Safeguard Properties

Freddie Mac: Taxpayer First Act and Use of Tax Return Information

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Updated 12/20/19: Freddie Mac issued a release highlighting information made available by the Internal Revenue Service (IRS) that helps clarify the application of Section 2202 of the Taxpayer First Act.

New IRS Information on Taxpayer First Act

Investor Update
November 6, 2019

Source: Freddie Mac

This notice is being provided as a courtesy to our clients.

The Taxpayer First Act, signed into law on July 1, 2019, includes a provision that persons receiving tax return information must obtain the express permission of taxpayers prior to disclosing it to any other person. This component of the law goes into effect on December 28, 2019. “Tax return information” is defined under the IRS Code, 26 U.S.C. § 6103.

Sellers or Servicers obtaining tax return information after taxpayer consent during the origination or servicing of a mortgage also must obtain the consent of the taxpayer to be able to share this information with another party. Such permitted sharing should extend to actual or potential owners of the loan, such as Freddie Mac or any other loan participant.

The Internal Revenue Service has indicated that it has no plans at this time to provide a standard form to use when disclosing or sharing tax return information with other parties.

The Mortgage Industry Standards Maintenance Organization (MISMO®) drafted a sample Taxpayer Consent Form designed for Sellers/Servicers to use for this purpose. MISMO members can access this sample form on the MISMO website. Sellers/Servicers may also prepare their own taxpayer consent form, as long as the form provides the Seller/Servicer with express permission to obtain tax return information and to share it with potential loan purchasers in accordance with the terms of the Act.

The Freddie Mac Single-Family Seller/Servicer Guide (Guide) requires compliance with all federal, State and local laws. Once the law becomes effective on December 28, 2019, Sellers must obtain a signed taxpayer consent form from borrowers for all mortgages with Freddie Mac settlement dates on or after December 28, 2019.

Servicers must also obtain signed consent forms on or after this date when tax return information is obtained as part of the servicing function (for example, when processing a mortgage modification). We will update our Guide with a future Guide Bulletin to require that a signed copy of the consent form be maintained in the mortgage file.

Clients should consult their legal counsel or compliance department regarding compliance with the Taxpayer First Act.

 

Fannie Mae: Modification Interest Rate Adjustment Update

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Investor Update
November 6, 2019

Source: Fannie Mae

The Fannie Mae Modification Interest Rate is subject to periodic adjustments based on an evaluation of prevailing market rates. The servicer must use the current Fannie Mae Modification Interest Rate indicated below when evaluating a borrower for a conventional mortgage loan modification.

NOTE: As a reminder, the interest rate used to determine the final modification terms must be the same fixed interest rate that was used when determining eligibility for the Trial Period Plan and calculating the Trial Period Plan payment.

To view exhibit, please click the source link above.

Fannie Mae: Selling and Servicing Notice

Posted on by Safeguard

Updated 12/19/19: Fannie Mae confirmed an Internal Revenue Service (IRS) post clarifying that Section 2202 of the Taxpayer First Act is effective only for disclosures made by the IRS with the taxpayer’s consent after Dec. 28, 2019, and any subsequent redisclosures and uses of such information.

IRS Clarifies Effective Date and Scope of Taxpayer First Act

Updated 12/16/19: Fannie Mae issued an updated version of the Taxpayer First Act and Use of Tax Return Information Selling and Servicing Update previously released on November 6, 2019.

Selling and Servicing Notice (updated version)

Investor Update
November 6, 2019

Source: Fannie Mae

The Taxpayer First Act was signed into law on July 1, 2019. It includes a provision that persons receiving return information must obtain the express permission of taxpayers prior to disclosing that return information to any other person. “Tax return information” is defined under the IRS Code, 26 U.S.C. § 6103.

Therefore, if a lender or servicer obtains tax return information during the origination or servicing of a mortgage loan, the lender or servicer must obtain express consent from the taxpayer to be able to share the tax information with another party. Such sharing would extend to actual or potential owners of the loan, such as Fannie Mae or any other loan participant. This component of the law goes into effect December 28, 2019.

