active fires that have scorched nearly two million acres.

The River Fire, raging in Nevada and Placer counties in California, has destroyed or damaged an estimated 40 structures since it started Wednesday, CalFire Deputy Chief Jim Hudson said during a news briefing. It has already torn through 1,400 acres and was not contained at all Wednesday evening.
In Placer County, nearly 2,400 people are under evacuation, Placer County Sheriff’s Office spokesman Nelson Resendes said. In Nevada County, at least 4,200 residents are under an evacuation order or warning, Nevada County Sheriff Shannan Moon said.

For full report, please click the source link above.

CDC Issues Eviction Order in Areas of Substantial and High Transmission

Posted on by Ashley Shepherd

Industry Update
August 3, 2021

Source: Centers for Disease Control and Prevention

CDC Director Dr. Rochelle Walensky today signed an order determining the evictions of tenants for failure to make rent or housing payments could be detrimental to public health control measures to slow the spread of SARS-CoV-2, the virus that causes COVID-19. This order will expire on October 3, 2021 and applies in United States counties experiencing substantial and high levels of community transmission levels of SARS-CoV-2.

The eviction moratorium allows additional time for rent relief to reach renters and to further increase vaccination rates. In the context of a pandemic, eviction moratoria—like quarantine, isolation, and social distancing—can be an effective public health measure utilized to prevent the spread of communicable disease. Eviction moratoria facilitate self-isolation and self-quarantine by people who become ill or who are at risk of transmitting COVID-19 by keeping people out of congregate settings and in their own homes.

CDC remains committed and will continue to explore and use all of the tools at our disposal to protect the health and well-being of Americans affected by the COVID-19 pandemic.  The order can be found at: https://www.cdc.gov/coronavirus/2019-ncov/covid-eviction-declaration.html.

The below can be attributed to CDC Director Dr. Rochelle Walensky:

The emergence of the delta variant has led to a rapid acceleration of community transmission in the United States, putting more Americans at increased risk, especially if they are unvaccinated. This moratorium is the right thing to do to keep people in their homes and out of congregate settings where COVID-19 spreads. It is imperative that public health authorities act quickly to mitigate such an increase of evictions, which could increase the likelihood of new spikes in SARS-CoV-2 transmission.  Such mass evictions and the attendant public health consequences would be very difficult to reverse.

Record Wildfire Burns Amid Drought on Hawaii’s Big Island

Posted on by Safeguard

Disaster Alert
August 3, 2021

Source: ABC News

Additional Resource:

Hawaii News Now (‘We’re Going to Help Them’: Neighbors Focus on Rebuilding After Big Island Wildfire)

Approximate impacted areas:

Hawaii

– Honokaa (Hawaii County, 96727)
– Waikoloa Village (Hawaii County, 96738, 96743)
– Waimea (Hawaii County, 96743)

NOTE: This has NOT yet been declared a FEMA Major Disaster.

Firefighters have gained more control over a Hawaii wildfire that forced thousands of people to evacuate over the weekend and destroyed at least two homes on the Big Island

HONOLULU — Firefighters gained more control over a wildfire in Hawaii that forced thousands of people to evacuate over the weekend and destroyed at least two homes on the Big Island, but officials warned that strong winds will return on Tuesday, raising the danger again.

Authorities have lifted evacuation orders but warned they could be reinstated at any time and that people should be ready to go.

“It’s the biggest (fire) we’ve ever had on this island,” Big Island Mayor Mitch Roth said of the more than 62-square-mile (160-square-kilometer) blaze. “With the drought conditions that we’ve had, it is of concern. You see something like this where you’re putting thousands of homes in danger, it’s very concerning.”

Fires in Hawaii are unlike many of those burning in the U.S. West. They tend to break out in large grasslands on the dry sides of the islands and are generally much smaller than mainland fires.

Even though Hawaii has a wet, tropical climate that isn’t typically at risk from large fires, blazes could become more frequent as climate change-related weather patterns intensify.

For full report, please click the source link above.

Safeguard Outlines Key Areas for Protecting and Preserving Properties

Posted on by Safeguard

Safeguard in the News
July 30, 2021

Source: Five Star Institute

Even in tough times, mortgage field services providers adjust to deliver quality

Protecting and preserving properties is imperative to ensuring communities do not become overrun with blight and properties remain secure. In the early stages of the COVID-19 pandemic, mortgage field services providers were challenged with maintaining these consistent, high servicing standards. As states began issuing stay-at-home or shelter-in-place orders, they had to address issues in the field as they arose and complete work in areas where it was not prohibited completely.

Now that we are halfway through 2021 and health orders are being lifted in states across the country, mortgage field services providers need to shift their focus on three key areas of their businesses to ensure mortgage servicer portfolios remain secure and protected. The FHA conveyance process, in addition to mitigating book loss while ensuring quality results, and scaling for volume are some areas that would benefit from streamlined processes as properties emerge from forbearance.

FHA: How to Successfully Convey a Property Within 30 Days

The FHA Single-Family Housing Policy Handbook requires a handful of very specific conditions in which the property must be before conveying the loan back to HUD:

• The property is undamaged by Big 6 damages
• The property is secured and, if applicable, winterized
• All insured damages including theft and vandalism are repaired per the scope of work
• Interior and exterior debris are removed, and the property is in broom-swept condition
• The property’s lawn and all vehicles and any other personal property are maintained
• The property has a good and marketable title

Before the foreclosure sale, if your disposition strategy takes the property down the path of conveyance back to HUD, then the goal should become getting the property into conveyance condition apart from debris removal, before the foreclosure sale.

Once the foreclosure sale is held, debris is removed, and the property is ready to convey to HUD. Servicer generated allowable(s) to cure extenuating conditions such as mold, roof, and water reduce the risk of further damage and elongated timelines.

Repairing Big 6 damages concurrent to the conclusion of a hazard insurance claim once the adjustor has been dispatched to the property coupled with an allowable for supplement claims greatly reduces the timeline post-sale.

A Simple 5-Step Approach

Step 1: Initial Secure—Address all conditions pre-sale apart from debris to increase on-time conveyance by a large margin
Step 2: Damages—Identify and document all damages.
Step 3: Claims—Repair concurrent to the claim conclusion proceeding the adjustor’s visit
Step 4: Allowables—Provided for issues such as mold, roof, and water rather than walking away from the property and risking further damage
Step 5: Disposition—Capitalize on an opportunity where gains are possible. (i.e., good property, buy and rehab; offset losses on other properties)

Mitigating Book Loss

Paying for property preservation services but not being able to claim the expense to the insurer or investor is a top concern for mortgage servicers. There are several specific processes that lead to book loss that can be improved.

• Over-allowable requests sent to HUD (MCM) getting denied for non-timely foreclosure: The best practice we have seen is designating a specific point of contact to receive these denials, ensuring clients have a workload system so they can track the open requests to their attorney network. Once the chronology is returned, have someone carefully review, add in servicing details (bankruptcy, loss mitigation activity, etc.) and make sure all time periods are covered. Ensure it is complete before appealing the denial.

• Incomplete assessment at first entry: All liability shifts to the mortgagee upon first entry into the property. You either document it or you pay for it. Safeguard has stood up a practice where we complete a second, independent review of initial secure work orders 45 days after the first review. We are confirming that the secondary processes of bids, appeals, and damages were completed fully and accurately, and revalidating the complete assessment.

• Bid after the fact (BATF): Given all the rules at play and the possibility of having multiple orders open at the same time, it is possible to run over allowable limits unintentionally. We have stood up practices to systemically check investor set limits versus expenditures and proactively launch over-allowable requests to cover the expense.

Scaling for Volume

Over the past few years, there has been a significant downturn in volume, allowing time to adjust business practices and prepare for fluctuations in the market. It also has been an opportunity to adjust processes for the latest crisis, the COVID-19 pandemic. Mortgage field services companies have scaled their vendor networks in anticipation of the pending volume. To do so, they have implemented the following processes.