The IRS has indicated that it has no plans at this time to provide a standard form related to disclosing or sharing tax return information with other parties. However, the Mortgage Industry Standards Maintenance Organization (MISMO®) drafted a sample Taxpayer Consent Form designed to allow sellers/servicers to share tax return information with other loan participants. (available to MISMO members). Sellers/servicers may also prepare their own taxpayer consent form, as long as the form provides the seller/servicer with express permission to share tax return information in accordance with the law.

This Notice is being provided as a courtesy to our customers. As a reminder, the Selling Guide requires compliance with all federal, state, and local laws. We are not imposing any new requirements over and above the sellers/servicers’ existing requirement to comply with the A3-2-01, Compliance with Laws. Because the law becomes effective on December 28, 2019, sellers should obtain signed taxpayer consent forms from borrowers in connection with all loans that are sold to or securitized by Fannie Mae on or after that date. Servicers must also obtain consent on or after December 28, 2019 when tax return information is obtained as part of the servicing function (for example, when processing a loan modification). As with all other origination and servicing records, a copy of the signed consent must be maintained in the loan file.

If customers have any questions or concerns regarding their compliance with the new law, they should contact their legal counsel or compliance department, Fannie Mae account team, Portfolio Manager, or our Single-Family Servicer Support Center at 1-800-2Fannie (1-800-232-6643).

Mortgage & Property Preservation Leaders Discuss Servicing and Regulation

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Safeguard in the News
November 4, 2019

Source: MReport

Beginning Sunday, November 3, industry leaders converged on The Mayflower Hotel in Washington, D.C., for the 2019 National Property Preservation Conference (NPPC). Presented by Safeguard Properties, the event included collaborative discussions about topics including code violations, vendor management, hazard claims, and other challenges and hot topics facing the property preservation sector.

After an opening night reception Sunday evening, NPPC kicked off in full Monday morning with a welcome speech from Safeguard Properties CEO Alan Jaffa. Continuing the legacy of Safeguard’s founder, the late Robert Klein, the National Property Preservation Conference brings together a cross-section of industry stakeholders to brainstorm on challenges such as natural disaster response, regulatory compliance, and more.

“I’m always energized by this conference and what it provides for our MCS team as well as the industry,” said MCS CEO, Caroline Reaves. “It’s the one time each year when we all get together and focus solely on property preservation. The MCS team always looks forward to this conference, as it provides an opportunity for open, honest dialogue with our peers in the industry.”

Monday morning also featured a Q&A session with The Hon. Brian D. Montgomery, Assistant Secretary for Housing—Federal Housing Commissioner, United States Department of Housing and Urban Development. Speaking with Ed Delgado, President & CEO, Five Star Global, Commissioner Montgomery discussed recent policy changes, including HUD’s increased role in oversight of the False Claims Act.

Dr. Benjamin Carson, Secretary of the Department of Housing and Urban Development, announced last week that HUD was implementing changes to annual eligibility certifications, loan limit certifications, and defect taxonomy under the Act, alterations which were designed to bring more depository lenders back to originating FHA loans.

Commissioner Montgomery told the crowd that HUD had been engaged in an ongoing dialog with the Justice Department from “day one” of the Trump administration regarding how to better manage the False Claims Act. Montgomery added that HUD had felt strongly that the annual eligibility certifications, loan limit certifications, and defect taxonomy changes all needed to be addressed at the same time.

Facing hurdles such as a government shutdown in the midst of this process, Commissioner Montgomery said the work on the False Claims Act revisions gained a new head of steam under Attorney General William Barr. After revising an initial document of proposed changes down from “around 12 pages to around six or seven pages,” HUD and the DOJ were able to come to a consensus, Commissioner Montgomery said.

Speaking of the changes and the revised procedure for handling False Claims Act cases, Commissioner Montgomery said, “It’s a good suite of products, because it speaks to when something has materiality, and it’s a very prescribed set of circumstances.”

Delgado also hosted his annual “State of the Industry” panel. This year, he was joined by industry leaders including:

  • Alan Jaffa, CEO, Safeguard Properties
  • Brian Martin, COO, Dakota Asset Services
  • Caroline Reaves, CEO, Mortgage Contracting Services
  • Tim Rood, Chairman and Managing Director, SitusAMC
  • Shubha Shivapurkar, Senior Director, Non-Performing Loans, Single-Family Operations, Freddie Mac
  • Jacob Williamson; VP, Single-Family Real Estate, Fannie Mae

The panelists discussed the most pressing challenges facing property preservation, including foreclosure rates, the fight against urban blight, technological innovations, and intervention practices.