• Streamline Vendor Onboarding Process

– Introduce an expedited vendor program that allows vendors to immediately sign up and access orders same day

– Roll out a quick start insurance program, which allows potential vendors to test working within the property preservation industry before meeting required insurance thresholds/requirements

– Reorganize the credentialing process to get vendors into an active network quicker, while also ensuring that they have the necessary tools and information to succeed in the field

– Partner with a third party to provide background checks for vendors, eliminating the need for them to obtain on their own

• Enhance Technology for Vendors

– Make enhancements to optimize the vendor-facing website
* These changes help the vendors navigate themselves through the onboarding process

– Create an online learning portal to allow vendors to self-learn processes and mobile applications on their own time instead of via scheduled facilitated conference calls

• Increase Vendor Recruiting Efforts

– Partner with new third-party recruiting companies to assist with the onboarding of vendors in areas that have been challenging in the past

– Tap into multiple, innovative new channels to recruit talent across the U.S. and Puerto Rico

FHFA: Phyllis K. Fong Named Acting Inspector General

Posted on by Safeguard

Investor Update
July 30, 2021

Source: FHFA

Washington, D.C. – Today, the Federal Housing Finance Agency (FHFA) announced that Phyllis K. Fong will be the Acting Inspector General (IG). Fong will continue to serve as the IG for the U.S. Department of Agriculture (USDA) while she serves as the Acting FHFA IG.

As IG, Ms. Fong will be the senior official in the Office of Inspector General (OIG) responsible for audits, investigations, and other oversight activities relating to FHFA’s programs and operations.

“FHFA takes great pride in being a world-class prudential regulator. We strive to be good stewards of the resources taxpayers have entrusted to us. Inspector Fong’s leadership in FHFA OIG will provide the oversight required to ensure that FHFA executes our mission in an efficient and effective manner without waste, fraud, or abuse,” said Acting Director Sandra L. Thompson.

“FHFA OIG has an important mission – to provide oversight and recommendations to enable FHFA to deliver its programs as effectively as possible. I look forward to working with FHFA OIG’s staff to accomplish this mission, and appreciate Acting Director Thompson’s interest and support,” said Ms. Fong.

Ms. Fong has served as IG for USDA since 2002. Ms. Fong’s priorities as IG have been to focus USDA OIG’s resources on the protection of public health and safety related to USDA’s mission and operations, and to improve the management and financial integrity of the Department’s programs. Prior to her appointment at USDA, Ms. Fong served as the IG of the U.S. Small Business Administration (SBA).  Ms. Fong served as SBA’s Inspector General from April 1999 until December 2002. Prior to her appointment, Ms. Fong served as a career member of the Senior Executive Service, she held several senior management positions at SBA OIG.

From 2008 to 2014, Ms. Fong served as the first Chairperson of the Council of the Inspectors General on Integrity and Efficiency (CIGIE), an independent agency established by Congress in the Inspector General Reform Act of 2008. Ms. Fong also served as a member of the Recovery Accountability and Transparency Board, established by Congress to oversee Federal spending under the American Recovery and Reinvestment Act of 2009 until its sunset in September 2015. The Board’s responsibilities included oversight of disaster relief funds for Hurricane Sandy.

Ms. Fong was born in Philadelphia, Pennsylvania, and raised in Honolulu, Hawaii. She graduated from Pomona College with a B.A. degree in Asian studies and earned her J.D. degree from Vanderbilt University School of Law. Ms. Fong is a member of the Tennessee and District of Columbia bars.  She and her husband have two children.

Contacts:

​Media: Raffi Williams Raffi.Williams@FHFA.gov / Adam Russell Adam.Russell@FHFA.gov

FHFA: Apply for Emergency Rental Assistance Before Evicting Tenants

Posted on by Safeguard

Investor Update
July 30, 2021

Source: FHFA

Additional Resource:

FHFA (Secretaries of USDA, HUD, VA, Treasury, and FHFA Acting Director Release Joint Statement on Agency Actions to Prevent Evictions)

Washington, D.C. – Today, the Federal Housing Finance Agency (FHFA) is encouraging landlords of properties backed by Fannie Mae or Freddie Mac (the Enterprises) to apply for Emergency Rental Assistance before starting the process of evicting a tenant for non-payment of rent.

“As mentioned in the joint statement​ issued today by the leaders of the agencies that oversee federal housing programs, billions of dollars are available in Emergency Rental Assistance to help tenants stay safely in their homes. Landlords can, and should, apply for the funds if their tenants are unable to pay rent due to financial difficulties resulting from the COVID-19 pandemic,” said Acting Director Sandra L. Thompson. “Evictions hurt families and cost landlords money, so they should be avoided if possible, especially during the pandemic. Emergency Rental Assistance is available to keep tenants in their homes while allowing property owners to collect rent.”

The Emergency Rental Assistance funds were made available by federal legislation to help tenants who are behind on rent or continuing to experience hardship due to the COVID-19 pandemic. Tenants and landlords can learn more about local Emergency Rental Assistance providers by visiting the Consumer Financial Protection Bureau’s online Rental Assistance Finder. For more information on options available to assist homeowners and renters impacted by COVID-19 visit FHFA.gov or CFPB.gov/housing.

Contacts:

​Media: Raffi Williams Raffi.Williams@FHFA.gov / Adam Russell Adam.Russell@FHFA.gov

VA: Circular 26-21-14: Eviction Relief for Borrowers Affected by COVID-19

Posted on by Safeguard

Investor Update
July 30, 2021

Source: VA

Additional Resource:

FHFA (Secretaries of USDA, HUD, VA, Treasury, and FHFA Acting Director Release Joint Statement on Agency Actions to Prevent Evictions)

1. Background and Purpose. Under Chapter 37 of Title 38, United States Code, and Executive Orders related to the COVID-19 national emergency, VA has taken numerous steps to help Veterans who are experiencing financial hardships, directly or indirectly, as a result of the COVID-19 pandemic. The purpose of this Circular is to extend eviction relief.

2. Moratorium on Eviction. Through September 30, 2021, foreclosure-related evictions are not to be initiated or completed on properties previously secured by VA-guaranteed loans (including properties in VA’s Real Estate Owned portfolio). This moratorium does not apply to vacant or abandoned properties.

3. Questions: Any questions regarding this Circular should be submitted via email to valerihelpdesk.vbaco@va.gov.

4. Rescission: This Circular is rescinded October 1, 2021.

USDA: Extension of a COVID-19 Foreclosure Related Eviction Moratorium

Posted on by Safeguard

Investor Update
July 30, 2021

Source: USDA

Additional Resource:

FHFA (Secretaries of USDA, HUD, VA, Treasury, and FHFA Acting Director Release Joint Statement on Agency Actions to Prevent Evictions)

HUD: Federal Housing Administration Extends Single Family Eviction Moratorium

Posted on by Safeguard

Investor Update
July 30, 2021

Source: HUD

Additional Resource:

FHFA (Secretaries of USDA, HUD, VA, Treasury, and FHFA Acting Director Release Joint Statement on Agency Actions to Prevent Evictions)

Today’s announcement extends the eviction moratorium through September 30 for foreclosed borrowers and other occupants and notes expiration of the foreclosure moratorium on July 31.

WASHINGTON – The Federal Housing Administration (FHA) on July 30, 2021, announced an extension of its moratorium on evictions for foreclosed borrowers and their occupants through September 30, 2021, and noted the expiration of the foreclosure moratorium on July 31, 2021. This extension is part of President Biden’s announcement on July 29 that federal agencies will use their authority to extend their respective eviction moratoria through the end of September, which will provide continued protection for households living in federally-insured, single-family properties. FHA’s eviction moratorium extension will avoid displacement of foreclosed borrowers and other occupants who need more time to access suitable housing options after foreclosure.

“We must continue to do everything within our authority to make sure that foreclosed borrowers who are impacted by the pandemic have the time and resources to secure safe and stable housing, whether it’s in their current homes, or by obtaining alternative housing options,” said Principal Deputy Assistant Secretary for Housing Lopa P. Kolluri. “We don’t want to see any individuals or families displaced unnecessarily while trying to recover from the pandemic.”

With today’s announcement, mortgage servicers must continue to halt evictions for FHA Single Family Title II forward and Home Equity Conversion Mortgage (HECM) foreclosed properties, except for those properties that are legally vacant or abandoned.

Mortgage servicers may initiate or continue foreclosures in accordance with FHA requirements once the Single Family foreclosure moratorium expires as planned on July 31, 2021, but may not evict a foreclosed borrower or other occupant.

Important Information for Borrowers Facing Foreclosure

FHA urges those who are behind on their mortgage payments or are having difficulty complying with the terms of their reverse mortgage or Home Equity Conversion Mortgage (HECM), and have not yet contacted their mortgage servicer, to do so immediately. By contacting their servicer, borrowers can obtain a mortgage payment forbearance or a HECM extension. For FHA forward mortgages, FHA also urges borrowers to engage with their mortgage servicer when their mortgage servicer contacts them about the new COVID-19 Advance Loan Modification or how to bring their mortgage current. Borrowers who are seeking more information on the options available to them should also consider contacting a HUD-approved housing counseling agency.