“We live in a cyclical business,” Delgado said. “As much as we keep saying foreclosures are at 20 to 30-year lows … we’re starting to see some stress fractures in the housing economy that suggest that there is another trending cycle coming in.”

Jaffa explained how some government entities have taken an aggressive stance against mortgage servicers and lenders to remediate issues stemming from vacant properties. He suggested that the industry should be more proactive.

Caroline Reaves then gave an overview on the strength of the property preservation industry heading into 2020, and why now is the time for companies to be innovating.

“One of our clients said, ‘No one is innovative when you’re busy, because you don’t have time to be.’ We took that to heart,” Reaves said. “We’ve gone in and spent this time investing in technology.”

“We’ve put a lot of control and technology in place to make sure, as an industry, that we’re stronger, because [the economy] will turn,” Reaves continued.

The NPPC will continue through Tuesday, November 5, with more discussion and updates. Click here to learn more.

The Week Ahead: The State of Property Preservation

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Safeguard in the News
November 1, 2019

Source: DS News

The National Property Preservation Conference (NPPC), hosted by Safeguard Properties, is unfolding at the Mayflower Hotel in Washington, D.C., from November 3-5. This year, the conference will include keynotes from The Hon. Brian D. Montgomery, Assistant Secretary for Housing – Federal Housing Commissioner, United States Department of Housing and Urban Development; and Sandra Thompson, Director for the Division of Housing Mission and Goals for the Federal Housing Finance Agency.

On Monday morning at 9:00 a.m. ET, Ed Delgado, President & CEO of Five Star Global, will continue an annual tradition with his “State of the Industry” panel, featuring a lineup of industry experts discussing the trends and challenges facing both property preservation and the larger housing market and economy as a whole.

This year’s panelists include:

Other topics to be covered during the NPPC include code violations, vendor management, hazard claims, and other challenges and hot topics.  You can find more information about the NPPC, including a full schedule and panel lineup, on the official website.

VA: VALERI Servicer Newsflash

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Investor Update
October 31, 2019

Source: VA

IMPORTANT INFORMATION

Circular 26-19-24, Change 2 – Servicer Loss Mitigation Letters on Delinquent Loans, was issued on September 25, 2019, and is located at https://www.benefits.va.gov/homeloans/servicers_valeri.asp.

Circular 26-19-27 – Special Relief Following Hurricane Dorian, was issued on October 9, 2019, and is located at https://www.benefits.va.gov/homeloans/servicers_valeri.asp.

Circular 26-19-25, Change 1 – Transition from Veterans Information Portal (VIP) to LGY Hub, was issued on October 11, 2019, and is located at https://www.benefits.va.gov/homeloans/servicers_valeri.asp.

Servicer Loan Listing Report – An enhancement has been completed removing the 10,000-row limitation when exporting the report.

Post Audits – Currently, VALERI incorrectly indicates that documents are not required on Compromise Sale Claims and Compromise Sale Incentives. This defect is scheduled to be resolved in the system release on November 21, 2019. Documents are required for all post audit types, including incentives. Required document list is located in VALERI as a Servicer Knowledge Article.

Rejected Events – An event will reject if there is at least one fatal business rule failure. Servicers can view the business rule results by selecting the rejected event and the event rules, so they can determine what data fields require corrections to re-report the event.

Default Cured Loan Reinstated (DCLR) Event – When reporting via a nightly file, the DCLR event automatically generates when the reported payment due date is in the future and an Electronic Default Notice (EDN) is present on the loan for an outstanding episode of default. If an EDN was reported with the reason of Property Problems or Imminent Default, and the default is successfully resolved, the DCLR must be reported using the Event Bulk Upload Template.

REMINDERS
Accessing VALERI – The new VALERI application must be accessed with the Google Chrome browser.

Contacting VA – The assigned loan technician should continue to be first the point of contact (VA Servicer Handbook M26-4, Chapter 1). Loan Technician contact list is located in VALERI as a Servicer Knowledge Article. It is also available at https://www.benefits.va.gov/homeloans/servicers_valeri.asp. Servicers should refer to the contact list and ensure the correct email address is being used, as there may be multiple VA employees with the same name.

It is not necessary to copy the VALERI Helpdesk when contacting the assigned loan technician/Regional Loan Center (RLC). If a matter requires escalations beyond the loan technician, please refer to the RLC contact list located at https://www.benefits.va.gov/homeloans/servicers_valeri.asp to identify the correct VA management representative.

HUD: FHA INFO #19-53: Single Family Housing Policy Handbook 4000.1 Updated

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Investor Update
October 24, 2019

Source: HUD

Additional Resource:

FHA Single Family Housing Policy Library (Handbook 4.000.1 Transmittal 10/24/19)

Today, the Federal Housing Administration (FHA) published the quarterly update to its Single Family Housing Policy Handbook 4000.1 (SF Handbook). This publication updates and clarifies FHA’s servicing and claims policies, and includes additional updates to other sections of the SF Handbook.

The servicing and claims updates include:
• Revised guidance for FHA-Home Affordable Mortgage Program (FHA-HAMP) Trial Payment Plan (TPP) terms, including the requirement for TPP Agreement documents to stipulate the causes of TPP failure; and to clarify when the Mortgagee is required to waive late charges for instances when a Borrower is on, or is paying, its agreed upon Loss Mitigation Option.
• Clarification of the Property and Preservation timeframe requirements for securing and maintaining vacant properties.
• Clarification that Supplemental Claims for reconveyance must be submitted within six months of the final settlement date of the reacquisition claim.
• Restructured FHA’s Loss Mitigation Options for Borrowers in a Presidentially-Declared Major Disaster Area (PDMDA) per Mortgagee Letter 2019-14.

In addition, today’s update also includes:
• Incorporation of the Maximum Loan-To-Value and Combined Loan-To-Value Percentages for Cash-Out Refinance Mortgages per Mortgagee Letter 2019-11.
• Updates to the Condominium sections under “Required Documents” to incorporate reference to the newly approved HUD forms.

All stakeholders in FHA transactions should review and become familiar with the changes outlined in the SF Handbook Transmittal — as found on HUD’s Client Information Policy Systems’ (HUDCLIPS) Housing Handbooks web page. For reference, a version of the SF Handbook with highlighted text changes is also available and can be accessed from the SF Handbook Information Page.

Effective Dates
• Unless noted otherwise in the transmittal, previously announced effective dates are not impacted by these SF Handbook changes.
• SF Handbook changes identified in Section II of the Transmittal may be implemented with the original effective date of October 15, 2019, but must be implemented for case numbers assigned on or after January 2, 2020.
• Changes identified in Section III and IV may be implemented immediately, but must be implemented no later than January 2, 2020.

Quick Links
• Review the October 24, 2019 SF Handbook 4000.1 Transmittal at: http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/handbooks/hsgh
• Access the online and/or portable document format SF Handbook 4000.1 from HUDCLIPS Housing Handbooks web page at: http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/handbooks/hsgh
• View the redline version of the SF Handbook at: https://www.hud.gov/program_offices/housing/sfh/handbook_4000-1

Resources
Contact the FHA Resource Center:
• Visit our online knowledge base to obtain answers to frequently asked questions 24/7 at: www.hud.gov/answers.
• E-mail the FHA Resource Center at: answers@hud.gov. Emails and phone messages will be responded to during normal hours of operation, 8:00 AM to 8:00 PM (Eastern), Monday through Friday on all non-Federal holidays.
• Call 1-800-CALLFHA (1-800-225-5342). Persons with hearing or speech impairments may reach this number by calling the Federal Relay Service at 1-800-877-8339.

Fannie Mae: Servicing Notice

Posted on by Safeguard

Investor Update
October 30, 2019

Source: Fannie Mae

We are providing advance notice to servicers that effective December 31, 2020, Fannie Mae will retire the loan workout reporting and related functionality in HomeSaver Solutions Network (HSSN). As a part of Simplifying Servicing™, HSSN functionality is being transitioned to Fannie Mae’s Servicing Management Default Underwriter™ (SMDU), SMDU User Interface (UI), and SMDU Case Management for all workout reporting processes. Servicers currently utilizing HSSN are encouraged to fully transition this activity to SMDU as soon as possible, but must do so no later than the effective date.

For full announcement, please click the source link above.

Fast-Growing Fires Damage California Homes

Posted on by Safeguard

Updated 11/3/19: The Weather Channel published a report offering the latest updates on California wildfire activity.

As Firefighters Gain Edge on California Wildfires, President Trump Slams Gov. Gavin Newsom

Additional Resource:

California Department of Forestry & Fire Protection (CAL Fire) Active Incidents 

Kincade Fire (77,758 acres; 76% containment)
– Geyersville (Sonoma County, 95441)
– Jimtown (Sonoma County, 95441)

Getty Fire (840  acres, 79% containment)
– Tigertail Rd., Los Angeles (Los Angeles County, 90049)

Hillside Fire (200 acres; 70% containment)
– San Bernardino (San Bernardino County, 92407)

46 Fire (328 acres; 95% containment)
– Jurupa Valley (Riverside County, 92509)

Maria Fire (9,412; 50% containment)
– Santa Paula (Ventura County, 93060, 93061)

Miller Fire (37 acres; 100% containment)
– Valley Center (San Diego County, 92082)

Palisades Fire (current statistics unavailable)
– Pacific Palisades (Los Angeles County, 90272)

Tick Fire (4,615 acres; 100% containment)
Santa Clarita
– Agua Dulce (Los Angeles County, 91390)
– Canyon Country (Los Angeles County, 91351, 91387)

The following wildfires are available for review on MapAlert:
– Getty Fire

– Kincade Fire

– Maria Fire

– Tick Fire

Updated 10/31/19: CNN published a report detailing new wildfire activity impacting portions of Southern California.

California wildfires: Homes burn in San Bernardino and strong winds threaten to stoke other blazes

Approximate locations containing associated home damage:

Kincade Fire (76,825 acres; 60% containment)
– Geyersville (Sonoma County, 95441)
– Jimtown (Sonoma County, 95441)

Getty Fire (745  acres, 39% containment)
– Tigertail Rd., Los Angeles (Los Angeles County, 90049)

Hillside Fire (200 acres; containment unknown)
– San Bernardino (San Bernardino County, 92407)

46 Fire (300 acres; 5% containment)
– Jurupa Valley (Riverside County, 92509)

The following wildfires are available for review on MapAlert:
– Getty Fire

– Kincade Fire

Updated 10/29/19: CBS News issued a report offering updates on Northern California wildfire activity and a new wind event threat that may further fuel it.

Powerful winds could fan devastating wildfires in California – live updates (full report)

California counties possibly impacted by planned power outages:

  • Alameda
  • Alpine
  • Amador
  • Butte
  • Calaveras
  • Colusa
  • Contra Costa
  • El Dorado
  • Glenn
  • Humboldt
  • Kern
  • Lake
  • Marin
  • Mariposa
  • Mendocino
  • Napa
  • Nevada
  • Placer
  • Plumas
  • San Mateo
  • Santa Clara
  • Santa Cruz
  • Shasta
  • Sierra
  • Solano
  • Sonoma
  • Stanislaus
  • Tehama
  • Trinity
  • Tuolumne
  • Yolo
  • Yuba

Updated 10/28/19: CNN published a report offering the latest updates on a series of wildfires that have sparked in Northern California.

Wildfire Burns in Los Angeles (full report)

Updated 10/28/19: California Department of Forestry & Fire Protection (CAL Fire) Active Incidents 

Approximate locations containing associated home damage:

Kincade Fire (66,231 acres; 5% containment)
– Geyersville (Sonoma County, 95441)
– Jimtown (Sonoma County, 95441)

Getty Fire (500 acres, containment unknown)
– Tigertail Rd., Los Angeles (Los Angeles County, 90049)

Miller Fire (37 acres; 100% containment)
– Valley Center (San Diego County, 92082)

Palisades Fire (current statistics unavailable)
– Pacific Palisades (Los Angeles County, 90272)

Tick Fire (4,615 acres; 70% containment)
Santa Clarita
– Agua Dulce (Los Angeles County, 91390)
– Canyon Country (Los Angeles County, 91351, 91387)

Updated 10/27/19: California Governor Gavin Newsom issued a statewide emergency declaration due to threats from extreme weather conditions and wildfire activity.

Governor Newsom Declares Statewide Emergency Due to Fires, Extreme Weather Conditions

Associated County ZIP Code List

 

Disaster Alert
October 24, 2019

Source: The Weather Channel

Additional Resource:

California Department of Forestry & Fire Protection (CAL Fire) Active Incidents 

Approximate locations containing associated home damage:

California

Kincade Fire (21,900 acres; 5% containment)
– Geyersville (Sonoma County, 95441)
– Jimtown (Sonoma County, 95441)

Palisades Fire (45 acres; 75% containment)
– Pacific Palisades (Los Angeles County, 90272)

Tick Fire (4,300 acres; 5% containment)
– Agua Dulce (Los Angeles County, 91390)
– Canyon Country (Los Angeles County, 91351)

At a Glance

  • 50,000 Southern Californians were evacuated by two fires Thursday near Los Angeles.
  • 10,000 structures are threatened by the Tick Fire burning near Santa Clarita.
  • Meanwhile, the Kincade Fire spread rapidly in Northern California.
  • Residents of Geyserville were ordered to evacuate as the fire jumped a highway.
  • PG&E said high-voltage lines near the fire still had power when it started.

Houses have been leveled, hundreds of schools closed and roadways shut down by at least nine wildfires burning across California.

Pacific Gas and Electric said in a press release that one of its transmission towers malfunctioned near the origin of one the largest fires right around the time the blaze began. The utility had cut off power to about 180,000 homes and businesses as a precautionary move to prevent wildfires.

Tens of thousands of Californians fled their homes as the blazes chewed through a combined area of the state the size of San Francisco.

The Tick Fire in Santa Clarita, just outside of Los Angeles, started Thursday afternoon and triggered evacuation orders for 40,000 people. It continued to expand overnight after it jumped State Road 14, closing portions of the highway and forcing additional evacuations in the Sand Canyon area.

“We’re dealing with some very high wind speeds out here,” Los Angeles County Fire Department Capt. Tony Imbrenda told The Weather Channel Friday morning. “Last night we had wind gusts up to 65 mph on the fire line and that gave us a lot of issues. Firefighters had a difficult firefight last night … We’re hoping for a little cooperation from the weather today.”

For full report, please click the source link above.

Brush Fire Ignites in Hawaii

Posted on by Safeguard

Updated 10/23/19: Hawaii News Now published an article offering the latest updates on a brush fire that has consumed close to 1,000 acres in the Kahana Ridge area of West Maui.

Evacuations lifted as firefighters continue to battle large Maui brush fire (full report)


Disaster Alert
October 22, 2019

Source: CNN

Additional Resource:

Maui County, Hawaii (Brush Fire in Kahana/Kapalua Information)

Active Evacuation Locations:

Hawaii
– Ala Hoku Subdivision, West Maui (Maui County, 96761)
– Kahana Ridge Subdivision, West Maui (Maui County, 96761)

(CNN) — A fast-moving blaze is burning near the airport in West Maui, Hawaii, as firefighters scrambled to save nearby homes.

The fire was nearly 1,000 acres by Tuesday evening, according to the Maui Fire Department.

“About 40 fire personnel, three air units and several tankers and dozers from our county and private partners are responding,” the Maui Fire Department said.

It said first responders evacuated Kapalua Airport, and homes in Kahana Ridge and Ala Hoku subdivisions due to the fire. An emergency shelter was opened at a local civic center.

“I want to strongly urge our residents and visitors to avoid the Kapalua area as our first responders fight this fire,” Mayor Michael Victorino said. “Please keep the families affected by these fires and our public safety personnel in your thoughts and prayers.”

When the fire was originally reported shortly after 1 p.m. local time, it was about 4 acres. It raced across the area due to dry conditions and steady winds, according to the fire department.